[Federal Register Volume 77, Number 129 (Thursday, July 5, 2012)]
[Proposed Rules]
[Pages 39662-39666]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-16177]
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DEPARTMENT OF TRANSPORTATION
Pipeline and Hazardous Materials Safety Administration
49 CFR Parts 171, 173, and 178
[Docket No. PHMSA-2011-0143 (HM-253)]
RIN 2137-AE81
Hazardous Materials; Reverse Logistics (RRR)
AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
DOT.
ACTION: Advance notice of proposed rulemaking (ANPRM).
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SUMMARY: PHMSA is publishing this ANPRM to identify ways to reduce the
regulatory burden for persons who ship consumer products containing
hazardous materials in the ``reverse logistics'' supply chain. Reverse
logistics is the process that is initiated when a consumer product goes
backwards in the distribution chain. It may be initiated by the
consumer, the retailer, or anyone else in the chain. Therefore, the
process may involve consumers, retailers, manufacturers, and even
disposal facilities. Following this ANPRM, PHMSA anticipates publishing
an NPRM that will propose to simplify the regulations for reverse
logistics shipments and provide avenue means for regulatory compliance
that maintains transportation safety. This action is part of DOT's
retrospective plan under EO 13563 completed in August 2011 DOT's plan
is available at: http://www.dot.gov/open/docs/dot-final-rrr-plan-08-23-2011.pdf. To fully engage the broad spectrum of stakeholders affected
by reverse logistics, this ANPRM solicits comments and input on several
questions in the context of reverse logistics. Any comments, data, and
information received will be used to evaluate and shape the proposals
in the NPRM.
DATES: Comments must be received by October 3, 2012.
ADDRESSES: You may submit comments identified by the docket number
PHMSA-2011-0143 (HM-253) by any of the following methods:
Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting
comments.
Fax: 1-202-493-2251.
Mail: Docket Management System, U.S. Department of
Transportation, Dockets Operations, M-30, Ground Floor, Room W12-140,
1200 New Jersey Avenue SE., Washington, DC 20590.
Hand Delivery: U.S. Department of Transportation To Docket
Operations, M-30, Ground Floor, Room W12-140 in the West Building, 1200
New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal Holidays.
Instructions: All submissions must include the agency name and
docket number (PHMSA-2011-0143) or RIN (RIN 2137-AE81) for this notice
at the beginning of the comment. Note that all comments received will
be posted without change to the docket management system, including any
personal information provided. If sent by mail, comments must be
submitted in duplicated. Persons wishing to receive confirmation of
receipt of their comments must include a self-addressed stamped
postcard.
Docket: For access to the dockets to read background documents or
comments received, go to http://www.regulations.gov or DOT's Docket
Operations Office (see ADDRESSES).
Privacy Act: Anyone is able to search the electronic form of any
written communications and comments received into any of our dockets by
the name of the individual submitting the document (or signing the
document, if submitted on behalf of an association, business, labor
union, etc.). You may review DOT's complete Privacy Act Statement in
the Federal Register published on April 11, 2000 [45 FR 19477] or you
may visit http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Steven Andrews, Office of Hazardous
Materials Standards, Pipeline and Hazardous Materials Safety
Administration, U.S. Department of Transportation, 1200 New Jersey
Avenue SE., Washington, DC 20590-0001, telephone (202) 366-8553.
