Re: Water Heaters Staff Contact: William F. Mascaro Telephone (703) 838-1834 mascaro@nmfta.org Proponent: Commodity Classification Standards Board Present Classification Provisions Item Description Class BOILERS, FURNACES, STOVES AND RELATED ARTICLES GROUP: subject to item 25400 26520 Heaters, water, NOI, see Note, item 26521, in boxes or Packages 208, 1016, 1208, 1277, 2055 or 2056: Sub 1 With insulated plastic tank and plastic outer shell... 175 Sub 2 Other than with insulated plastic tank and plastic outer shell... 85 26521 NOTE Does not apply on solar collectors, solar water heaters or fireplace grate-type heaters. See item 177010 for applicable provisions for solar collectors or solar water heaters and item 69457 for fireplace grate-type heaters. Package 1208 (a) Except as provided in paragraph (b), water heaters, NOI, must be shipped in boxes or crates, and those having insulated and jacketed boilers or tanks must be supported or suspended in the boxes or crates and must be so protected that there will be no shifting and not less than 1 inch clearance between the side of the heater jacket and the inside wall of the box or crate. (b) Water heaters, NOI, of the coal or wood burning type, or water heaters, NOI, not porcelain enameled nor jacketed, other than storage type, may be shipped loose. Shipments of water heaters, of any kind, used, having value for scrap metal content or for salvage of parts may be shipped loose. 2012 National Motor Freight Traffic Association, Inc. Subject 1, Page 1 of 9
Proposed Classification Provisions Item Description Class BOILERS, FURNACES, STOVES AND RELATED ARTICLES GROUP: subject to item 25400 26520 Heaters, water, tank type, see Notes, items 26521 and A-NEW: Sub 1 In boxes or Packages 208, 1016, 1277, 2055 or 2056, other than secured Sub 2 on lift truck skids or pallets... 125 In boxes or Packages 208, 1016, 1277, 2055 or 2056, secured on lift truck skids or pallets; or in crates... 100 26521 NOTE Does not apply on solar collectors, solar water heaters, fireplace gratetype heaters or swimming pool heaters. See item 177010 for applicable provisions for solar collectors or solar water heaters, item 69457 for fireplace grate-type heaters, and item 133300 for swimming pool heaters. A-NEW NOTE Tank-type water heaters tendered in boxes or crates must be supported or suspended in the box or crate and be protected so that there will be no shifting and not less than 1 inch clearance between the article and the inside wall of the box or crate. B-NEW Heaters, water, tankless, see Note, item 26521, in boxes... 77.5 Cancel; no further application. Package 1208 Analysis Research Project 1108 This proposal is based on information developed through Research Project 1108 involving water heaters as named in item 26520. The project was initiated in response to indications of transportation characteristics inconsistent with CCSB guidelines for the currently applicable classes. As part of Research Project 1108, mailings were sent to 11 trade associations and 196 potential shippers of water heaters on April 15, 2010, and for those that did not respond, again on July 26, 2010, inviting them to participate in our survey. From these mailings, four shippers responded with at least some information on their products, 32 responded that they did not ship water heaters, and six surveys were returned as undeliverable. Upon completion of the project a proposal was noticed on CCSB Docket 2011-2 (May 2011), designated as Subject 2, which sought, in part, to amend the provisions of item 26520 to provide for tank-type water heaters, with subprovisions for With plastic outer shell, at a class 250, and With metal outer shell, at a class 150. A new item was also proposed for tankless water heaters, at a class 92.5. At the public CCSB meeting on May 3, 2011, several interested shippers appeared and spoke in opposition to the proposal, stating that the data of record Subject 1, Page 2 of 9 2012 National Motor Freight Traffic Association, Inc.
