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PHMSA issues 'reverse logistics' rule.

The U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) published its final rule concerning "reverse logistics" in the Federal Register on March 31.

The final rule creates a new section in the Hazardous Materials Regulations (HMR) to identify the regulatory responsibilities of the shipper for reverse logistics, that is, the safe return of goods from the consumer/marketplace to the vendor, manufacturer, or supplier for reuse, recycling, or disposal. Currently, shippers and retailers must comply with the HMR when returning the products to the distribution facility with the same precautions as the original product shipment.

According to PHMSA, the rule would offer retailers, truckers, electrical manufacturers, and others savings between $5 million to $11 million annually in training, shipment preparation, and battery recycling transportation costs; furthermore, safety would not be altered by simplified requirements for segregation of hazmat materials.

While the rule largely focuses on batteries, a wide range of materials, including paint and allied products, could be covered as well. Reverse logistics is a very significant issue for the paint and coatings industry in light of the current emphasis on hazardous waste collection activities, extended producer responsibility, and ACA's PaintCare[R] program. As such, in November 2014, ACA submitted comments to PHMSA on its then proposed rulemaking, supporting a definition for "reverse logistics," as long as the definition is broad enough to capture recycling, business-to-business transactions, and return scenarios that exist in the marketplace, which ACA expressed in its comments. ACA suggested inclusion of the term "recycling" in the definition as well as concern for the inclusion of "proper disposal" and the relationship to EPA regulations.

The final rule creates a new provision for reverse logistics, 173.157, and develops streamlined requirements that essentially track the limited quantity provisions. The final rule also reduces battery transport requirements by allowing companies to consolidate more used automobile batteries into fewer shipments on highways, as well as diminishes training requirements for employees involved in reverse shipping of hazmat products, requiring that employees at minimum know what hazmat is being shipped back to the distribution centers. Lastly, the rule allows for the mixing of hazard classes in the same shipment, as long as the individual packages being shipped are not leaking.

A significant amount of commercial traffic is devoted to "returning" consumer goods to retailers and manufacturers. Some of these consumer goods are considered dangerous under the HMR but are not being transported in compliance with the regulations. The rulemaking is the result of two petitions: one by the Council for the Safe Transportation of Hazardous Articles (COSTHA), the other by the Battery Council International. COSTHA had requested that PHMSA define the term "reverse logistics," and establish a new section in the HMR to address this activity; the Battery Council sought authorization to ship used batteries from multiple shippers on a single transport vehicle, as they engage in "reverse logistics."

In its comments, ACA underscored the wide range of products in the coatings industry that are "returned"; the "reversed" distribution network that these products populate; and potential solutions that will streamline this process for consumers, retailers, manufacturers, and hazardous waste collection sites. ACA also pointed out to PHMSA that non-bulk and bulk packagings, such as Intermediate Bulk Containers (IBCs) that contain residue, are also a part of the "reverse logistics" stream of commerce. These packagings are typically being returned for reuse and reprocessing. ACA requested that PHMSA include residue packagings in non-bulk and semi-bulk sizes (IBCs) in their considerations when developing a regulatory framework for reverse logistics. PHMSA, however, declined to embrace this concept and made clear that the reverse logistics provisions apply to commodities that originated at retail.

In addition to the consumer returns and business-to-business returns, ACA detailed that it and its members are engaged in "reverse logistics" in the post-consumer arena with ACA's paint collection program, PaintCare[R]. PaintCare[R] oversees the operation of statewide systems for the collection of post-consumer paint. The collected paint is managed according to a waste management hierarchy emphasizing reuse, recycling, energy recovery, and proper disposal. At these collection sites, which, in many instances, are at retail locations, post-consumer paint is collected and then transported to facilities for the aforementioned purposes. Approximately 30% of the materials collected at these sites are regulated hazardous materials and must be transported under the requirements of a special permit, as authorized under the HMR.

ACA specifically requested the inclusion of the provisions of Special Provision 149, which allows one-gallon cans of PG II products to be considered an LQ (limited quantity). ACA even suggested to PHMSA that five gallon pails of flammable paint--a very common paint product in the consumer marketplace-should be authorized under reverse logistics. PHMSA did not agree with ACA's arguments on this point, indicating that it was beyond the scope of this rulemaking and suggested that ACA should file a petition for rulemaking to address this separately.

In the final rule, PHMSA establishes packaging requirements, an alternative mark that can be used for reverse logistics along with streamlined training requirements. PHMSA also clearly limits use of reverse logistics to the highway mode and incident reporting is required.

Contact ACA's Heidi McAuliffe (hmcauliffe for more information.
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Title Annotation:ACA Issues In-Depth
Publication:JCT CoatingsTech
Date:Jun 1, 2016
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