SUPPLEMENTARY INFORMATION:
I. Background
In general, ``reverse logistics'' pertains to the safe return of
goods from the marketplace to the original vendor, manufacturer, or
supplier. Reverse logistics of hazardous materials affects many
industries including high-tech, retail, medical, pharmaceutical,
automotive, and aerospace. In effect, reverse logistics is the supply
chain in reverse. PHMSA is publishing this ANPRM to identify possible
ways to reduce the regulatory burden on retail outlets that ship
consumer products containing hazardous materials in the ``reverse
logistics'' supply chain. PHMSA is looking to evaluate the shipment of
``reverse logistics'' by
[[Page 39663]]
highway, rail, and vessel. In addition, PHMSA received two petitions
from industry regarding the shipping requirements for ``reverse
logistics'' shipments. These petitions are outlined as follows:
P-1528
PHMSA received a petition from the Council on the Safe
Transportation of Hazardous Articles Inc. (COSTHA) outlining issues
related to hazardous materials and ``reverse logistics.'' In its
petition for rulemaking (P-1528), COSTHA proposed that the HMR include
a definition for ``reverse logistics'' in Sec. 171.8 and add a new
section, Sec. 173.157 to outline the general requirements and
exceptions for hazardous materials shipped in the context of ``reverse
logistics.'' In its petition COSTHA identified an unquantifiable
exposure to risk presented through undeclared hazmat from retail
outlets. This includes retail operations that unknowingly return
articles containing hazardous materials to the product manufacturing
that are potentially compromised. The purpose of this ANPRM is to
gather data on how these hazardous materials are shipped with respect
to ``reverse logistics.''
COSTHA noted that hazardous materials commonly shipped from
distribution centers to various retail outlets are often shipped under
the ORM-D exception. PHMSA notes that the ORM-D exception allows for a
hazardous material, which is a limited quantity and which meets the
consumer commodity definition, to be reclassified as an ORM-D and
assigned a consumer commodity shipping name. However, in a final rule
issued under docket HM-215K (76 FR 3308, January 19, 2011), PHMSA began
phasing out the ORM-D hazard class. Based on the final rule, the phase-
out of the ORM-D system will be completed on December 31, 2014. Those
materials previously shipped under the ORM-D hazard class may be able
to be shipped as consumer commodities under the appropriate limited
quantities exception in part 173.
COSTHA has indicated that a significant volume of these hazardous
materials are returned to the retail outlet by the customer. PHMSA
believes based on its enforcement experience that significant
quantities of these returned hazardous materials may be in damaged
packaging or even leaking prior to their shipment back to the return
center. If this is the case, the materials must be repackaged and
shipped as fully regulated hazardous materials under the HMR. The HMR
generally defines a ``hazmat employee'' as a person employed on a full-
time, part time, or temporary basis by a hazmat employer and who in the
course of such full time, part time or temporary employment directly
affects hazardous materials transportation safety. However, PHMSA
recognizes that most retail employees or other related employees are
not readily identifiable as ``hazmat employees'' as defined by Sec.
171.8 of the HMR. Consequently this results in employees that often
lack sufficient training and qualifications to classify, package, mark,
label, and ship hazardous materials. This may result in unsafe shipping
practices (e.g., hazardous materials shipped in containers that are not
designed for the safe transportation of hazardous materials.) These
occurrences are often exacerbated by hazardous materials being
improperly segregated in packages. COSTHA also noted that equipment
powered by internal combustion engines may be returned to retail
outlets after being used and may contain residual fuel, posing a
hazardous materials risk.
P-1561
PHMSA received a petition (P-1561) from the Battery Council
International (Battery Council). In its petition, the Battery Council
requests that PHMSA allow the shipment of used batteries from multiple
shippers on a single transport vehicle under the exception provided in
Sec. 173.159(e). The Battery Council notes in their petition that
currently the exception in Sec. 173.159(e) does not clearly allow for
shipment of used batteries from multiple shippers for the purposes of
recycling. The petition also notes that, when this regulation was
written in 1969, it was not common practice for battery to be recycled
using multiple shippers. PHMSA believes that the collection of these
used batteries for return, disposal, or recycling falls within the
realm of ``reverse logistics.'' Currently Sec. 173.159(e)(4) prevents
a battery recycler from picking up shipments of used batteries from
multiple locations. In looking at incident history, PHMSA has not
identified any significant incidents involving the shipment of wet lead
acid batteries. PHMSA believes that modifying this section to allow
battery recyclers to pick up wet lead acid batteries from multiple
locations will likely reduce the number of battery shipments on the
highway and thus reduce the likelihood of an accident involving hazmat.
