DEFENSE LOGISTICS AGENCY
DEFENSE ENERGY SUPPORT CENTER
8725 John J. Kingman Rd. Suite 4950
Fort Belvoir, Virginia 22060-6222
Policy Number: DESC-P-16 January 30, 2008
1.1. This DESC interim policy governs Defense Energy Support Center (DESC), DESC Field
Activity, Defense Fuel Support Point (DFSP), other Department of Defense (DOD) Component, and
contractor-operated DFSP bulk petroleum shipments. This policy prescribes transportation
procedures and assigns associated responsibilities to Defense Energy Support Center (DESC),
Military Services, Surface Deployment and Distribution Command (SDDC), and Military Sealift
Command (MSC). This policy was coordinated with applicable DESC Offices and Military Service
Control Points (SCPs) and approved by DESC as interim guidance pending inclusion into DOD
1.1.1. Supersession: This interim policy supersedes DOD 4140.25-M, Volume II, Chapter 6,
Transportation, dated 22 June 1994.
2.1. DOD 4140.25-M, Volume II, Chapter 4, Ordering, Requisitioning, and Slating provides ocean
tanker resupply and scheduling procedures.
2.2. DOD 4140.25-M, Volume II, Chapter 5, Shipment, Issues, and Receipts and
Chapter 9, Afloat Pre-Positioning Force (APF) or Floating DFSPs provides procedures to resolve in-
transit product losses and quantity discrepancies.
3.1. SDDC delegates the following Continental United States (CONUS) including Alaska and Hawaii
transportation management functions to DESC:
3.1.1. Determination of the most efficient transportation method.
3.1.2. Distribution of traffic among various competing carriers.
3.1.3. Authority to suspend carriers for unsatisfactory service.
3.2. DESC Regions will:
January 30, 2008
3.2.1. Provide bulk petroleum transportation services through arrangements with SDDC, MSC, and
3.2.2. Provide traffic management technical direction and assistance to ensure safe and efficient bulk
4. RATES AND ROUTES
4.1. Rates and Routes. SDDC provides rates and routes for bulk petroleum transportation, except for
ocean tankers, in accordance with Defense Transportation Regulation (DTR) DOD Regulation
4.2. Tender of Freight Service. Carriers shall electronically file tenders to SDDC for action in
accordance with the Defense Transportation Regulation. The SDDC and DESC Inventory and
Distribution Management Division (DESC-BI) will evaluate all relative data when carrier business,
type, style, circumstances, and so forth require negotiation.
4.3. Routing Data.
4.3.1. SDDC will provide DESC Regions routing data for bulk petroleum product shipments through
the Global Freight Management (GFM) system. When developing routing data, DESC Regions shall
evaluate shipping point and receiving activity loading/receiving capabilities and constraints to avoid
4.3.2. DESC Regions will provide routing instructions to all shippers. Shippers shall coordinate
delivery schedules with receiving activities. Military installation DFSPs shall schedule deliveries
with suppliers in accordance with contract or Source Identification and Ordering Authorization
(SIOATH) instructions issued by the respective DESC Region. Submit written exemption requests to
use Terminal SIOATHS to notify military installation DFSPs regarding suppliers to DESC Business
4.3.3. DESC Regions will issue routing instructions to shippers for each transportation mode by fuel
grade. Routing instruction preparation shall reflect SDDC GFM System data and shall identify
unique conditions where applicable. DESC Regions shall retain and archive electronic copies of
Routing Instructions for one buying cycle for the Inland East Gulf, Rocky Mountain/Inland West, and
WestPac annual bulk purchase program.
4.3.4. DESC Regions will authorize shipments between contractor and DFSP shipping points using
GFM System data and will provide the DFSP with routing instructions for use in conjunction with the
U.S. Bank PowerTrack® system. Shipping DFSPs and contractors shall schedule transportation
equipment necessary to load bulk fuel.