was not reflective of their products, and indicating a willingness to work with the CCSB to develop more-reflective data. In view of this, the CCSB voted to withdraw Subject 2 of Docket 2011-2 and continue its research on water heaters. Subsequently, the CCSB reached out to those shippers who attended the public meeting and inquired about their willingness to allow the CCSB to visit their facilities and observe shipments of water heaters firsthand. All of the shippers contacted responded affirmatively, and CCSB representatives visited their facilities in June and July of 2011. The CCSB also contacted those shippers that submitted statements to the docket record but did not attend the CCSB meeting, and invited them to participate in the research. Additional information was received from at least one of those shippers. Two additional shippers who were not party to the original proposal also reached out to the CCSB and offered to participate in the research. CCSB representatives visited one of those shippers, and both provided information to the record. History of Provisions Provisions for water heaters were adopted from the rail classification in 1936. The current description and classes for item 26520 were established as a result of action taken on Docket 934, Subject 10 (June 1993) and first appeared in Supplement 3 to NMF 100-T, effective August 14, 1993. Since then, the only additional change has been to Note, item 26521 in Supplement 2 to NMF 100-AG directing Classification users to item 177010 for provisions applicable to solar collectors or solar water heaters and item 69457 for provisions applicable to fireplace grate-type heaters. That change became effective on April 28, 2007. About Water Heaters The information of record encompasses two basic types of water heaters: tank-type and tankless. A tank-type water heater consists of an insulated storage tank and stores the heated water until it is needed. The tank may be lined with glass or some other type of noncorrosive material, with a metal outer shell. Some models also utilize fiberglass or plastic as the tank material, however, the overwhelming majority of the tank-type water heaters of record utilize a metal outer shell. As the heated water supply is depleted, it is replaced with cold water which is heated and stored in the tank to replenish the supply. This type of water heater typically uses natural gas, propane, electricity or oil to heat the water. The information of record encompasses tank sizes ranging from 2.5 to 400 gallons and includes both residential and commercial units. A tankless water heater does not utilize a storage tank and instead heats water on demand. The information available indicates that tankless water heaters primarily use natural gas to heat the water. Examples of both types are shown on the following page. 2012 National Motor Freight Traffic Association, Inc. Subject 1, Page 3 of 9
% of Figures in Interval CCSB DOCKET 2012-2 Tank-Type Tank-Type Tankless Tankless Transportation Characteristics Density As a result of the additional shipper data, and further CCSB research, the information of record now encompasses 47,504 density observations, which is a substantial increase over the 316 observations from Docket 2011-2, Subject 2. The record includes information from interested shippers, as well as carriers, CCSB dock surveys, and the CCSB s Density Study 1. The densities range from 0.80 to 73.88 pcf, with a simple average density of 9.32 pcf. A frequency distribution of the overall density range is shown below. Overall 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 36.18% 28.98% 22.32% 7.45% 0.00% 0.02% 0.57% 2.27% 1.61% 0.36% 0.24% Density Intervals (pcf) 1 The Density Study is part of an ongoing effort by the CCSB to collect information on actual shipments; it is not tied to any particular research project, nor does it target any particular product category. Carriers that choose to participate in the study periodically submit shipment data captured through their respective freight auditing programs. The data is identified by NMFC item, and only verifiable data points, which include the weight and the dimensions and/or cube of the shipping unit involved, are used. Subject 1, Page 4 of 9 2012 National Motor Freight Traffic Association, Inc.
