Want to Haul Military Freight? Check out SDDC’s Requirements

Published: Jul 31, 2014
All freight carriers need to carefully examine the Department of Defense's Freight transportation guidelines before trying to penetrate the market.  Photo credit: Bo47 / Foter / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

All freight carriers need to carefully examine the Department of Defense’s Freight transportation guidelines before trying to penetrate the market.
Photo credit: Bo47 / Foter / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

Are you a freight carrier company seeking to get into military freight transportation? Well, if you are, there are several ways to get into that niche. The easiest way is to get on the list of a broker approved by the Surface Deployment and Distribution Command (SDDC), and get work from them. But if you want to cut the middle man and move Department of Defense (DOD) freight yourself, there are several requirements carriers must comply with first.   SDDC Carrier Requirements

  1. Obtain a Standard Carrier Alpha Code (SCAC) — All freight carriers who wish to transport DOD freight, must first and foremost obtain a SCAC number. This is a unique a unique two-to-four letter code. The first letter of the SCAC will always correspond to the first letter of your company’s name.

You can obtain a SCAC from the National Motor Freight Traffic Association by applying online. There is a $68 fee if you apply online and a $78 fee if you file by paper. You may apply for one SCAC per mode of operation. For example, if you hold both an MC number as a motor carrier and an FF number as a freight forwarder, you may submit separate online applications to obtain an SCAC for each operation.

  1. Set Up an Electronic Payments Account — You are only allowed to do this with the U.S. Bank Freight Payments. This is done so that you can receive electronic payments for the work your transportation services. With their entirely electronic services you can avoid late fees and balance due invoices.

Besides opening an account with U.S. Bank, you also need to be PowerTrack, or Syncada, certified. This is the new technology, which strives to make it easy for shippers and carriers to work together online to manage transportation invoices and freight payments. You can register online for free.

  1. Fill out a SDCC Online Registration Form — You can fill in the form online. The entire process takes a few minutes. Just make sure that all pop-up blockers are switched off or else the webpage will not load.

Before even setting out to fill out the SDCC registration form, you need to make sure you already have your SCAC and your Syncada registration ready. You cannot register without them! SDDC notes that carriers should select “GFM ITV to GTN” in the field for Electronic Data Interchange for tracing/tracking shipments. The SDCC will review your application and get back to you by mail within three business days.   Final Step — Obtain a DOD Performance Bond As soon as you complete your SDCC registration, you need to get your DOD performance bond. DOD Bonds are required of all freight carriers in order to transport military freight. They are mandated by a wing of the military called the Surface Deployment and Distribution Command (SDDC). The bond amount is based on the size of the company and how many states they serve. Movements must begin and end in one of the selected states. Large companies can select one state for bond amount of $25,000. If they wish to transport military freight in two to three states, the bond requirement is $50,000. Carriers who intend on operating in four or more states must obtain a $100,000 DOD Performance Bond. Carriers registered with the Small Business Administration (SBA) have to comply with smaller bond requirements. A small business can operate in three states with a Performance Bond of $25,000, and in up to ten states with a Performance Bond of $50,000. For transportation of military freight in eleven or more states the DOD performance bond amount is $100,000. Trust funds cannot be used instead of a surety bond.

The Easiest Way to Get Bonded

The easiest way to obtain a DOD Performance Bond is to turn to a surety bond broker company like Lance Surety Bonds. We are leaders in the industry who have a very flexible bond premium rate. Annual premium amounts are determined based on owner personal credit. Applicants with stellar credit may be eligible for standard market rates, which range from 1% to 3% of the bond amount. If the owner has less than perfect credit, or past due items on their credit report, annual premium typically ranges between 4% and 10% of the bond amount. The entire bonding process is very simple. You can have your DOD Performance Bond in a couple of minutes. Don’t wait — apply online today!

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Victor Lance is the founder and president of Lance Surety Bond Associates, Inc. He began his career as an officer in the U.S. Marine Corps, serving two combat tours. As president of Lance Surety, he now focuses on educating and assisting small businesses throughout the country with various license and bond requirements. Victor graduated from Villanova University with a degree in Business Administration and holds a Masters in Business Administration (MBA) from the University of Michigan's Ross School of Business.