Subject: Statement by Carrier Corporation regarding Docket , Subject 1, a proposal to reclassify NMFC items and

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3 Carrier Corporation One Carrier Place Farmington, CT Date: May To: The Commodity Classification Standards Board Subject: Statement by Carrier Corporation regarding Docket , Subject 1, a proposal to reclassify NMFC items and Overview The proposal by the Commodity Classification Standards Board seeks to both change the rating method used price transportation services for Air Conditioning products and to the change the packaging standards for those same products. The rating system is currently based on three primary factors; whether or not the units contain compressors, the unit dimensions and packaging types. The proposed change moves the ratings to a density basis and blends units containing compressors with those that do not. Concerns We feel that the data used in the study to be too small a sample size. There were 391 companies contacted with 8 usable responses. This represents a 2% sample. We d like to correct the record in the Stowability section of the analysis, pointing out that the exposed coils cited in the picture referenced within the paragraph are instead grills protecting fan blades inside of the unit. There is crating protecting and supporting the top of the unit. Compressors have a bearing on value and handling so that we are unsure of the benefit of rating these two categories under one NMFC item with respect to liability and claims. The approach in the proposal seems to be twofold; the first an effort to improve packaging protection for air conditioning machines, which it seems would be intended to reduce claims exposure and hence profitability on the part of the transportation providers, and secondly an effort to increase the revenue in the transportation of air conditioning machines by the change to the density rating method which would result in revenue enhancement to counter balance claims experience. Recommendation We recommend instead that there be a two-step approach. The first would be to enact the packaging changes contained in Subject 1 and to perform an evaluation of the results after a reasonable time frame, with a statistically significant sample size. After that evaluation a determination of the need for the density rating method would be made to address any lingering claims versus revenue issues.

4 An overall observation is that in the transportation market place there is competition in service and in quality. There are providers who successfully transport air conditioning equipment with low claims ratios and quality service. We think that the market place should determine cost based on those factors, service and quality, rather than the proposal at hand which assists poorer performers while not addressing the need for improvements in the service offering in terms of handling and error free delivery. Respectfully submitted, Peter Geiskopf Transportation and Logistics Manager NA Carrier Corporation

5 Subject: Docket Subject 1 From: "Kemper, Robert" <Robert.Kemper@daikinapplied.com> To: Paul Levine <Paul.Levine@nmfta.org> CC: Mr. Levine, As the logistics manager in the United States for the largest HVAC company in the world, we were surprised to see a docket notification to increase the class rates for our products. I have submitted a letter of protest against this action based on our data on shipment density and damage claims. However, our company has not had sufficient time to thoroughly analyze in depth data and are not aware of any data from motor carriers that would precipitate such a drastic increase in class rates. Therefore, we respectfully request the Commodity Classification Standards Board postpone any actions concerning Docket Subject 1 until such time as further in depth studies can be conducted. Regards, Bob Kemper Logistics Manager Daikin Applied Industrial Park Blvd. Minneapolis, MN (Office) (Mobile) (Fax) bob.kemper@daikinapplied.com

6 From: Joel Ringer Sent: Thursday, May 22, :19 AM To: Wismer, Tim Cc: Hurst, John; Baedke, Jerry; Pison, Kate; Weddle, Kyle; Erin Topper; Colleen Airgood Subject: RE: Written submission by Lennox Industries to proposal regarding NMFC Items and Docket , subject 1 Mr. Wismer, Your statement was submitted after Subject 1 of Docket had already been considered and acted upon by the Commodity Classification Standards Board. While it is, therefore, not technically part of the record, as a courtesy we are including the statement in the public docket file for the proposal, as posted on our website. You were previously made a party of record to the proposal, and as such, you will be receiving our Notice of Disposition. It will be mailed to you at the following address: Tim Wismer Manager, Logistics Lennox Industries, Inc Lake Park Blvd. Richardson TX Regards, Joel L. Ringer Chairman Commodity Classification Standards Board 1001 North Fairfax Street, Suite 600 Alexandria, Virginia ringer@nmfta.org From: Wismer, Tim [mailto:tim.wismer@lennoxind.com] Sent: Tuesday, May 20, :25 PM To: Joel Ringer Cc: Hurst, John; Baedke, Jerry; Pison, Kate; Weddle, Kyle Subject: Written submission by Lennox Industries to proposal regarding NMFC Items and Docket , subject 1 Importance: High

7 Commodity Classification Standards Board (CCSB) Re: Reclassification of Air Coolers or Air Conditioners, Heat Pumps, Air Handlers, or Refrigeration Evaporators or Condensers: NMFC Items and Docket , Subject 1 Reference CCSB memo date April 3, 2014 of notification of proposed amendments to the National Motor Freight Classification. This proposal, if adopted, would eliminate the industry classification of NMFC combining it with NMFC This consolidation would result with the low density classification, for these NMFC commodities, to increase from the current class for low density of 110 to 200 assuming packaging of boxes, crates or packages. If shipped loose with limited protection, the new class for these commodities would be 250. Included in the policies and directives pertaining to the National Motor freight Classification under the CCSB item Sub 2, are packaging items 2475 and or Lennox product packaging meets and/or exceeds these CCSB packaging policies. Of the HAVC industry, Lennox is known to have the best packaging on this product. If the proposal is adopted and authorized by the CCSB, Lennox International would experience a significant increased freight expense. Preliminary estimates could be an increase of 10+%.