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 Provisions Item Description Class RACKS: subject to item 163900 164340 Pallet, Storage or Warehouse, see Note, item 164342, iron or steel, KD, in packages: Sub 1 NOI... 92.5 Sub 2 Disassembled, see Note, item 164343... 65 164342 NOTE Applies only on floor standing racks having a frame rated capacity of not less than 7,000 pounds; or on frames or fixtures for attaching to pallets, to enable stacking of loaded pallets upon each other. 164343 NOTE Decks, vertical posts, support members, and all accessorial fittings and hardware must be disassembled from each other and the remainder of the unit. Proposed Classification Provisions Item Description Class RACKS: subject to item 163900 164340 Pallet or Warehouse, metal, or Parts or Sections thereof, NOI, with or without components of other materials, in packages, see Note, item NEW: Sub 1 Greatest dimension exceeding 288 inches... 300 Sub 2 Greatest dimension exceeding 192 inches but not exceeding 288 inches... 200 Sub 3 Greatest dimension exceeding 96 inches but not exceeding 192 inches... 125 Sub 4 Greatest dimension not exceeding 96 inches, subject to Item 170 and having a density in pounds per cubic foot of: Sub 5 Less than 12... 125 Sub 6 12 or greater... 65 164342 NOTE Cancel; no further application. 164343 NOTE Cancel; no further application. NEW NOTE Greatest dimension refers to the longest straight-line dimension of the handling unit as tendered for shipment. 2014 National Motor Freight Traffic Association, Inc. Subject 4, Page 1 of 7
Analysis Research Project 1198 This proposal is based on information developed through Research Project 1198, pertaining to pallet, storage or warehouse racks, as embraced under item 164340. Hereinafter these products will be referred to as warehouse racks. Research Project 1198 was initiated in August 2013 as shipment reports indicated densities inconsistent with the present provisions of item 164340. In addition, there have been longstanding interpretive issues with the entry first, with so-called flat shipments in panel form, and second, with shipments that are disassembled which has led to questions on the proper application of sub 1 versus sub 2. As part of the research, 101 potential manufacturers or shippers and six trade associations believed to represent those companies were sent commodity questionnaires in November of 2013, and for non-respondents, again in January of 2014. One questionnaire was returned as undeliverable and two companies responded affirmatively; however, only one company provided usable information. The leading trade association for the material handling, logistics and supply chain sectors Material Handling Industry responded and agreed to forward the questionnaire to its membership. No responses were received from the remaining associations. History of Provisions The item originally evolved out of provisions established back in 1948 for bar, pipe or rod storage racks. Further research reveals that early considerations were given to products in either a flat or panel-like form versus product shipments that were not panel-like. Some docket records are no longer available, but general density information obtained from the CCSB s files indicates a density range from 10 pcf (for decks not completely removed) to upwards of 28 pcf (for decks removed). The 7,000-pound frame rated capacity threshold was used to confine the entry to heavy, industrial racks, while excluding lightweight shelving and store display units. The present provisions of item 164340 were the result of action taken on Docket 2003-3, Subject 3 (August 2003) to remove unclear language and provide a means of delineating the two subprovisions on the basis of whether or not all support members of the rack were disassembled from each other. The change first appeared in Supplement 6 to NMF 100-AC, effective October 25, 2003. About Warehouse Racks The products in question are the large storage rack assemblies commonly utilized in warehouses or retail businesses for supporting stock materials or palletized merchandise. These racks are generally made of structural steel or aluminum 1, with angles, bars, beams, welded 1 Item 164340 is currently restricted to racks of iron or steel construction. Subject 4, Page 2 of 7 2014 National Motor Freight Traffic Association, Inc.
tubing, or similar materials, and are available in a variety of dimensions as depicted in the following photos. Shipments of Warehouse Racks Warehouse racks are generally unassembled for shipment to the extent that decks are separated from the vertical members or legs. The uprights or frames and the cross members or beams are generally banded together in bundles for shipment. Some may be banded or affixed to one or multiple lift truck skids or pallets, or they may be simply tendered without any base support. Some may be tendered on edge, while others may be loaded flat, as depicted below. Reported warehouse rack shipments have not been observed with any frame rated capacity noted, nor on frames or fixtures to enable stacking of loaded pallets upon each other. 2014 National Motor Freight Traffic Association, Inc. Subject 4, Page 3 of 7
Transportation Characteristics Density The information of record includes 975 density observations submitted by shippers and carriers, obtained during CCSB dock surveys and obtained from the CCSB Density Study 2. The densities range from 0.96 to 141.00 pcf, with an average density of 11.86 pcf. A frequency distribution of the overall density range is shown below. Frequency Distribution % of Figures in Interval 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 0.31% 0.72% 6.36% 16.10% 21.95% 16.31% 10.15% 10.87% 8.21% 3.90% 5.13% Density Intervals (pcf) When the data is evaluated based on greatest dimension, where known, the ranges and averages are as shown in the table on the next page. It should be noted that ranges overlap, and as the greatest dimension increases, the average density decreases. However, when greatest dimension does not exceed 96 inches, density becomes more of a controlling factor than when the greatest dimension exceeds 96 inches. For this reason, where greatest dimension does not exceed 96 inches the data has been evaluated with a break at 12 pcf. 2 The Density Study is part of an ongoing effort by the CCSB to collect information on actual shipments; it is not tied to any particular research project, nor does it target any particular product category. Carriers that choose to participate in the study periodically submit shipment data captured through their respective freight auditing programs. The data is identified by NMFC item, and only verifiable data points, which include the weight and the dimensions and/or cube of the shipping unit involved, are used. Subject 4, Page 4 of 7 2014 National Motor Freight Traffic Association, Inc.