II. Analysis of the Problem
Under the current HMR, consumer products that are no longer
suitable for retail sale are considered fully regulated. This presents
a problem to retail outlets in that many may not have the necessary
training or resources to handle fully regulated hazardous materials.
PHMSA is looking to identify ways to potentially reduce the regulatory
burden associated with the return of these hazardous materials in the
``reverse logistics'' supply chain, while at the same time ensuring
their safe transportation.
According to the Reverse Logistics Association (RLA), the process
of reverse logistics represents 3-15% of the Gross Domestic Product,
which is estimated between $360 billion and $1.8 trillion. Retail
outlets often accept returns of hazardous materials from customers that
are ultimately shipped back to distribution centers. Retail sales of
goods are a primary driver of goods returned. According to the 2007
Economic Census, wholesale trade in the U.S. reached $6.5 trillion (a
40% increase from the 2002 census) among 435 thousand establishments
and 6.2 million employees, while retail sales reached $3.9 trillion (a
28% increase among 1.1 million establishments and 15.5 million
employees).
In addition, we anticipate that online transactions will cause the
quantity of reverse logistics shipments to increase. Data indicate that
online purchases of hazardous materials have increased. The National
Retail Federation reported that in 2010, over 48% of all retail goods
(by value) were purchased from on-line providers with an average return
rate of 8%. Third-party logistics providers estimate that up to 7% of
an enterprise's gross sales are return costs. The third-party logistics
providers themselves earn 12% to 15% in profits on this business. PHMSA
is concerned that customers may often return opened or damaged packages
containing hazardous materials without any regard for the HMR. This
ANPRM seeks comment on whether additional language is needed to clarify
how returns of hazardous materials purchased online should be handled.
The rapidly expanding market for consumer electronics is another
topic of interest with respect to the ``reverse logistics'' supply
chain. As emerging technologies come online, there are an ever
increasing number of batteries that come along with consumer devices.
As the batteries in these devices become unusable, PHSMA expects to see
large quantities of batteries being returned to retail outlets. PHMSA
seeks comment on this assumption. This ANPRM is seeking comment on how
the retail industry should handle the recycling or disposal of these
batteries for use in consumer electronics.
[[Page 39664]]
In all of these scenarios, PHMSA enforcement efforts have shown
that hazardous materials that are returned to the distribution centers
or retail outlets are shipped in ways that are inconsistent with the
requirements of the HMR. Often, these materials and packages may be
damaged or compromised. Very often, the employees at the retail outlets
responsible for packing and shipping these materials have little or no
hazardous materials training. This may result in inadequate packaging
and hazard communication. Below we identify potential problems that may
be attributed with the reverse logistics of hazardous materials:
1. Lack of hazardous materials training by the employees at the
retail outlet;
2. Different packaging from the original packaging being used to
ship the material;
3. Lack of knowledge about the hazard class by the employee;
4. Potential for hazardous materials to be subject to Environmental
Protection Agency (EPA) waste manifest rules;
5. Items that were once classified as consumer commodities may no
longer meet that exception;
6. Undeclared hazardous materials may be shipped within the stream
of commerce;
7. Properly-marked and labeled original packaging is being
improperly re-used to ship returned products that are either not
hazardous materials or hazardous materials for which said packaging is
not authorized; and
8. These shipments may not be accompanied by appropriate hazardous
communication, such as shipping papers, emergency response numbers,
placards, labels, markings, and other requirements of the HMR.
PHMSA believes that its enforcement data show that ``reverse
logistics'' issues involving hazardous materials will continue to rise
with the increased consumption of goods in a growing economy. PHMSA
believes it could be beneficial to identify those areas where PHMSA and
the regulated community can work together to facilitate the movement of
hazardous materials in the ``reverse logistics'' supply chain. This
could include identifying whether or not there are actually safety
concerns involving ``reverse logistics'' for the transport of hazardous
materials as well as identifying potential solutions moving forward.
PHMSA invites comments on the data and information contained in
this section. How can we work together to better facilitate the
movement of hazardous materials in the ``reverse logistics'' supply
chain? What data is available regarding the current and anticipated
future number of reverse logistic shipments for hazardous materials?