4.3.5. Requests for specific transportation modes and reporting conditions that result in other than
lowest overall costs are as follows:
January 30, 2008
18.104.22.168. Pre-Contract Award: DESC-BI, DESC Regions, and SCPs shall perform an annual
quantity review nine months prior to contract award to identify shipping and receiving
capabilities/limitations each individual DFSP. The review objective is to identify delivery
restrictions at the time requirements are submitted to DESC-BI to include justification for sole
delivery mode such as pipeline only. DESC-BI and Regions will further review transportation nodes
and shipping arcs to ensure shipping modes are consistent with individual DFSP fuel handling
5. SHIPMENT DOCUMENTATION Shipping points will enter PowerTrack® transactions in
accordance with the current DOD and U.S. Bank Agreement. The shipping point will enter
consolidated PowerTrack® transactions to record total gallons loaded by each carrier at the close of
each shipping day.
6. CARRIER DEMURRAGE/DETENTION
6.1. MSC Controlled Vessels (Worldwide). MSC operates and bills cargo sponsors based on daily
per diem rates. MSC processes and pays demurrage claims submitted by carriers that provide spot or
charter services. Sponsors (DESC/others) may initiate claims against contractors and non-DOD
agencies that cause vessel loading/discharge delays in excess of allowed vessel laytime.
6.2. Tank Trucks, Tank Cars, Inland and Coastal Tankers/Barge (Worldwide). DESC will fund and
pay carrier demurrage/detention at FOB origin contract loading/discharge operations and other
facilities that store Defense Working Capital Fund (DWCF) fuel with exception of demurrage due to
untimely action or other shipping/receiving activity deficiency. The carrier shall forward claims to
the appropriate DESC Region, which reviews claims and approves valid carrier PowerTrack®
demurrage/detention E-Bills. DESC Regions shall advise DESC-BI of demurrage incidents that
involve contract water movements for possible recovery action. The DESC CONUS Contracting
Division (DESC-BC) shall settle carrier demurrage charges associated with FOB destination delivery
7. LOADING AND RECEIVING CAPABILITIES
7.1. Military DFSPs. Continental United States (CONUS) and Other Than Continental United States
(OCONUS) DFSPs shall report shipping and receiving capabilities to the respective DESC Region
through site visits and routine contacts and shall notify the Region whenever changes or restrictions
occur. This information provides data for use during the annual Bulk Purchase Program Node/Arc
7.2. CONUS/OCONUS Suppliers.
7.2.1. CONUS and OCONUS suppliers shall submit an Offer Information Sheet to DESC-BC and
the DESC OCONUS Contracting Division (DESC-BF) to identify specific shipping details by
product grade and transportation mode.
January 30, 2008
7.2.2. DESC-BC/BF shall coordinate the Offer Information Sheet with DESC-BI to verify that terms
and conditions of the offer are acceptable. DESC-BI in turn will coordinate and verify the same with
the respective Region.
8.1. General. The following defines the relationship between DESC and the Military Services to
establish pipeline services to deliver bulk fuel to military operated DFSPs. DESC-BI analyzes DOD
fuel requirements and DFSP locations to determine the most economical transportation mode. The
selected delivery mode provides the lowest overall cost from product origin to final destination that
satisfies the DOD requirement. Military operated DFSPs receive pipeline service by:
8.1.1. Connection to existing pipeline(s).
8.1.2. Connection between DFSP and installation.
8.1.3. Construction of new pipeline service.
8.2. Military Service Coordination.
8.2.1. Where it appears advantageous to the Government to consider pipeline fuel delivery service,
DESC-BI shall coordinate proposed pipeline service with the appropriate Military SCP and
organizational Command. DESC-BI shall require the following data with Military Service
22.214.171.124. Projected five (5) year bulk fuel requirement.
126.96.36.199. Bulk Petroleum War Reserve Stock (BPWRS) required outside the military installation
boundary and the required daily delivery quantity.
188.8.131.52. Guarantee that the Military Service will grant the selected pipeline easement rights from the
installation boundary to the petroleum storage area and confirm by military service legal review.
DESC-BI shall negotiate resolution whenever a military installation and prospective pipeline carrier
are unable to achieve easement rights agreement. Absence of a suitable agreement shall result in
pipeline connection action termination.
