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DOT Asks for Comments on Potential Streamlining of Transport Rules for “Reverse Logistics” Involving Products That Are Hazardous Materials

Beveridge & Diamond, P.C., July 9, 2012

On July 5, 2012, the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) within the U.S. Department of Transportation (“DOT”) issued an Advanced Notice of Proposed Rulemaking (“ANPRM”) seeking public comments on whether there is a need to simplify the existing Hazardous Materials Regulations (“HMR”) as they apply to “reverse logistics” for products that qualify as hazardous materials.  See 77 Fed. Reg. 39,662 (July 5, 2012).  Comments on the ANPRM are due on October 3, 2012. 

As described by PHMSA, reverse logistics is the process by which products go backwards in the distribution chain (e.g., from customers, to retailers, distributors, and/or manufacturers), for purposes of credit, recall, replacement, and possibly recycling or disposal.  Information previously provided to PHMSA suggests that a significant percentage of all products distributed enter the reverse logistics stream in some way, and that the percentage is increasing as online transactions continue to expand their market share.  Potentially affected products that may qualify as hazardous materials include electronics, batteries, pharmaceuticals, medical devices, automotive parts, and a variety of other consumer and industrial products.   

Based on past experience, including enforcement efforts, PHMSA believes that returned products are frequently shipped in ways that do not comply with existing regulatory requirements, such as with inappropriate or damaged packagings, inadequate labeling and/or documentation, insufficient segregation of products with incompatible hazards, lack of training of relevant personnel, etc.  PHMSA is considering modifying the current rules, so as to clarify and simplify them, while ensuring transportation safety. 

The ANPRM is particularly timely, because of ongoing developments relating to the rules for transport of “consumer commodities” that are hazardous materials.  Current rules allow limited quantities of such materials to be reclassed as “Other Regulated Materials” (“ORM-D”) and to be eligible for significantly reduced transportation requirements.  However, in early 2011, PHMSA amended the HMR in order to phase out the ORM-D classification, in favor of “limited quantity” rules that are better harmonized with the international dangerous goods regulations.  See 76 Fed. Reg. 3308 (January 19, 2011).  The phase-out of ORM-D is currently scheduled to be completed on January 1, 2013 for materials transported by aircraft, or January 1, 2014 for materials transported by other modes (i.e., truck, rail, or vessel).  However, DOT recently proposed to extend the later deadline until December 31, 2015.  See 77 Fed. Reg. 31,274 (May 25, 2012); Beveridge & Diamond PC, “DOT Proposes to Extend Transitional Period for New Rules for Transporting Consumer Commodities (ORM-D) That Are Hazardous Materials.”   

To assist in the potential development of a future proposal, PHMSA is seeking public comments on a number of specific issues, mostly focused on the following key topics:

o          The nature and magnitude of current and anticipated future reverse logistics shipments for products that are hazardous materials;

o          The extent of any actual safety concerns associated with such reverse logistics shipments; and

o          Potential solutions for facilitating reverse logistics shipments, while maintaining transportation safety.

The ANPRM was issued as part of DOT’s Retrospective Regulatory Review (“RRR”) Plan developed under Executive Order 13563 on Improving Regulation and Regulatory Review.  See 76 Fed. Reg. 3821 (January 21, 2011).  It was also developed in part as a response to two rulemaking petitions that PHMSA had received, one from the Council on the Safe Transport of Hazardous Articles Inc. (“COSTHA”) and the other from the Battery Council International. 

For more information about these developments, please contact Aaron Goldberg at agoldberg@bdlaw.com or Elizabeth Richardson at erichardson@bdlaw.com.