III. Issues To Be Considered
As previously noted, the purpose of this ANPRM is to invite
comments on ``reverse logistics.'' PHSMA is considering a definition
for ``reverse logistics'' and a possible new section in the HMR that
will clearly identify the regulatory responsibilities of the shipper.
To assist PHMSA in getting valuable data and information from
commenters, we have compiled questions pertaining to the ``reverse
logistics'' process and welcome input from all interested parties.
Below we outline the key issues identified above:
A. Define Reverse Logistics
PHMSA is considering a regulatory definition for ``reverse
logistics.'' The definition would likely be added to 49 CFR 171.8. It
would clearly define the term ``reverse logistics.'' Generally,
``reverse logistics'' is thought of as the flow of surplus or unwanted
material, goods, or equipment back to the firm, through its logistics
chain, for reuse, recycling, or disposal. By defining ``reverse
logistics'' in the HMR, PHMSA will identify how it can assist the
regulated community in ensuring the safe and swift movement of these
materials in the ``reverse logistics'' supply chain.
B. Create a Section Pertaining to the Shippers' Responsibilities With
Respect to Reverse Logistics
PHMSA is considering adding a section outlining the shippers'
responsibilities with respect to ``reverse logistics.'' PHMSA believes
a section outlining the regulations for materials meeting the
definition of ``reverse logistics'' should address:
1. Classification of materials under the definition of ``reverse
logistics'';
2. Training requirements for employees who handle materials under
``reverse logistics;'' and
3. Packaging approved for the shipment of hazardous materials under
``reverse logistics.''
PHMSA believes that, by outlining the responsibilities of shippers
with respect to reverse logistics, it will contribute to the safe and
efficient movement of these materials in commerce. Do commenters agree
that outlining the responsibilities of the shippers with respect to
reverse logistics will promote safe and efficient movement of these
materials? Would regulated entities incur documentation costs to
develop and maintain risk assessments and operational procedures? If
so, what is a fair estimate of the potential costs?
C. Questions and Solicitation for Public Comment
PHMSA is considering regulatory relief for ``reverse logistics.''
We have developed the following questions to solicit comments on the
key issues, please provide sources for your data when available:
1. What are the types of hazardous materials and quantities that
are frequently returned?
2. What is the volume of returns? Is there a ``rule-of-thumb''
metric--e.g., 10% of retail sales are returned?
What is the current volume returned by private citizens?
What is the current volume returned by other businesses?
What are the most widely-used methods of return (U.S.
Mail, Walk-ins, Commercial Carriers, etc.)?
3. Are returns directed to a disposal facility of the original
manufacturer?
4. Should returns be the responsibility of the manufacturer?
5. To what extent should retail employees who package hazardous
materials for shipments back to the distribution centers be subject to
the training requirements in 49 CFR part 172, subpart H? Are retail
employees currently being trained for the shipment of hazardous
materials under 49 CFR part 172, subpart H?
6. Are hazardous materials being properly segregated as required by
Sec. 177.843 of the HMR when being shipped from retail outlets to
their distribution centers? How are they being segregated?
7. Should certain hazard classes/divisions be excluded when
considering regulations for ``reverse logistics?'' If so, why?
8. Should PHMSA define specification packages for materials shipped
under ``reverse logistics''? If so, why?
9. Are shipping and distribution companies assuring the safety of
their employees and the public when allowing drop-box hazardous
material returns? If so, how?
10. What precautions, if any, are these companies taking to avoid
the mixing of hazardous materials and contamination of other packages
that might contain hazardous materials and/or non-hazardous materials?
11. What role(s) do 3rd party logistics providers \1\ play in the
reverse logistics process, if any?
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\1\ The Reverse Logistics Association (RLA) defines 3rd party
logistics providers as entities who ``provide services for OEMs,
ODMs and Branded Companies. Some of these services include, but are
not limited to: Repair, customer service, parts management, end-of-
life manufacturing, returns processing order fulfillment, help desk,
and many aspects of field service repair.''
