C7.12.1. Defense Transportation System (DTS) Costs. When preparing a Letter of Offer and Acceptance (LOA), standard transportation percentages are normally applied based on the Delivery Term Code (DTC). The Transportation Cost Look-up Table (See Appendix 2) is used to compute estimated actual transportation costs for the items listed. When estimated actual costs are used, a note is included in the LOA that identifies the amount, by line item, for each DTS transportation element; (e.g., CONUS inland, port loading, ocean transportation). Estimated actual costs are, similar to standard percentages, placed below-the-line (vice as a separate line item) in an LOA, and the funds are placed in the Foreign Military Sales (FMS) Trust Fund Transportation Cost Clearing Account. When a Special Assigned Airlift Mission or some other form of dedicated premium transportation must be used to move materiel purchased under an LOA, a separate transportation service line is included in the LOA. When expenditures are made for actual transportation, this line is adjusted to meet the full cost of the special transportation and a Type Address Code needs to be supplied to be transferred to the Department of Defense service contract for movement of the freight. When shipments require containerization, storage in-transit, escorts, or has any other special transportation accessorial requirements; these special transportation accessorials are not included in the standard transportation percentages nor in the cost provided in the transportation cost look-up table. These charges are to be placed above-the-line and adjusted as needed to capture actual cost.

C7.12.2. Non-DTS Transportation Costs.

C7.12.2.1. Commercial Bill of Lading (CBL). The CBL is an industry-wide form used by transportation carriers. This document will be used for the receipt of goods, as proof of title and delivery. The use of the CBL is the initial step in satisfying General Services Administration's initiative regarding electronic processing of transportation documents. In lieu of Collect movement, Delivery Term Code 4 and E shipments of non-Working Capital Fund materiel require account numbers to bypass the "pre-paid" process. Air Waybills or Bills of Lading are used to convey carriage within CONUS. A purchaser or its Freight Forwarder may be involved in the carrier selection process only if a collect shipment requires a Notice of Availability or if special instructions in the Military Assistance Program Address Directory (MAPAD) apply. Since most FMS shipments to Freight Forwarders are Working Capital Fund pre-paid shipments, Special Instructions in the MAPAD are inadvisable since they do not apply to pre-paid shipments and would delay their release.

C7.12.2.2. Pre-Paid Arrangements. Small parcel shipments are shipped prepaid via a small parcel carrier to reduce costs. The shipping activity follows pre-pay and add procedures so that the materiel manager recovers transportation charges from a purchaser’s account. Pre-pay and add procedures are not recommended for FMS due to a lack of in-transit visibility.