Comments of: Our reasons are fourfold:

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2 CCSB Proposal to Amend the National Motor Freight Classification (NMFC) & : Docket , Subject 4: Reclassification of [Commercial] Dishwashers January 27, 2015 Comments of: Champion Industries Bi-Line Moyer Diebel 3765 Champion Blvd Champion Blvd N. Service Rd Winston-Salem, NC Winston-Salem, NC Jordan Station, ON L0R1S0 Champion Industries, Bi-Line Conveyor Systems and Moyer Diebel, independent subsidiaries of the Ali Group, are among North America s major manufacturers of commercial dish and ware washing machines. We oppose the changes proposed to NMFC & Our reasons are fourfold: 1. Market economics for producers 2. Packaging technology and economics 3. Producer Liability 4. Debilitating Survey Flaws Market Economics Though the North American Commercial Food Equipment (CFE) sector has demonstrated some recovery from the recession, its health is still tentative. Restaurant failures were at all-time highs and the trade in used equipment appears to us to have outpaced the sale of new equipment. Our industry has responded with cost cutting moves and innovation in an effort to cut customer costs. For example, vent-less ware wash technology, which now has been approved by both the Uniform Mechanical Code and International Mechanical Code, mitigates the need by restaurants and other institutions to purchase and install exhaust hoods, thereby saving customers cost but challenges ventilation equipment producers. Freight costs are among those the industry has tried to manage, too. Sample freight estimates at this new classification(s) show an average increase of anywhere from a low of 20% to a high of 40%. This increase is one we will not be able to pass on to our customers (distributors) who in turn will have their own increases they will have to deal with when shipping from their warehouses to the end user. No commercial ware washing company or its distributors are in a position to absorb this kind of cost increase. 1

3 Packaging Technology and Economics In an ongoing effort to drive down shipping and handling costs, we have examined, redesigned and tested packaging options that increase density while ensuring our equipment arrives as we intend, ready for installation, in most cases, by a plumber. Over the years we have invested time and resources refining and improving packaging, anticipating all that could go wrong from the time the piece leaves our facility until it is placed in situ and commences operation. Manufacturers already spend an inordinate amount of resources on packaging in order to minimize freight damage from the multiple loading, unloading, warehouse movement as the package makes its way through multiple terminals to final destination. The proposed reclassification will force us to redesign BOTH the machines and the packaging; cajoling the installing plumber to also take on the role of mechanic which will increase these non-recoverable costs; search out and contract with local tradesmen to reassemble the machine, increasing these non-recoverable costs; or absorb the proposed increased freight costs, which are non-recoverable. All four options are untenable. Product Liability In the time available to us, following our awareness of this proposal, we considered also the liability Champion and other producers would incur. The only way to provide a work around to increase unit density so as to control costs is to disassemble the larger machines and ship in smaller more dense packages. This process is inherently fraught with liability issues (broadly defined) in that it first forces to assume the shipper will handle the multiple packages properly, that is, they will not become separated and arrive together. More importantly, the responsibility of reassembling the machine in the hands of an installer not trained to do so. Doing so, increases the risk of injury to the installer, of improper re-assembly and product liability issues with the customer. Debilitating Survey Flaws In the event the Committee does not find the data supplied herein, and provided similarly by other parties prior to or during the January 27 Public Meeting, to be persuasive and votes to approve the proposed changes, Champion will request formally the reconsideration of its action on the basis that the Research Project 1190 was poorly executed and the results of the Project, by CCSB s own admission provided virtually no data upon which the Committee could draw useful conclusions. During the course of research, questionnaires were mailed to 174 potential manufacturers or shippers and seven trade associations in August of 2013, and again to those that did not respond, in December of 2013, inviting them to participate in the research. From this sampling, two questionnaires were returned as undeliverable, 10 companies responded that they did not manufacture or ship the involved articles, and five companies provided some information; however, not all of the information was usable. Regarding the seven trade associations contacted, two responded that they did not represent manufacturers or shippers of the involved articles. No response was received from the remaining associations. 2