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[[Page 39665]]
12. Have any specific safety risks been observed in returns of
hazardous materials products that need to be addressed through
rulemaking? If so, how should they be addressed and why?
13. How does the regulated community currently handle hazardous
materials that are imported and must then be shipped back in the
``reverse logistics'' supply chain?
14. What data is available regarding the current and anticipated
future number of reverse logistic shipments for hazardous materials?
15. Should PHMSA define ``reverse logistics''? If so, to what
extent should PHMSA define types of shipments that would receive a
relaxation under the HRM for ``reverse logistics'' shipments?
If commenters suggest modification to the existing regulatory
requirements, PHMSA requests that commenters be as specific as
possible. In addition, PHMSA requests commenters to provide information
and supporting data related to:
1. The potential costs of modifying the existing regulatory
requirements pursuant to the commenter's suggestions.
2. The potential quantifiable safety and societal benefits of
modifying the existing regulatory requirements.
3. The potential impacts on small businesses of modifying the
existing regulatory requirements.
4. The potential environmental impacts of modifying the existing
regulatory requirements
IV. Regulatory Issues
A. Executive Order 12866, Executive Order 13563, and DOT Regulatory
Policies and Procedures
Executive Orders 12866 (``Regulatory Planning and Review'') and
13563 (``Improving Regulation and Regulatory Review'') require agencies
to regulate in the ``most cost-effective manner,'' to make a ``reasoned
determination that the benefits of the intended regulation justify its
costs,'' and to develop regulations that ``impose the least burden on
society.''
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, of reducing costs, of harmonizing rules, and of
promoting flexibility. This rule has been designated a ``significant
regulatory action,'' although not economically significant, under
section 3(f) of Executive Order 12866. Accordingly, the rule has been
reviewed by the Office of Management and Budget (OMB). The ANPRM is
considered a significant regulatory action under the Regulatory
Policies and Procedures order issued by the Department of
Transportation [44 FR 11034].
Executive PHMSA invites comments on this section. How should we
approach the ``reverse logistics'' issue to ensure that we regulate in
the ``most cost-effective manner?'' Please provide any cost or benefit
figures to support that approach along with any sources that were used
to obtain the information.
B. Executive Order 13132
E.O. 13132 requires agencies to assure meaningful and timely input
by state and local officials in the development of regulatory policies
that may have a substantial, direct effect on the states, on the
relationship between the national government and the states, or on the
distribution of power and responsibilities among the various levels of
government. We invite state and local governments with an interest in
this rulemaking to comment on any effect that revisions to the HMR
relative to reverse logistics may cause.
C. Executive Order 13175
E.O. 13175 requires agencies to assure meaningful and timely input
from Indian tribal government representatives in the development of
rules that ``significantly or uniquely affect'' Indian communities and
that impose ``substantial and direct compliance costs'' on such
communities. We invite Indian tribal governments to provide comments if
they believe there will be an impact.
D. Regulatory Flexibility Act, Executive Order 13272, and DOT Policies
and Procedures
Under the Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et
seq.), we must consider whether a rulemaking would have a significant
economic impact on a substantial number of small entities. ``Small
entities'' include small businesses, not-for-profit organizations that
are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations under 50,000.
If you believe that revisions to the HMR relative to reverse logistics
would have a significant economic impact on a substantial number of
small entities, please submit a comment to explain how and to what
extent your business or organization could be affected and whether
there are alternative approaches to this regulations the agency should
consider that would minimize any significant impact on small business
while still meeting the agency's statutory objectives
Any future proposed rule would be developed in accordance with
Executive Order 13272 (``Proper Consideration of Small Entities in
Agency Rulemaking'') and DOT's procedures and policies to promote
compliance with the Regulatory Flexibility Act to ensure that potential
impacts on small entities of a regulatory action are properly
considered.
