CCSB responds to Moore’s November Pricing column

The Commodity Classification Standards Board (CCSB) has received a number of inquiries from users of the National Motor Freight Classification (NMFC) regarding Peter Moore’s column in the November 2012 issue of Logistics Management (What’s the CCSB doing now?).

These inquiries relate to the suggestion by Mr. Moore that a recent action by the CCSB to reclassify pallets has resulted in a far-reaching change to the classification of palletized freight and to the information that shippers of palletized freight must show on bills of lading at time of shipment.

By way of background, the NMFC is a voluntary standard that provides a comparison of products moving by motor carrier in interstate, intrastate, and foreign commerce. Similar in concept to the groupings or grading systems that serve many other industries, products are classified according to their relative “transportability,” as determined by an evaluation of the following four transportation characteristics:

• Density;

• Stowability, which includes excessive weight or excessive length;

• Ease or difficulty of handling, which includes special care or attention necessary to handle the goods; and

• Liability, which includes value per pound, susceptibility to theft, liability to damage, perishability, propensity to damage other commodities with which transported and propensity to spontaneous combustion or explosion.

Importantly, the NMFC contains no rates or charges for transportation services, nor does it suggest rates or charges. Motor carriers establish their own pricing and are free to negotiate with their shipper customers in this regard.

As Mr. Moore himself acknowledges, carriers that participate in the NMFC are neither constrained nor compelled to use or abide by its provisions; carriers always have the free and unrestrained right of independent action and may deviate from any provision of the NMFC.

Subject 10 of CCSB Docket 2012-3 was a proposal to amend NMFC item 150390, which names “Pallets; Platforms; Racks, shipping, NOI; or Skids; for lift trucks, steel or wood,” by assigning classes based on density. Item 150390 applies on steel or wood pallets, shipping racks, etc., when shipped by themselves, i.e., when the commodities being shipped are steel or wood pallets, shipping racks, etc.

The CCSB’s approval of the proposal was based on an analysis of the transportation characteristics of these commodities. The analysis and all other information of record on which the CCSB’s decision was based is available for public review and inspection here. The change to item 150390 is published in Supplement 4 to NMF 100-AL, which became effective on December 1.

The CCSB’s action changed only the provisions of item 150390. It did not change the manner in which palletized freight is classified, or the NMFC rules governing palletized freight.

Mr. Moore has done the readers of Logistics Management a great disservice by misleading them into believing that shippers, when tendering goods on pallets, will now have to treat the pallets “as a commodity with full separate description on the Bill of Lading,” and that “many [shippers] will need to make a quick scramble to re-program their transportation management systems.”

Fact is that the only shippers potentially impacted by the CCSB’s approval of Subject 10 of Docket 2012-3 are those that ship empty—for lack of a better word—steel or wood pallets, shipping racks, etc., as named in item 150390. Again, the proposal amended only the classification provisions that apply when the commodities being shipped are steel or wood pallets, shipping racks, etc.

The CCSB has heard from a number of shippers and carriers who have read, or been told about, Mr. Moore’s column and have been left confused or dismayed by it. The common thread in the inquiries we’ve received is the misimpression, created by Mr. Moore, that there has been a change in the rules governing the classification of freight on pallets.

We are only too pleased to assist those who contact us in order to set the record straight. Indeed, we invite anyone who has questions in this regard to get in touch with the CCSB at 703-838-1810 or [email protected] so that we may clear up any misconceptions they might have.

In view of the role of Logistics Management as a transportation industry resource, it is hoped that the actual and accurate effect of the amendment to item 150390 be published in an upcoming issue to correct the erroneous and alarming interpretation provided to your readers by Mr. Moore.