Transcription

1

2

3

4

5

6

7

8

9 UNIGROUP One Premier Drive, Fenton, Missouri Via at: June 22, 2015 Joel L. Ringer, Chairman Commodity Classification Standards Board 1001 North Fairfax Street, Suite 600 Alexandria, Virginia Re: Request for Reconsideration CCSB Docket , Subject 1 (deferred) HHG, Including Personal Effects or Military Baggage UniGroup, Inc. ( UniGroup ) is the parent corporation of several carriers, including United Van Lines, LLC and Mayflower Transit, LLC - two nationally-known interstate carriers of freight, including household goods ( HHG ), and participants in the NMFC. Accordingly, UniGroup's carriers will be directly affected by the proposal under consideration in this proceeding. For all of the following reasons, UniGroup respectfully seeks reconsideration of the above-referenced docket disposition by the Commodities Classification Standards Board ( CCSB or Board ) pursuant to Rule 8 of the National Motor Freight Classification ( NMFC ) Procedures. Classification Standard: There is a statutory obligation for classifications to be reasonable. 1 Reasonableness by comparison of a commodity s four transportation characteristics (i.e., density, handling, stowability and liability) with those characteristics of other commodities assigned comparable classes. 2 We suggest, however, that comparing the transportation characteristics of HHG with those characteristics of other, similar, commodities is not only difficult, but ignores important legal and industry precedence relating to transportation of HHG. First, CCSB s rule describing HHG limits the classification to second hand (used) household or personal effects. 3 Both federal law and CCSB s rule describing HHG also exclude most property moving from a factory or store. 4 As CCSB s publicly available dockets attest, nearly every other commodity analyzed is uniform, manufactured, packaged professionally, and shipped by industrial participants rather than individual consumers. There are few, if any, other commodities with characteristics similar to HHG. Therefore, we suggest that basing classification of HHG upon methods used with other commodities with similar purported density characteristics without recognizing its unique shipper and commodity characteristics is not reasonable. Second, the shippers of HHG are atypical from those of other commodities. LTL carriers 5 have as customers, two drastically different types of shippers: individuals and interstate HHG movers. 1 Protest of NCC Action Taken May 3, 1999, STB Docket No. I5M 35004, 1999 STB LEXIS 429, *4 (July 15, 1999). 2 NMFC Procedures, Part II, Article II. Rule 6 and National Motor Freight Traffic Association and National Classification Committee v. I.C.C., 51 F.3d 297, 300 (DC App. 1995), citing, Motor Classification Ratings on Candy or Confectionary, 353 I.C.C. 314, 329 (1977) and Classification Ratings on Intermediate Bulk Containers, National Motor Freight Classification, Dkt. No. M (August 30, 1994) (not printed). 3 See, Subject 1 Docket HHG, Personal Effects or Military Baggage, Item NOTE. 4 The term household goods, as used in connection with transportation, means personal effects and property used or to be used in a dwelling, when a part of the equipment or supply of such dwelling, and similar property if the transportation of such effects or property is-- (A) arranged and paid for by the householder, except such term does not include property moving from a factory or store, other than property that the householder has purchased with the intent to use in his or her dwelling and is transported at the request of, and the transportation charges are paid to the carrier by, the householder; or (B) arranged and paid for by another party. (See 49 USC 13102(10) and similarly in 49 CFR and 49 CFR )) 5 Although NFMC participation is available to all interstate motor carriers, the NMFTA is particularly committed to helping LTL carriers meet the challenges confronting the transportation industry in the 21 st century through research, education, and the publication of

10 Individuals: with consumers increasingly looking for different moving services, many LTL carriers are entering into the HHG moving market. These carriers sell their services directly to individual consumers, a class that enjoys special protections not imposed upon any other shipper/commodity, usually through a do-it-yourself ( DIY ) or similar service. Examples of these programs include Old Dominion s Household program and ABF s UPack program. 6 Based on publically available information, HHG moving through these programs are doing so under the provisions of the NMFC. 7 HHG Movers: As noted by the American Moving and Storage Association ( AMSA ), the interstate HHG industry is facing a significant and growing shortage of qualified interstate van operators. As a result, movers are increasingly looking for alternative transportation methods to service their customers, including interlining their shipments with LTL carriers. In this model, a mover will typically professionally pack and load its customers property into containers which are drayed to the mover s warehouse. An LTL carrier hauls the containerized shipment to the mover s destination location warehouse, where the mover then drays the containers to its customers residences and completes the move. (photo of an actual HHG shipment interlined by United Van Lines to an LTL carrier) We respectfully suggest that the Board s analysis of HHG characteristics lack reference to the key differences between HHG and other commodities, including types of shippers and methods of shipping, are not sufficient to reasonably form the sole basis for a reclassification decision. Accordingly, we believe that Board should revisit HHG s four transportation characteristics, taking into account those differences. Density We believe that the potential disparities pointed out by AMSA 8 in the data relied upon by CCSB for its density observations should be reconsidered in light of a long history of industry practices, including recognition that the HHG industry standard has always been a uniform standard industry measure of 7 lbs/cu ft to estimate the size and calculate the density of HHG shipments worldwide. We believe that this long-standing industry measure is supported by decades of practice and, without an actual scientific study of the types of HHG shipments found in today s LTL industry, a more reliable standard than the data currently available. specifications, rules, transportation codes and the preparation and dissemination of studies, reports and analyses. See. org/pages/membership description 6 See, e.g., and 7 See, e.g., 8 AMSA suggested that the density figures relied upon do not indicate a more random scatter of data points that one would expect in shipments that were actually weighed and measured for cube. Instead, the data suggest computer-generated weight or cube data or some other method that would be likely to produce standardized results. 2