E. Paperwork Reduction Act
Section 1320.8(d), Title 5, Code of Federal Regulations requires
that PHMSA provide interested members of the public and affected
agencies an opportunity to comment on information collection and
recordkeeping requests. It is possible that new or revised information
collection requirements could occur as a result of any future
rulemaking action. We invite comment on the need for any collection of
information and paperwork burdens, if any.
F. National Environmental Policy Act
The National Environmental Policy Act of 1969, 42 U.S.C. 4321-4375,
requires federal agencies to consider the consequences of major Federal
actions and prepare a detailed statement on actions significantly
affecting the quality of the human environment. Under regulations
promulgated by the Council on Environmental Quality (CEQ), a federal
agency may prepare an environmental assessment to determine whether it
should prepare an environmental impact statement for a particular
action. 40 CFR 1508.9(a). The environmental assessment should (1)
briefly discuss the need for the proposed action, alternatives to the
proposed action, and the probable environmental impacts of the proposed
action and alternatives; and (2) include a listing of the agencies and
persons consulted. 40 CFR 1508.9(b). PHMSA welcomes any data or
information related to environmental impacts that may result from a
reverse logistics rulemaking.
G. Privacy Act
Anyone is able to search the electronic form of any written
communications and comments received into any of our dockets by the
name of the individual submitting the document (or signing the
document, if submitted on behalf of an association, business, labor
union, etc.). You may review DOT's complete Privacy Act
[[Page 39666]]
Statement in the Federal Register published on April 11, 2000 (65 FR
19477) or you may visit http://www.dot.gov/privacy.html.
H. Executive Order 13609 and International Trade Analysis
Under E.O. 13609, agencies must consider whether the impacts
associated with significant variations between domestic and
international regulatory approaches are unnecessary or may impair the
ability of American business to export and compete internationally. In
meeting shared challenges involving health, safety, labor, security,
environmental, and other issues, international regulatory cooperation
can identify approaches that are at least as protective as those that
are or would be adopted in the absence of such cooperation.
International regulatory cooperation can also reduce, eliminate, or
prevent unnecessary differences in regulatory requirements.
Similarly, the Trade Agreements Act of 1979 (Pub. L. 96-39), as
amended by the Uruguay Round Agreements Act (Pub. L. 103-465),
prohibits Federal agencies from establishing any standards or engaging
in related activities that create unnecessary obstacles to the foreign
commerce of the United States. For purposes of these requirements,
Federal agencies may participate in the establishment of international
standards, so long as the standards have a legitimate domestic
objective, such as providing for safety, and do not operate to exclude
imports that meet this objective. The statute also requires
consideration of international standards and, where appropriate, that
they be the basis for U.S. standards.
PHMSA participates in the establishment of international standards
in order to protect the safety of the American public, and we have
assessed the effects of the proposed rule to ensure that it does not
cause unnecessary obstacles to foreign trade. Accordingly, this
rulemaking is consistent with E.O. 13609 and PHMSA's obligations under
the Trade Agreement Act, as amended.
I. Statutory/Legal Authority for This Rulemaking
49 U.S.C. 5103(b) authorizes the Secretary of Transportation to
prescribe regulations for the safe transportation, including security,
of hazardous materials in intrastate, interstate, and foreign commerce.
Our goal in this ANPRM is to gather the necessary information to
determine a course of action in a potential Notice of Proposed
Rulemaking (NPRM) associated with the issue of reverse logistics for
the transportation of hazardous materials.
J. Regulation Identifier Number (RIN)
A regulation identifier number (RIN) is assigned to each regulatory
action listed in the Unified Agenda of Federal Regulations. The
Regulatory Information Service Center publishes the Unified Agenda in
April and October of each year. The RIN contained in the heading of
this document can be used to cross-reference this action with the
Unified Agenda.
Issued in Washington, DC, on June 27, 2012 under authority
delegated in 49 CFR part 106.
William Schoonover,
Deputy Associate Administrator for Field Operations, Pipeline and
Hazardous Materials Safety Administration.
[FR Doc. 2012-16177 Filed 7-3-12; 8:45 am]
BILLING CODE 4910-60-P