8.2.2. The Bulk Distribution Branch (DESC-BID) shall develop relationship with carriers interested
to provide pipeline connections and shall solicit pipeline service through SDDC to obtain competitive
pipeline service pricing.
8.2.3. DESC-BI shall coordinate all phases of pipeline connection concerning bulk petroleum supply,
storage, and quality control with the respective SCP and organizational Command.
8.2.4. Military operated DFSPs that have pipeline as primary receipt mode shall maintain sufficient
alternate receipt mode capability to ensure resupply continuity in the event of pipeline service
interruption. DFSPs without sufficient alternate receipt capability shall submit proposed projects
January 30, 2008
through service channels to DESC for evaluation and funding consideration.
8.3. Common Carrier Pipeline Operations.
8.3.1. Carrier tenders (MSDDC Freight Traffic Rules Publication No. 6A) and carrier tariffs terms
and conditions govern pipeline operations and service provisions. DESC entrusts carriers with
custody of a specification product quantity at the source of origin for which the carrier is responsible
to deliver with identical quality and quantity or otherwise provide financial restitution. The carrier
shall develop or modify a Quality Control Plan (QCP) in coordination with the DESC Region field
quality representative to provide all required precautions and product samples/tests and thereby
ensure specification product delivery to the DFSP. No DFSP shall levy further requirements that
affect carrier rates but shall forward additional requirements to DESC-BI for analysis and potential
8.3.2. DESC Regions shall review a carrier tender/tariff and other published company rules and
regulations governing fuel movement within the carrier system to assess DESC risk when the
pipeline carrier refuses to negotiate a suitable QCP. DESC Regions shall forward a recommendation
to DESC-BI for consideration and potential waiver to the QCP requirement.
8.4. Funding and Operating Procedures. DOD 4140.25-M, Volume II, Chapter 8, Management of
Storage and Distribution Facilities, provides funding and operating procedures for OCONUS
commercial pipelines and CONUS/OCONUS Government owned pipelines.
9. BARGE SHIPMENTS
9.1.1. DESC Americas will authorize routing of all commercial barge shipments by coastal, inland,
or intercoastal waterways through the SDDC GFM system or SDDC awarded barge service contracts.
9.1.2. MSC will arrange oceangoing barge shipments with a capacity of greater than 2,100,000
gallons (50,000 barrels/7,950 cubic meters) or when DESC tanker scheduling requirements exceed
the MSC controlled tanker fleet capability.
9.2.1. Combatant Command (COCOM) Joint Petroleum Offices (JPO) shall designate a U.S. military
unit in each country/island as a bulk petroleum shipment receiver by military barge as well as by the
following commercial barge shipment types:
184.108.40.206. Shipments by inland waterways.
220.127.116.11. Shipments between terminals within a port area not suitable for movement by the available
MSC controlled vessel fleet.
9.2.2. The COCOM JPO designated military unit shall request and receive Obligation Authority
(OA) from DESC-BID prior to a shipment.
January 30, 2008
9.2.3. MSC and COCOM JPO designated military units shall not enter into competition or duplicate
services. MSC and the military unit shall designate by mutual agreement one or the other to perform
the above contracting services and functions.
9.2.4. The DESC Tanker Operations Branch (DESC-BIT) shall arrange/coordinate all commercial
barge shipments of DWCF fuel through MSC to include the following:
18.104.22.168. From one port area to another for ocean transportation.
22.214.171.124. Between MSC controlled tankers and shore facilities upon mutual DESC/MSC agreement
regarding the appropriate fuel loading/discharging method.
