By Jeryl L. Olson and Craig B. Simonsen

The Pipeline and Hazardous Material Safety Administration (PHMSA) has proposed to modify its hazardous materials regulations as it affects the retail industry by adding a definition for “reverse logistics.” 79 Fed. Reg. 46748 (August 11, 2014).

PHMSA has been working on the proposal since July 2012, when it had requested public comment to assist it in forming a “reverse logistics policy” tailored to the unique requirements of hazardous materials transportation associated with the retail industry product returns which may involve product recalls, expired products, seasonality, broken consumer packaging, and customer returns of products containing hazardous materials. In the Advanced Notice of Proposed Rulemaking, 77 Fed. Reg. 39662 (July 5, 2012), PHMSA defines reverse logistics as “the process initiated when a consumer product goes backwards in the supply chain, such as an item being returned to a store by a customer, or when a local retailer sends unused merchandise back to a regional distributor.”

The PHMSA Administrator, Cynthia Quarterman, noted that “reverse logistics is already a complex process, and when hazmat items are involved, the potential for error greatly increases.” “We are working with industry trade groups and stakeholders to devise a safety solution that provides a clear definition for reverse logistics in a hazmat context without being unnecessarily burdensome.” The proposal would create a new section in the Hazardous Materials Regulations (49 CFR Parts 171–180) to add provisions for a reverse logistics scheme. The PHMSA notes that “by creating an exception from existing regulations for certain reverse logistics shipments, this [proposed rule] offers opportunities for reduced compliance costs among hazmat shippers and carriers, without any decrease in safety.”

In addition, the rulemaking intends to solve a reverse logistics issue related to the transportation of used automobile batteries to recycling centers. This change to the regulations, it is suggested, “will reduce the burden on the regulated community when consolidating shipments of lead acid batteries for recycling.”

Specifically, the proposed rule intends to do the following:

• Define the term “reverse logistics”;
• Establish regulations for the shipment of products containing hazardous materials in the retail industry reverse logistics supply chain;
• Establish clear applicability to the training requirements associated with “reverse logistics” shipments;
• Provide authorized packaging for reverse logistics shipments;
• Establish segregation requirements for reverse logistics shipments; and
• Allow more flexibility for the transportation of lead acid batteries.

Retailers, distributors, shippers, carriers, and reverse logistic companies may wish to review the proposal closely — especially if you had participated in or commented on the Advanced Notice of Proposed Rulemaking — for provisions that may belie the PHMSA’s stated conclusion that there will be little new costs associated with the implementation of these new rules, or other provisions.

The comment deadline, in this Docket No. PHMSA-2011-0143, is November 10, 2014.