US Military Supply Chain Has Switched To New Logistics Suppliers

US – IRAQ – KUWAIT – NEW ZEALAND - Following on from our story two days ago in which we referred to press reports elsewhere commenting on the provision of a supply chain for the US military, both the incumbent and former freight contractors have responded to media stories to clarify the situation.

In the original story we pointed out that other media outlets claimed Agility, the Kuwait based logistics group, had received a further six month extension to their contract and that this had been disputed by the company taking over the shipments, Anham FZCo. We also wrote that no such claims were being made by Agility on their specialist website devoted to the legal wrangle surrounding the matter.

In a response to the stories we have received the following statement from the representatives of Agility:

“Contrary to reports in the news media, Agility completed its work on a contract to supply food for U.S. troops in Iraq and Kuwait, transitioning full responsibility to a new provider on Dec. 4. Agility began supplying U.S. forces in 2003, engineering the largest, fastest subsistence ramp-up in U.S. military history.

“By standard industry metrics, the company’s work in a war zone exceeded the performance of food-service providers operating in the domestic U.S. marketplace. Over the course of the seven years, Agility received some of the highest audit scores ever given by the U.S. government and received numerous awards for its work.”

For their part Anham simply reiterated that circumstances were exactly as they had outlined originally i.e. the transition to their services was complete and they were now fully responsible for the supply contract. Anham’s representatives tell us the confusion arose due to the Washington Post article claiming Agility had been granted a contract extension, which was untrue and that the Post would be running a retraction.

With regard to our reference in the same story to a former component of Agility, Geologistics International Management (Bermuda) Ltd., and the fines it received for anti trust activity in the US air freight market, news comes today that the same body await judgement in New Zealand for similar offences.

Geologistics await their fate after reaching a settlement with the New Zealand authorities over breaches of the anti competition regulations between 2001 and 2007 when they colluded with other multi national freight forwarding groups to raise artificial surcharges on air cargoes. Geologistics, together with US freight group EGL Incorporated, who merged with CEVA logistics (formerly TNT) in late 2007, cooperated with the authorities to ensure reduced sentences.

EGL were sentenced for their part in the affair earlier this week and fined NZ$1.15 million plus another NZ$50,000 in costs. The other groups involved await the verdicts on their behaviour in the matter more details of which can be found in our September story.

Photo: Supply and Provision storage in Iraq