10. SHIPMENT REJECTIONS The receiving DFSP shall notify the respective DESC Region for
instructions when shipments require rejection or are undeliverable. The DESC Region and the field
Quality Representative shall determine shipment disposition and advise the receiving DFSP
accordingly. Additionally, the receiving DFSP shall inform the respective Major Command
(MAJCOM) and SCP. The DESC Command Center may be contacted at 800-286-7633 for after
11. OCONUS INLAND TRANSPORTATION
11.1.1. Requirements. Overseas commands shall submit estimated annual requirements to DESC-
BID to support requests for transportation funds. Each command shall provide the following
information with transportation requirements:
126.96.36.199. Origin/Destination by Department of Defense Activity Address Code (DODAAC)
188.8.131.52. National Stock Number (NSN)
184.108.40.206. Quantity in U.S. gallons (USG)
220.127.116.11. Transportation mode and any restrictions
18.104.22.168. Estimated cost in U.S. dollars
11.1.2. The DESC Facilities Management Branch (DESC-FGM) shall determine and submit annual
transportation requirements for DWCF petroleum products to the DESC Program Budget Division
(DESC-RB) for funding. Requirements shall include service charges assessed to the Military
Services by foreign governments under International Agreements for which DESC has payment
January 30, 2008
11.1.3. Responsibility. DESC OCONUS Regions shall pay commercial transportation charges when
a commercial carrier ships DWCF bulk petroleum and requests payment through PowerTrack®. Use
of freight warrants or similar shipping documents is acceptable when the commercial carrier is not a
PowerTrack® user. DESC-RB shall provide a funding document to the OCONUS military unit
assigned transportation responsibility. DFSPs shall e-mail a detailed monthly Transportation
Expense Report (template provided by DESC-BID) of issued freight warrants to DESC-BI.
12. MILITARY SEALIFT COMMAND (MSC)
12.1. Tanker Requirements Forecast.
12.1.1. Annual and Long-Range Forecasts. DESC-BIT reports long-range bulk lift requirements
forecasts to MSC. An annual forecast is required approximately five months prior to commencement
of the Fiscal Year (FY). DESC-BIT updates the forecasts whenever significant changes in
distribution patterns occur.
12.1.2. Forecast Development. DESC-BIT analyzes projected requirements to determine future
petroleum shipments that will likely require MSC tanker delivery as well as to identify probable
procurement source areas.
12.2. Petroleum Product Slates. DFSPs shall submit slated bulk fuel requirements for ocean tanker
deliveries to DESC-BI through the CONUS/Overseas Bulk Fuel Slates. DESC-BIT and MSC
develop/coordinate cargo and vessel schedules and notify appropriate DFSPs regarding specific
cargoes, arrivals, and departures. DESC-Japan fulfills the same responsibilities for the MSC T-1
12.3. Funding. DESC funds all bulk tanker cargo deliveries.
12.4. Dead Freight. DESC-BIT may accept dead freight due to operational necessity.
13. FUNDING TRANSPORTATION COSTS
13.1. DESC shall fund:
13.1.1. Industry shipments to DFSPs.
13.1.2. Shipments between DFSPs.
13.1.3. Shipping and related charges assessed by common carriers.
13.1.4. Costs not chargeable to DESC by carriers, but required for fuel delivery such as Government
switch engine use funded by the Military Services.
13.1.5. Transportation costs for less than truckload shipments when the receiver has insufficient
available ullage or other valid reason that prevents full truckload receipt.
January 30, 2008
13.1.6. Transportation costs for commercial fuel and lube oil shipment by tank truck or barge to U.S.
Navy vessels at dockside or adjacent anchor. Vessels that fail to offload the total ordered quantity
shall direct the carrier to return remaining product to the shipping terminal or other location directed
by the responsible DESC CONUS/OCONUS Region office. The requesting unit or vessel account
shall be billed return transportation costs. DESC Americas shall provide DESC-BID with a quarterly
report on Navy returns.
13.2. Military Services and Other Authorized Customers shall fund:
13.2.1. Underway replenishment (UNREP) shipments.
13.2.2. Ordered fuel not received for any reason not attributable to DESC or the carrier.
14.1. Underway Replenishment (UNREP). UNREP represents fleet oilers or MSC controlled
tankers that refuel ship bunkers at sea. Fleet or Theater Commands fund UNREP transportation
14.2. In-Port Replenishment (INREP). INREP represents MSC controlled tankers that refuel Afloat
Prepositioning Force (APF) ship bunkers to include Maritime Prepositioning Ships (MPS) and
Prepositioning Force (PREPO) tankers while in port.