Greatest Dimension Density Range (pcf) Average Density (pcf) Exceeding 288 inches 3.70 9.33 6.17 Exceeding 192 inches but not exceeding 288 inches 0.96 51.13 7.91 Exceeding 96 inches but not exceeding 192 inches 1.00 61.71 9.53 Not exceeding 96 inches and density less than 12 pcf 2.12 11.88 7.59 Not exceeding 96 inches and density 12 pcf or greater 12.01 141.00 25.59 Handling Warehouse racks vary greatly in size, with reported lengths, as shipped, of up to 360 inches (30 feet) and an average length of approximately 10 feet. As the length/size increases, the handling into and out of the vehicle becomes considerably more difficult, and certain equipment, or additional personnel, may be necessary to safely handle long and heavy shipments. Furthermore, as length increases, cross-dock operations can be significantly affected. Often there is not enough room at carrier facilities to safely or readily handle and maneuver excessively long units. Stowability These articles are generally tendered loose or in bundles, and may be shipped on lift truck skids or pallets. Excessively long/large and heavy rack units may be difficult to stow with other general freight and will typically require floor loading. Depending on the length of the handling unit, and the mix of other product shipments to be loaded in the same vehicle, the carrier will have to ensure that the freight will fit in the vehicle. Also, while a flat loadbearing surface may be available for other freight, it can be difficult for the carrier to make optimal use of the remaining vehicle space due to the sometimes bulky and unwieldy configuration of the involved units. And in some reported instances, handling units bear shipper instructions, Do Not Double Stack. Liability Warehouse racks are not perishable, susceptible to theft, nor hazardous in nature. However, given the inherent nature and size of the units, they are usually shipped with little or no protection, and hence, are susceptible to damage. Consequently, some carriers have reported a reluctance to handle this freight since repairs cannot be effected. Reported claims ratios range from 0.02% to 2.43%. No information on the value of warehouse racks was obtained. Relationship to CCSB Policies and Guidelines CCSB policies state that classification provisions that are a source, or potential source, of interpretation disputes should be amended so as to eliminate or avoid those disputes. As mentioned, item 164340 has long been the source of interpretive difficulty as to the application of the two subprovisions, and in this regard, determining compliance with Note, item 164343, especially with respect to vertical supports that have welded cross members, or separate sections or parts. This proposal would address the interpretation issues by eliminating the current distinction of whether or not these units are disassembled and providing for parts or sections thereof. Concurrently, the description of item 164340 would be updated for clarification and simplification. 2014 National Motor Freight Traffic Association, Inc. Subject 4, Page 5 of 7
CCSB policies also state that classifications should reflect a commodity s known transportation characteristics. The information of record includes 975 density observations, which average 11.86 pcf, with a range from 0.96 to 141.00 pcf. Under CCSB guidelines, an average density of 11.86 pcf would generally call for a class 92.5, absent any negative handling, stowability or liability considerations. However, as discussed in this analysis, warehouse racks exhibit significant negative handling, stowability and liability considerations. Specifically, it was found that greatest dimension has the most considerable effect on the transportability of these products, and as greatest dimension increases the issues increase exponentially. The following table identifies the resulting average densities, classes based on CCSB density guidelines and the proposed classes when the data is evaluated based on greatest dimension (in eight-foot increments). Greatest Dimension Average Density (pcf) Class Based on CCSB Density Guidelines Proposed Class Exceeding 288 inches 6.17 150 300 Exceeding 192 inches but not exceeding 288 inches Exceeding 96 inches but not exceeding 192 inches Not exceeding 96 inches and density less than 12 pcf Not exceeding 96 inches and density 12 pcf or greater 7.91 125 200 9.53 100 125 7.59 125 125 25.59 65 65 Based on the information of record, as greatest dimension increases, average density generally decreases and the more difficult the articles are to handle and stow. The proposed classes account for the increasingly less-than-favorable handling and stowing characteristics. The assignment of classes 125, 200 and 300 to handling units having greatest dimension exceeding 96 inches in respective eight-foot increments reflects the increasingly significant handling and stowing problems associated with those articles. Warehouse racks having greatest dimension not exceeding 96 inches are further evaluated based on density, as it is found that density is the controlling factor for those articles. When greatest dimension does not exceed 96 inches and density is less than 12 pcf, the average density is 7.59 pcf, which meets the CCSB s minimum average density guideline of 7 pcf for the proposed class 125. When greatest dimension does not exceed 96 inches and density is 12 pcf or greater, the average density is 25.59 pcf, which meets the CCSB s minimum average density guideline of 22.5 pcf for the proposed class 65 3. Further, this proposal would cancel Notes, items 164342 and 164343, as having no further application, while a new, attendant Note to be referenced in item 164340 stating, Greatest dimension refers to the longest straight-line dimension of the handling unit as tendered for shipment, would be added in the interest of clarification. 3 The density provisions would include reference to Item (Rule) 170, the inadvertence clause. Subject 4, Page 6 of 7 2014 National Motor Freight Traffic Association, Inc.
This proposal is also consistent with classification precedent. As a result of action taken on Docket 2011-2, Subject 3 (May 2011), item 52190, naming iron or steel pipe or tubing, was established to provide classes based on greatest dimension of the handling unit as tendered for shipment, with a corresponding class adjustment for each eight-foot incremental increase, and a density break where greatest dimension does not exceed 96 inches. The proposal was approved as docketed, and the provisions first appeared in Supplement 2 to NMF 100-AK, effective July 23, 2011. Based on the information of record, this proposal, as docketed, is in keeping with CCSB policies and precedent. 2014 National Motor Freight Traffic Association, Inc. Subject 4, Page 7 of 7