11 For example, another variance in the measurable density of HHG shipments can include the experience of persons packing and loading HHG, as well as the quality and quantity of the packing and protective material being used, and types of load securement options (straps, rope, dunnage, nothing) employed to hold the load in place. For example, an experienced HHG van operator is able to pack and load at a density factor of the industry standard 7 lbs/cu ft, or about 11,200 lbs in a 1,600 cu ft trailer. 9 However, most inexperienced DIY shippers, pack and load at rate of somewhere between lbs/cu ft. There are other factors at play for the DIY shippers that can greatly impact density. If a DIY shipper uses the right amount of material and equipment, and is lucky enough to pack and load at a rate good enough to achieve a density factor of 5.5 lbs/cu ft, then they will probably only be able to move approximately 8,800 pounds in that same 1,600 cu ft trailer. 10 However, as most DIY shippers are inexperienced in loading irregularly sized commodities into trailers and are cost-conscious, it s more likely that a DIY shipper could decide to skimp on material and avoid the cost of ropes and/or straps to secure the load, and will realize a density rate of closer to 3.5 lbs/cu ft, loading only 5,600 pounds. 11 [examples of professionally packed/loaded trailer & liftvan] [example of DIY packed/loaded trailer] For these reasons, we suggest that the density information the CCSB s industry average needs additional consideration. Given the wide disparity in the types, size, shape and physical makeup of HHGs, not only between different shipments tendered by shippers, but within the shipments themselves, and in the methods in which shipments are prepared for shipment, we recommend that CCSB adopt the long-standing, reliable industry standard of 7 lbs/cu ft as the industry standard density for containerized HHG. Handling and Stowability In addressing stowability and handling, the Analysis indicated that, based on the information available HHG are typically tendered in boxes, or wooden crates that usually provide access for forklift tines. Handling and stowability should be comparable to that of other like-packaged freight, and there have been no reports of unusual or significant handling or stowing problems. 12 It, therefore, appears that the proposal did not take into account the manner in which different shippers of HHG prepare the commodity for transportation. This distinction is, we believe, important because the different type of customers dictates how the commodity will be handled and stowed. Individual shippers shipments are traditionally tendered to LTL carriers as loose-loaded, rather than crated. This method presents handling concerns. For example, if a trailer loaded by a shipper experienced a breakdown while in transit, the LTL carrier would not be able to use mechanical equipment (like a forklift) to transfer the shipment into another trailer. Additionally, the irregular characteristics of loose-loaded HHG presents stowability concerns, including: practical loading restrictions due to weight and size, difficulty in loading other freight due to protrusions of irregularly shaped items, a potential for inefficient tiering in the carriers equipment, and potential inability to load other freight on top due to the fragile nature of many uncrated HHG. A shipment tendered by a mover, however, will nearly always be tendered in a crate which can be efficiently handled with a forklift. Containers also provide a regular load-bearing surface for additional top freight and/or 9 At 7 lbs/cu ft, a professional mover is able to load approximately 11,200 lbs into a 1,600 cu ft trailer. (1,600 cu ft x 7 lb/cu ft = 11,200 lbs). 10 At 5.5 lbs/cu ft, a good DIY shipper is able to load approximately 8,800 lbs into a 1,600 cu ft trailer (1,600 cu ft x 5.5 lb/cu ft = 8800 lbs). 11At 3.5 lbs per cubic foot, other DIY shippers can load approximately 5,600 lbs into a 1600 cu ft trailer (1,600 cu ft. x 3.5 lbs/cu ft = 5,600 lbs. 12 See, CCSB Docket , Research Project 1217 and Background of Proposal ( Research and Background ), at Transportation Characteristics 3