% of Figures in Interval % of Figures in Interval CCSB DOCKET 2012-2 When evaluated on the basis of the type of heater, where known, tank-type water heaters range in density from 0.80 to 73.88 pcf, with an average of 9.00 pcf, based on over 40,500 observations, while tankless water heaters range in density from 4.54 to 15.70 pcf, with an average density of 13.74 pcf, based on over 800 observations. Frequency distributions of these two types are shown below. Tank-Type 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 39.20% 31.05% 23.39% 5.15% 0.00% 0.01% 0.07% 0.97% 0.12% 0.02% 0.00% Density Intervals (pcf) Tankless 100.00% 80.00% 60.00% 82.10% 40.00% 20.00% 0.00% 0.00% 0.00% 0.00% 0.12% 0.25% 0.25% 17.04% 0.25% 0.00% 0.00% Density Intervals (pcf) 2012 National Motor Freight Traffic Association, Inc. Subject 1, Page 5 of 9
Handling Tankless water heaters are tendered in boxes of a regular size and shape that are usually palletized for shipment. Freight tendered in this manner will generally not present any unusual or significant handling considerations. Tank-type water heaters are generally tendered for shipment in one of two different types of packaging. Smaller residential and commercial water heaters are usually tendered in fiberboard boxes that may or may not be secured on a lift truck skid or pallet. Larger residential and commercial or industrial water heaters are tendered in crates that provide for forklift access. With respect to those water heaters packaged in boxes, the degree of protection afforded by these containers varies, with some manufacturers using triplewall corrugated fiberboard for the container while others use doublewall corrugated fiberboard. Also, some manufacturers further reinforce the box with exterior corner posts and plastic film. Whether in a box or a crate, the packages are usually marked with some type of handling instruction(s), e.g. This Side Up. Based on discussions with the involved shippers and through firsthand visits to several of their facilities, a significant percentage of tank-type water heaters in boxes are tendered for shipment on lift truck skids or pallets. When tendered on a lift truck skid or pallet, tank-type water heaters in boxes will exhibit handling characteristics similar to those of other likepackaged freight. They are readily handled with mechanical equipment, and many of the potential or identified handling difficulties are mitigated. Likewise, tank-type water heaters tendered in crates are also readily handled with mechanical equipment and would not present any significant or unusual handling considerations. Boxed tank-type water heaters not secured on a lift truck skid or pallet will generally require handling via a hand truck instead of a forklift. If handled with a forklift, extra care and attention will be required to prevent damage as there are no access points for the fork tines. Moving tank-type water heaters in normal cross-dock operations with a hand truck will require extra time or personnel to handle the shipment. In addition to being more time consuming, handling tank-type water heaters by hand in cross-dock operations also increases the potential for damage due to their size and weight, as well as the height of the box. Stowability As discussed under handling, tankless water heaters are tendered in boxes of a regular size and shape that are usually palletized for shipment. Freight tendered in this manner will generally not present any unusual or significant stowability considerations. Tank-type water heaters will usually be floor-loaded and must be stowed in a vertical or upright position to prevent damage. When tendered in crates or secured to a lift truck skid or pallet, no unusual or significant stowing considerations are indicated. The water heater will be maintained in its proper orientation, and many of the identified stowing concerns, if any, will be alleviated. This configuration will also generally provide a regular load-bearing surface for other freight. When tendered in boxes not secured on lift truck skids or pallets, negative stowing considerations have been identified. As with handling, stowing individual water heaters that are not secured to a lift truck skid or pallet in the vehicle will involve increased time and personnel to build the load. Depending upon how the water heaters are positioned in the vehicle, a flat load-bearing surface may not be available for other freight. Additionally, based Subject 1, Page 6 of 9 2012 National Motor Freight Traffic Association, Inc.
