Inadequate Notice of CCSB Proposal and Proceedings

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Brook Garrison
6 years ago
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1 1400 K Street, NW Washington, DC tel (202) fax (202) Comments of the Rubber Manufacturers Association Commodity Classification Standards Board Docket , Subject 3 Pneumatic Tires May 3, 2011 Pointe Hilton Squaw Peak Resort Phoenix, Arizona The Rubber Manufacturers Association (RMA) is the national trade association for tire manufacturers that produce tires in the U.S. Our members include: Bridgestone Americas, Inc.,; Continental Tire the Americas, LLC; Cooper Tire & Rubber Company; The Goodyear Tire and Rubber Company; Michelin North America, Inc.; Pirelli Tire North America; Toyo Tire Holdings of Americas, Inc. and; Yokohama Tire Corporation. RMA appreciates the opportunity to provide input to the Commodity Classification Standards Board s (CCSB) proposal to alter the classification for tires. Inadequate Notice of CCSB Proposal and Proceedings RMA appreciates that CCSB made an effort to notify stakeholders about the proposed change. Unfortunately, letters that were addressed to RMA members were sent to Logistics Manager, a title that is not used. As such, RMA and its members were not aware of the CCSB activity until very recently. The late response should not be construed as a lack of interest or low priority for our industry. Rather, it was inadequate notice of the proceedings that resulted in a less than timely response from the industry. Additionally, as tires classification has not changed in more than 40 years, industry familiarity with the CCSB activities or with the CCSB itself is low. No RMA member has reported any issues raised by LTL carriers that would suggest that tires classification was an issue. As the CCSB process could cause significant cost increases for the tire industry, we are greatly concerned and wish to fully participate in the process, including, if necessary, more time to present additional input to the CCSB s deliberation. From the information in the docket itself, it appears that only a limited number of carriers provided input, which does not reflect the experiences of RMA members with LTL carriers. For CCSB to make a truly informed decision on the proposed change, RMA believes more information is needed from shippers and from LTL carriers with extensive experience working with tires. Additionally, information about the how recommendations for classifications changes are made would be useful as would any information about how many and which carriers have raised concerns about the classification of tires. Despite the less than optimum notice, as we became aware of CCSB s proposal, RMA and its members quickly reacted to address the CCSB s proposal. We believe that today s input from the tire industry will be adequate to demonstrate that the proposed change in classification of 1

2 tires is unwarranted and should be rejected. At the very least, we would urge that the CCSB defer any decision to change the classification until the tire industry can have additional dialogue with CCSB and provide further input. CCSB Rationale for Classification Change The proposal to alter the classification for tires would result in potentially significant LTL shipping cost increases. CCSB provided information suggesting tire density, handling, stowability and liability all contributed to the proposed change although CCSB appeared to rely heavily on density as a primary cause of the proposed classification change. In the last 40 years since the classification of tires was last changed, tire technology, engineering and innovation have changed dramatically. Tires last longer and perform better over a wide range of criteria. However, the characteristics of tires that affect their ability to be shipped have not changed at all. They remain the same shape and texture. If anything, experiences and advances by both the tire industry and the LTL industry have brought improvements and efficiencies in shipping that have benefitted tire manufacturers and motor carriers. Additionally, CCSB has proposed to change the classification of used warranty tires from the current 60 to the same proposed classification as new tires. CCSB states that carriers have difficulty ascertaining new tires from the used warranty tires. However, warranty tires have a number of identifying traits in addition to paperwork that readily differentiates them from new tires. Tire Industry Response to CCSB Rationale Information collected and submitted by CCSB into the docket does not represent best practices within the tire industry or among LTL carriers that have extensive familiarity with transporting tires. The information submitted to the docket reflects not the most common or efficient shipping practices but rather selective anecdotes using worst-case scenarios. Additionally, the docket appears to suggest that large tires used in agriculture and mining industries are a more common tire type transported by LTL carriers. In fact, such tires are a distinct minority of the 285 million tires shipped in the U.S. in Commercial truck tires original equipment and replacement numbered fewer than 20 million. By far, the most common tires transported by long haul and LTL carriers are passenger and light truck tires. Furthermore, as noted earlier, since the last classification process for tires was undertaken, nothing about tires has changed fundamentally in the way that tires can be shipped that would warrant a change in classification. CCSB Criteria for Rate Classification CCSB notes in the docket that four criteria are used to review and establish rate classifications: density, stowability, handling and liability. CCSB notes that density is of prime importance in the assignment of classes. This assumes, though, that no unusual stowability, handling and liability characteristics exist.