12 lateral support for adjacent freight. There does not appear to be any problems or concerns related to handling and stowability when HHG are tendered to LTL carriers in this manner. The previous classification provisions appeared to acknowledge and take into account the different methods of shipping for HHG. Cancelled items and included rules addressing the different handling and stowability characteristics of HHG, giving credit of lower class to shippers that tendered HHG using the more protective methods in combination with liability factors. These provisions, however, were cancelled in the adopted reclassification proposal. We believe that certain handling and stowability considerations related to different shipping methods may not have been considered and, therefore, reconsideration of the proposal is appropriate in order to establish the reasonableness of the adopted re-classification. Liability We respectfully suggest that the proposal does not take into account current law, industry practice and the impact that those have on this commodity s liability characteristics which should call for giving those characteristics additional weight in determining the appropriate class. The differences in HHG shipment types bear considerable weight upon whether or not the commodity s liability characteristics should be considered in assigning a classification. If a shipment is tendered by an individual DIY shipper, these characteristics present more concerns when compared to shipments tendered in containers by professional movers. For example, shipments tendered by movers will be promptly secured in containers and moved to a secure warehouse facility for pick up by an LTL carrier. However, LTL carriers leave their trailers/containers in their individual customers driveways or residential streets overnight, or over a period of several days, while being loaded/unloaded by the DIY shipper. It stands to reason that individual shippers DIY HHG shipments are more likely to be susceptible to theft or damage (i.e., accidents, fires, etc.) -safely-moving-and-securing-items-inabf-u-pack-trailer moving-truckfire.jpg 13 NOTE HHG in shipping vans, boxes or crates exceeding 400 cubic feet displacement or exceeding 16 feet in length will be subject to the applicable minimum charges provided in carriers tariffs. 14 NOTE The following packing requirements must be observed, except when shipments are made in iron or steel or iron or steel and wood wheeled carriers completely filled, and except also that trunks or articles of furniture (when themselves packed or prepared for shipment as required by this Note) may be used as substitutes for boxes: Bedding, in boxes, crates, drums, wrapped bundles or wrapped rolls; Books, in boxes or drums; Carpets or rugs, in boxes, crates, drums, wrapped bundles or wrapped rolls; Clothing, draperies or linens, in boxes or drums; Furniture having surfaces liable to damage, or upholstered furniture, must be fully protected by boxing, crating or wrapping. Excelsior pads or their equivalent must be used when necessary to properly protect the articles; Glassware, packed in boxes or drums; Marble slabs, mirrors or pictures, in boxes or crates; Musical instruments, in boxes or drums; Pottery, packed in boxes or drums; Refrigerators, mechanical, must have compressor unit held securely in position, in boxes or crates, or wrapped in fiberboard and skidded, or wrapped in quilted pads; Sewing machines, in boxes or crates; Stoves or ranges, in boxes or crates when with shipments weighing less than 12,000 pounds; Trunks containing household or personal effects, when in shipments weighing less than 12,000 pounds, must be corded and locked or sealed, or in boxes or crates; All other HHG, requiring protection against breakage or chafing, must be in bags, boxes, drums, wrapped bundles or crates. 4