14.2.1. MSC funds bunker fuel supplied to MPS vessels by MSC tankers for which the Military
Service components provide reimbursement.
14.2.2. DESC shall fund/reimburse MSC for PREPO bunker requirements.
15. CONSOLIDATED CARGO (CONSOL)
15.1 CONSOL represents MSC controlled tankers that supply fuel to fleet oilers at sea. CONSOLs
consist of three categories:
15.1.1. CHARGER LOG IV. CHARGER LOG IV is an opportune CONSOL by which fleet oilers
meet with an MSC tanker along a prearranged route from loading port to discharge port to refuel at
sea. Opportune means the type of cargo product and quantity was unscheduled by the Navy, but the
fleet oiler had opportunity to transfer aboard DESC-BI pre-arranged/approved contracted or DWCF
fuel. When a CHARGER LOG IV is not prearranged/approved, an emergency CONSOL may be
initiated to fill requirements.
15.1.2. Scheduled CONSOL. A scheduled CONSOL is a scheduled replenishment at sea when all or
partial MSC tanker cargo is to support specific Navy requirements and the fleet typically loads at
shore based DFSPs. Direct delivery of fuel to the fleet achieves cost avoidance associated with fleet
oiler round trips to DFSPs and replenishment costs for DFSPs drawn down by Navy oilers. The
January 30, 2008
Navy/JPO shall request CONSOL scheduling to DESC-BI a minimum 20 days in advance of the required
15.1.3. Emergency CONSOL. An emergency CONSOL represents a certified Navy fuel requirement during a
confirmed emergency condition that prevents routine fulfillment. DESC-BI shall schedule an emergency
CONSOL upon receipt of an approved Fort Belvoir VA Naval Operational Logistics Support Center –
Petroleum (NOLSC) request.
15.2. Vessel Daily Cost. Vessel daily cost is the MSC published vessel per diem rate in effect at CONSOL
15.3. Cargo Cycle. Cargo cycle is the transportation billing costs calculated from vessel arrival at the initial
loading port to vessel arrival at the first loading port for the next cargo.
15.4. On-Station-Time. On-Station-Time begins upon MSC controlled tanker arrival at the CONSOL location
and ends when the fleet releases the tanker.
15.5. Funding. DESC shall fund and reimburse MSC for all or partial CONSOL transportation costs as
15.5.1. CHARGER LOG IV. DESC shall fund tanker diversions less than 24 hours. The Navy accrues
charges for the full time at the vessel per diem rate for tanker diversions that exceed 24 hours. The calculated
tanker diversion time is the difference between actual tanker transit times from the last loading port to the first
discharge port to include time-on-station during the CHARGER LOG IV, minus the normal transit time
between the last loading port and the first discharge port.
15.5.2. Scheduled CONSOL. CONSOLs minimize both DESC and Navy costs and each therefore share half
the full per diem costs of the complete CONSOL cargo cycle when a tanker is on station for less than 72 hours.
The Navy is responsible to pay the additional tanker per diem when the CONSOL tanker remains on-station
for more than 72 hours.
15.5.3. PREPO DFSPs. PREPO tankers used to fulfill Navy requirements enable CONSOLs without
disrupting other tanker cargo operations. DESC pays the APF per diem rate and the Navy pays all charges
over the APF rate for PREPO tanker use for CONSOL duty. DESC-BI and the appropriate COCOM JPO
coordinate all PREPO tanker use for CONSOL duty.
15.5.4. Emergency CONSOL. DESC funds emergency CONSOL transportation costs.
15.5.5. CONSOL Nominations. All CONSOL nominations shall include appropriate funding documents with
copies forwarded to MSC and DESC-BI prior to the proposed scheduled CONSOL date. CONSOL cost
estimate data is available from DESC-BI upon request.
MAYNARD J. SANDERS
OCR: DESC-B/F/R/G/BC/FG/RB/Region Offices