3 Density: CCSB efforts to collect data on tire density suggest that the average is 9.35 pcf. However, this measurement appears to rely heavily on examples using large agricultural and mining tires and using shipping methods that are not truly representative of typical tire loads. In overwhelming proportion, typical tire loads are passenger and light truck tires. Also, relatively few tires are shipped on pallets. CCSB s analysis ignores the improvements in tire shipping practices over the past decades as well as the cooperative efforts between manufacturers and carriers that have achieved significant improvements, efficiencies and savings. RMA members work with their LTL carriers to achieve efficiencies in loading trailers to minimize reloading; avoiding unnecessary handling and; increasing load density. Maximizing load density is achieved through interlacing tires from floor to ceiling and wall-towall. Since tires do not require additional packaging for shipment, they are effective in helping to fill up unused trailer space for mixed loads. RMA believes that a more complete review of tire shipping practices would very clearly demonstrate that tires achieve a far higher density than shown by CCSB. Although CCSB s analysis claims that tires are not suitable to be mixed with other loads, this is not true. Tires are relatively light weight and can be loaded on top of palletized cargo. Stowability, Handling and Liability: CCSB did not provide a great deal of analysis on stowability, handling and liability aspects of tires. In so doing, a number of additional favorable traits of tires were overlooked in favor of the adverse and misleading information CCSB provided on density. Stowability: In virtually every shipping choice interlacing, loose, palletized or stove-piped (vertical stacking) tires offer flexibility and advantages to carriers to maximize the cube of trailers. Properly loaded, interlaced tires also do not require load bars or other efforts to secure them. Interlaced tires meet the Federal Motor Carrier Safety Administration s requirement for ensuring freight is secured within the trailer. The anecdotal photos in CCSB s analysis depict what appears to worse-case scenario loading and is not reflective of RMA members experience with LTL carriers who regularly ship tires and have assisted with efforts to improve effectiveness and efficiencies of shipping techniques. Handling: A significant advantage to carriers that ship tires is that they do not require any additional packaging. This enables carriers to more efficiently utilize space and do not cause additional packaging material to become part of the waste stream. More importantly, tires are incredibly durable as shipped products and can be jostled or even bounced during handling without sustaining any damage or have any effect on its performance. For loading and unloading, while labor intensive, tires are easily transported whether by rolling or carrying. Tires are easily carried by hand when necessary as they require no equipment to be gripped.

4 Over the past few years, new and improved warehouse management systems have added additional progress in identification of delivery information for even individual tires. More scanning of shipping information improves efficiency at carrier terminals. Emerging RFID capability will further improve sorting efficiency. Liability: CCSB admits in its analysis that tires are a relatively low risk product during shipping. They are not combustible and exhibit no other hazardous traits. Furthermore, tires are non-perishable, extremely durable and present little risk of damage while in transit. Properly loaded, they easily secured within trailers to be little to no risk to other cargo. Since the 1970s, far fewer tires are made with white sidewalls, which were susceptible to scuffing and other cosmetic damage. Proposed Change to Used/Defective Tire Classification CCSB s proposal to cancel the designation of used or defective tire and place them in the same category as new tires at the new proposed 110 classification is based on some input in the docket suggesting that used or defective tires exhibit all of the purported issues as new tires plus used and defective tires are not readily identifiable as such, which creates confusion among carriers. In fact, used or defective tires exhibit a number of traits and have specific visual identifiers, markings, labels or other administrative paperwork to identify them. Used or defective tires will exhibit visual signs of wear including marks on the tires, dirt, dust or the loss of microvents that are normally on new tires. Tires placed into service will not have paper labels with Uniform Tire Quality Grading information and will be identified in shipping papers appropriately. And, used or defective tires will likely be picked up at a tire dealer or distributor. New tires are often shinier, have paper labels, microvents and likely will originate at warehouse or manufacturing facility. New tires also will be identified by relevant administrative paperwork. Given that such tires are readily identifiable and that they, too, have the same positive handling, stowability, liability and density issues as new tires, RMA urges CCSB to maintain the current designation for used and defective tires. Summary Tire traits as they apply to shipping have not changed in the 40 years since the classification was last changed. In fact, in those many years, the tire industry and carriers have worked cooperatively to maximize efficiencies, ensure safe delivery of products and reduce costs. RMA members work in concert with carriers to achieve improvements in density, stowability and handling and seek ways to minimize potential liability. Since the last ruling on classification of tires, RMA understands that other attempts to change the classification have been undertaken and none have been successful. This is further testament to the information provided by RMA

5 and its members that a change now also is not warranted given the numerous advantages tires present to experienced carriers and the continual improvements sought and implemented by the tire industry in cooperation with the LTL industry. We urge CCSB to reject the proposed classification change today. However, if further deliberation is needed, RMA and its members are prepared to fully participate in an active dialogue and process to provide additional information that would demonstrate that any increase in the classification is unwarranted. Thank you for your consideration. Submitted by: Daniel Zielinski Senior Vice President Rubber Manufacturers Association 1400 K Street, NW, Suite 900 Washington, DC main direct

CCSB Contact: Daniel E. Horning Telephone (703) Item Description Class

Re: Racks, pallet, storage or warehouse Item 164340 CCSB Contact: Daniel E. Horning Telephone (703) 838-1820 horning@nmfta.org Proponent: Commodity Classification Standards Board Present Classification