13 In addition, being loose-loaded increases the liability for damage to individual shippers HHGs. The moving industry standard frequency of loss or damage claims for loose-loaded shipments is approximately 20%. The frequency and severity of claims filed against LTL carriers carrying containerized HHG shipments for movers is significantly lower. For example, United Van Lines and Mayflower Transit tendered approximately 30,000 containerized HHG shipments to LTL carriers in Of these shipments, we only filed 6 claims with those carriers for loss or damage or only.001% of the number of claims typically filed on professionally packed and loaded loose loaded orders. The current class structure for HHG appears to give credit to shippers for shipping methods that significantly reduce liability. We believe that the proposal ignores these beneficial considerations and should be re-visited. Finally, we acknowledge that the proposal recognizes the LTL industry practice of limiting liability to $.10/lb/article for most HHG shipments. 15 However, we respectfully suggest that proposal s view of industry practice is unreasonably narrow and ignores the trade-offs that are made when shippers agree to this minimal level of carrier liability. The current classification provides classes based on released value, subject to a minimum value per article of $.10/lb/article and up to a maximum value of $5.00/lb/shipment. Far from being archaic, the current classification structure is consistent with current law and industry practices. Title 49 U.S.C (f) and Amendment No. 5 to STB RRO 999 establish valuation levels for HHG shipments moved by a HHG Motor Carrier or HHG Freight Forwarder (minimum of $.60/lb/article; default maximum of $6.00/lb/shipment). Property motor carriers, who haul such shipments from interlining HHG motor carriers, have an industry custom to release such shipments between $.10/lb/article to a more typical $5.00/lb/shipment in other words, the same levels that were in place in It appears that while the density of HHG may have been an important factor in establishing the original commodity class designations, that credit was given for shippers willingness to accept lower levels of carrier liability (i.e., class 125 is appropriate for the industry standard HHG density of 7 lbs/cu ft, however, a class of 100 could be achieved in exchange for the shipper being willing to accept a lower level carrier liability). The Board s proposal to compress the five different HHG classes into a single class, based solely on the questioned measures of density, appears to disregard the impact of liability on the class ratings as well as an important industry practice. In addition, the Board s current decision could be viewed as establishing carrier rates by imposing a limitation of liability requirement. Carriers are not permitted to exculpate themselves from liability and are required by applicable law to offer shippers 2 or more levels of carrier liability, with corresponding differences in their rates. One of those options must be the carrier s base rate (i.e., the released rate ) offering for no additional consideration the carrier s lowest level of liability. In this industry, the minimum released rate typically is set at $.10/lb/article. By requiring that class 150 include the carrier s released rate of $.10/lb/article, the Board has interfered with LTL carrier s rate setting, i.e., shippers that previously negotiated a lower rate at class 100 in exchange for accepting a lower level of carrier liability at $.10/lb/article, will now be forced by the Board s decision to accept that level of liability without the tradeoff of lower rates. 15 Although, in its initial proposal, CCSB indicated that no current information is available on the value of shipments moving as HHG [and] safely assume[d] a greater range of value, then proposing to increase the maximum valuation to $35.47 per pound per article is based on an adjusted Producer Price Index from See, Research and Background, supra note 12. 5

14 We are unaware that the Board has taken the step to impose limitation of liability requirements within the class rules of other commodities for which the Board has also reported finding that the liability elements would significantly impact the evaluation of transportation characteristics. Therefore, even if the Board s other findings related to density, handling and stowability were reasonable compared to other commodities, we suggest that the imposition of a $.10/lb/article requirement for HHG at class 150 is not so-reasonable and should be reconsidered. Based on the unique characteristics of HHG and the long-standing industry practices, we recommend that the Board reconsider its decision to eliminate the current five class structure for HHG. The current structure recognizes the unique handling, stowability and liability factors inherent in this commodity and provides shippers and carriers with the ability to freely negotiate rates and terms appropriate to their relative situations. Procedural Concerns Finally, we respectfully suggest that the current reclassification proceeding was not necessary. The Board s Policies and Directives Pertaining to the National Motor Freight Classification require that the Board update the provisions of the NMFC in certain situations to establish new, or amend existing classifications for: 1) new commodities; 2) reflecting changes in transportation characteristics; 3) commodities classed by analogy; and 4) commodities that are a source, or potential sources, of interpretation disputes so as to eliminate or avoid those disputes. 16 Despite broad statements made in the Board s Research analysis, none of these circumstances exist. As professional HHG movers, we can attest that there have been no real changes to the type of HHG shipped (while there have been technological advances since 1937, a couch is still a couch ). Nor have there been any real or potential disputes relating to the classification, rather, the factors established in 1937 still permit reliable and easy negotiation between shippers and LTL carriers today. To the extent that any updating is necessary (i.e., removing obsolete provisions, etc.) simple housekeeping measures are available under the Directives and, we suggest, are more appropriate at this time without the need to reclassify HHG. 17 We also believe that more thorough research in connection with a classification was required 18 and could have provided additional helpful clarification and information. However, in conducting the research relied upon in the instant reclassification proposal, CCSB determined it to be unfeasible to seek such information from shippers. 19 During its research and analysis, CCSB did not attempt to contact any shippers or trade associations. Therefore, we are concerned that the proposal may not have included all applicable and necessary information. As indicated in this petition for reconsideration, AMSA s members, which include HHG motor carrier shippers have relevant information to share with CCSB, and should have been very easy to identify. 16 See Policy I.C., Commodity Classification Standards Board Policies; Classification Updating, of the Directives. 17 See Policy I.D., Commodity Classification Standards Board Policies; Clarification, Simplification and Uniformity, of the Directives. 18 See 1 Commodity Classification Standards Board Policies and Directives Pertaining to the National Motor Freight Classification, Appendix, Part II. Commodity Classification Standards Board Directives, A. Research (Board shall make a reasonable effort to identify and contact potential shippers of the involved commodities [and to] also search for and attempt to contact trade associations having members with potential interest in the commodity to obtain[] relevant information. ) 19 See, Research and Background, supra Note 12 ( Given that anyone who has ever moved, or will ever move, may be a potential shipper of household goods, a questionnaire survey was deemed to be unfeasible. ) 6