Richard Sieg, Regulatory Counsel, Inmar
Last month, we discussed the new Lithium Battery shipping requirements and the February 6 deadline for compliance. Shortly after that article, the Pipeline and Hazardous Materials Safety Administration (PHSMA) of the Department of Transportation extended the compliance date until August 7 for all modes of transportation except air. This extension is the direct result of formal comments submitted to the agency by multiple stakeholders outlining the difficult challenges facing retailers who attempt to comply with the new regulatory requirements.
The Retail Industry Leaders Association, the Food Marketing Institute, the National Retail Federation, and the Rechargeable Battery Association submitted a “joint request” for this six-month extension because there was insufficient time to comply with the new requirements. It is true that the new requirements are significant, as they require domestic ground shipments of lithium batteries (and associated products) to conform to shipping standards previously only required for international air and sea transportation.
To comply with this new rule, retailers must manage more detailed information, such as the number of lithium cells or batteries contained in a package and whether a package contains lithium ion or lithium metal cells or batteries. This data does not currently exist in any format in the retail sector. Systematic solutions are being developed to manage this compliance data, but it is not ready. By granting six additional months, PHMSA is giving retailers time to build the IT infrastructure to manage these new requirements.
All of the information above was published in the Federal Register notice referenced above. But, there is more to this. The new marking and labeling requirements for small and medium sized lithium batteries come with subtle, but important, decisions that must be made to determine how to label, mark and place hazard communication documentation on the package. The new requirements dictate that anyone handling these packages must be able to discern whether lithium ion and/or lithium batteries are in the package and whether the batteries are small or medium sized.
Given the tens of thousands of consumer products impacted by this rule, retailers must deftly and systematically manage the decision tree that results from the proper application of the new rule. If you are not working on your strategy to manage these requirements, you need to start now.
On a separate note, the U.S. Environmental Protection Agency (EPA) is evaluating whether and how it should modify its hazardous waste requirements, designed originally for the management of industrial waste for the retail sector. EPA remains in a data-gathering phase as they are trying to learn how the supply chain works, including reverse distribution.
The six-month extension granted by PHMSA provides the regulated community a great example of why we should participate in the rule-making process. It is our job to communicate the challenges to the regulatory agencies so they can properly balance the significant factors when developing such rules. It is difficult for the regulating agencies to “get it right” when creating rules if stakeholders are not communicating their challenges to the agency.
For the EPA effort, we believe that we must educate the agency on the benefits of reverse distribution and why this business model is better than other alternatives. “Point of Generation” is at the forefront of the debate, the primary question being whether a consumer product being returned by the retailer should be deemed a waste at the retail location or at the reverse logistics location. We believe it is and should remain the latter.
Our belief is that a truck filled with consumer products in their original, non-leaking containers does not create risk sufficient to tightly regulate returns as waste at the retail location. The containers are designed to survive the life cycle of the product and to survive the rigors of transportation. The products remain valuable to retailers for numerous business purposes (e.g., consolidation, creditability, data collection, etc.) and in many cases may be liquidated, donated or recycled.
Reverse logistics, through its economies of scale, creates an economic engine feeding the secondary market and creating sustainable solutions to the nation’s waste problem. A regulatory scheme that drives the point of generation to the reverse distributor is a waste reduction scheme; a scheme that identifies the point of generation to the retailer is a waste generation scheme. It is our responsibility as stakeholders to demonstrate this to the EPA. We hope you will join us in this effort.
Contact Richard Sieg with your comments or questions at Richard.Sieg@inmar.com. For more information, call today at (866) 440-6917 or email firstname.lastname@example.org.