Car shipper's dispute over $3.63 million debt means troops' cars stranded in Houston
A hearing scheduled for Wednesday afternoon in a Georgia courthouse could decide if federal contractor International Auto Logistics LLC will be able carry out its nearly $1 billion contract with the U.S. Transportation Command, based at Scott Air Force Base, to ship servicemember vehicles overseas.
The hearing, which aims to resolve a payment dispute between International Auto Logistics and subcontractor Liberty Global Logistics LLC, an ocean freighter company, could also decide the fate of at least 66 servicemembers’ cars marooned in Houston since last week.
Repo men working for Liberty, of New Hyde Park, N.Y., confiscated the car keys at the Houston seaport because International Auto Logistics, or IAL, owes the subcontractor more than $3.63 million in unpaid invoices, according to documents filed in a lawsuit being heard in Brunswick, Ga., where IAL is based.
On the day Liberty confiscated the car keys, firm executive vice president Robert G. Wellner sent an email to Doug Tipton, IAL’s president, reminding him of the $3.63 million debt for ocean freight services, according to court documents.
“We wish to emphasize that LGL regrets having to take this action,” Wellner wrote, “and we stand ready to immediately release these vehicles upon receipt of cash payment from IAL, or alternatively, security satisfactory to LGL,” according to the letter.
The lawsuit between IAL and Liberty sheds new light on the reasons why IAL continues to be the target of military members’ complaints regarding late deliveries of their privately owned vehicle, despite efforts by TRANSCOM personnel to fix IAL’s problems and bring it into compliance with contract requirements.
IAL’s contract with TRANSCOM, which took effect last year, is already under investigation by the U.S. Department of Defense Inspector General. In addition, Gen. Paul Selva, Transcom’s commander, has given IAL until Feb. 1 to devise a plan for handling the upcoming summer surge of car shipments — and avoid the costly missteps that have plagued the contractor and its many frustrated customers since May, when IAL took over a contract that had been handled by a rival for the previous 19 years.
IAL’s biggest problems have centered on its failure to meet required delivery dates for the shipment of thousands of military members’ privately owned vehicles overseas and back. The problems cropped up soon after IAL took over the contract May 1, and soared this past summer, when nearly half of all Defense Department car deliveries to overseas duty stations take place.
The extent to which IAL has suffered financially is sketched by its initial federal court complaint against Liberty Logistics in late October. IAL lawyers urged a federal judge to demand that Liberty Logistics, or LGL, continue to work with IAL, despite their payment dispute, because IAL “has already incurred millions of dollars in damages in the form of inconvenience claims it has had to pay to civilian employees of DoD and service men and women because of LGL’s failures to perform under the agreement.”
What is more, IAL had “recently discovered that LGL has ignored approximately 60 containers containing service member vehicles that have been lost by LGL at various ports in the United States in spite of having been notified by their shipping subcontractors of their availability for unloading,” IAL attorneys wrote.
©2014 the Belleville News-Democrat (Belleville, Ill.). Distributed by Tribune Content Agency, LLC.