U.S. Military Saving $23M with U.S. Bank Service
Minneapolis-based U.S. Bank is expanding its partnership with the U.S. Department of Defense (DOD) and will now automate payments to the military's “non-temporary storage” providers-a move that could save nearly $23 million a year.
“Non-temporary storage” units are used to store service members' household goods during overseas deployments lasting three months or longer.
The government currently pays storage facilities using paper invoices that can take up to 120 days to process. But with an automated process through U.S. Bank's freight payment division, the average turnaround for payments will shrink to 72 hours-which is expected to save the DOD $23 million annually.
“By automating [non-temporary storage] billing and payment, DOD adds further transparency to its supply chain and expanded ability to analyze data for efficiency and cost-saving opportunities,” Doug Ichiuji, senior vice president and head of government services for U.S. Bank's corporate payment systems unit, said in a statement.
The new agreement expands on U.S. Bank's existing contract with the DOD, which covers the payment of transportation-related costs connected with service member relocations.
Under that contract, which started in 1998, U.S. Bank provides the DOD and its transportation service providers with payment processing services and online access to shipment data and analytical reporting tools. The bank processed more than 8.2 million invoices for the DOD in 2010.
The transportation contract and the just-announced storage contract are both one-year contracts with options to be continuously renewed.
U.S. Bancorp, the parent company of U.S. Bank, is Minnesota's largest bank-holding company with $308 billion in assets as of the end of 2010. U.S. Bank-which operates 3,069 banking offices in 25 states-is the fifth-largest commercial bank in the country.