4 Apparently, such results appear to us as a regular shortcoming in that a review of the analysis for Research Project 1178 shows that your organization sent surveys to 305 private entities and associations of which only thirteen replied and much of whose information was found not to be useful. Further, given the lack of response/awareness to the survey, we are dumbfounded that your organization would have mailed the Notice two days prior to the start of the Christmas/New Year de facto national break, leaving only a couple of weeks, at best, for interested parties who saw reason to open the envelope to respond meaningfully. A review of the list of entities to which surveys were sent reveals that it did include a handful of producers of Commercial Dishwashers but not a truly representative list. Most importantly, in every case, the survey was addressed to Transportation Manager. CCSB assumes, we believe, such a title exists broadly and that the survey, along with its importance and consequence, were clear to those who sorted or did open the communication. As might be obvious to many people, especially since, 2008, companies and associations have been shedding personnel and titles in great numbers. In the case of the above named companies, no position by that title exists nor would the survey envelope have been forwarded internally to another individual. We have, since learning of this Committee s planned consideration, discovered that its letter of December 23, 2014, sent to Champion Industries in Jordan Station, Ontario, was opened only because personnel within our sister company at that address, Moyer Diebel, opened it to learn if it should be forwarded. A proposal of this magnitude, in our opinion, should have been publicized more broadly or, in its purchase of a list of companies and addresses, CCSB should have also purchased and included therein the names of senior management within these entities. The public is prohibited from viewing individual survey replies. We must rely then on the published analysis. It is our view that to proceed with this effort having received, by its own admission, virtually NO quantifiable or usable data from the affected sector should have, by itself caused the committee to reappraise it efforts and seek live input from a sampling of the surveyed class. Having not done so highlights the serious flaws inherent in this effort. As a result, the Committee is considering a change of significant economic effect on the producers of this equipment; and the Committee should not make such a decision without directing staff to find a better mechanism to collect the data necessary to making an informed decision in this matter. Is this a process that warrants consideration by ANSI? For this reason alone, the Committee should direct staff to revisit its survey methods for this proposal. Further, our reading of the results of Research Project 1190 provides no obvious argument for the proposed classification changes. The Report identifies: A Description of the Project The History of Provisions 3

5 About Dishwashers Shipments of Dishwashers Transportation Characteristics including o Density o Handling o Stowability o Liability Relationship to CCSB Policies and Guidelines The comment that CCSB had already been successful in changing the classification for other appliances. Nowhere in the Report do we see the proponent s reasons for increasing our freight rates by 20-40%. Respectfully, Lin Senenig President Champion Industries, Inc Champion Blvd Winston-Salem, NC X

6 January 26, 2015 National Motor Freight Traffic Association, Inc North Fairfax Street, Suite 600 Alexandria, VA Attn: Shannon C. Allard / CCSB RE: Dishwashers (Dishwashing Machines) Proponent: Commodity Classification Standards Board I am writing this letter on behalf of Unified Brands (Power Soak), a manufacturer of Ware Washing Machines (Dishwashers). Approximately fifteen to twenty percent of Unified Brands business is the manufacture of ware washing machines for the commercial restaurant industry. Specifically my response is to request the Subject 4, page1, classification, item ; 92.5 is not changed but remain as currently listed. As proposed the change would increase our paid freight out of pocket cost approximately 90% annually. For a company like Unified Brands this would be a substantial impact to our financial well-being. The proposed increase freight expense would be detrimental to our product cost and ultimately affect the customers we serve. The proposed increase would be met with considerable resistance and could potential cause Unified Brands to lose business. Unified Brands respectfully requests consideration and the waiver of any change in the dishwashing machine rate classification. Unified Brands along with its competitors would be affected negatively. We ask you consideration in withdrawing the proposed classification change. Thank you, Bryan Gonseth Manger Strategic Sourcing Unified Brands CORPORATE OFFICE: 2016 Gees Mill Road, Suite 200, Conyers, GA ADDITIONAL LOCATIONS: JACKSON MS PRYOR OK WEIDMAN MI KANSAS CITY MO FAX unifiedbrands.net UNIFIED BRANDS IS AN ISO 9001 REGISTERED COMPANY 2015 Unified Brands. All Rights Reserved. Unified Brands is a wholly-owned subsidiary of Dover Corporation.

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