upon the height of the heater in relation to its width, water heaters that are not secured on lift truck skids or pallets may also need to be blocked or braced in the vehicle to prevent them from tipping. Photos of tank-type water heaters in boxes not secured on lift truck skids or pallets, and those that are secured on lift truck skids or pallets or are in crates are shown in the pictures below. Liability Water heaters are not perishable, susceptible to theft or spontaneous combustion or explosion, nor are they likely to damage other freight with which transported. A limited amount of information available on the value of water heaters indicates a range from $0.90 to $12.04 per pound, with a simple average value of $2.40 per pound. While the overall average value of water heaters is fairly low, information of record indicates that tank-type water heaters may be susceptible to damage. While acknowledging that their products are not claims-free, interested shippers took exception to the information provided in Subject 2 of Docket 2011-2, which cited carriersubmitted claims ratios for tank-type water heaters ranging from 1.73% to almost 30%. In contrast, shipper data indicates claims ratios from 2.4% to 3.11%. Regardless, a claims ratio of 1% or less is considered typical for general commodities. While claims ratios for water heaters are higher than most general commodities, through visits with interested shippers, the CCSB was advised that where problems are identified, shippers have taken steps to improve their packaging to reduce the frequency of claims. These steps include placing the water heaters on lift truck skids or pallets to facilitate handling and stowing, as well as improvements to the 2012 National Motor Freight Traffic Association, Inc. Subject 1, Page 7 of 9
packaging through the use of heavier fiberboard or additional corner supports and plastic film. In spite of these steps, at least one carrier has released an advisory to their freight handlers on the proper techniques for handling water heaters. These include the need to use hand trucks or dollies and not forklifts when handling water heaters. Additional instructions include the need to use caution when stacking and to keep the tanks upright and not lay them on their sides. When loading, freight handlers are instructed to block and brace the tank in all four directions and to use upright pallets as dunnage to protect the tank from punctures. While this is not the norm for most general commodities, supporting information indicates that the involved water heaters are not tendered secured to lift truck skids or pallets, or in crates. Damaged or defective water heaters have also been found to be moving banded to a lift truck skid or pallet, with no additional packaging provided, as shown in the photo on the right. When tendered in this manner, these water heaters are even more susceptible to damage. No information is available on claims regarding tankless water heaters. Relationship to CCSB Policies and Guidelines CCSB policy calls for provisions to reflect a commodity s known transportation characteristics. Currently, water heaters are assigned a class 175 when equipped with an insulated plastic tank and plastic outer shell, and a class 85 when not so equipped. CCSB guidelines for class 175 call for a minimum average density of 5 pcf, while class 85 calls for a minimum average density of 12 pcf. An analysis of the information of record, based on the current provisions, reveals that tank-type water heaters with a plastic outer shell range in density from 1.57 to 22.22 pcf, with a simple average density of 7.34 pcf. Tank-type water heaters equipped with a metal outer shell range in density from 0.80 to 73.88 pcf, with an average of 9.32 pcf. Under CCSB density guidelines, an average density of 7.34 pcf is generally associated with a class 125, which calls for a minimum average density of 7 pcf. An average density of 9.32 pcf is generally associated with a class 100, which calls for a minimum average density of 9 pcf. It is noted that not only are the current provisions not consistent with CCSB guidelines for the applicable classes, but plastic tank water heaters account for less than 0.50% of the more than 40,500 density observations of record for tank-type water heaters. Water heaters tendered in boxes not secured on lift truck skids or pallets have been found to exhibit less favorable handling, stowability and liability characteristics than water heaters tendered in boxes secured on lift truck skids or pallets, or in crates. CCSB policy provides that the CCSB may deviate from the density guidelines when these additional considerations are evident. Accordingly, this proposal would eliminate the current distinction based on the tank material and assign instead classes predicated on the manner in which the water heater is Subject 1, Page 8 of 9 2012 National Motor Freight Traffic Association, Inc.
packaged and tendered to the carrier for shipment. Water heaters in boxes or one of the listed numbered box-type packages tendered secured on lift truck skids or pallets, or water heaters in crates, would be assigned a class 100, reflective of the average density of 9.00 pcf for tank-type water heaters and handling, stowability and liability characteristics comparable to those of other like-packaged freight. Water heaters that are tendered in boxes or one of the listed numbered packages other than secured on lift truck skids or pallets would be assigned a class 125. The two-class increase reflects not only the identified handling and stowability considerations, but also the additional liability considerations arising when tanktype water heaters in boxes are tendered for shipment other than secured on a lift truck skid or pallet. A new Note would also be established, based on Package 1208, to provide that Tanktype water heaters tendered in boxes or crates must be supported or suspended in the box or crate and be protected so that there will be no shifting and not less than 1 inch clearance between the article and the inside wall of the box or crate. Concurrently, Package 1208 would be cancelled with no further application. Note, item 26521 would be amended to exclude swimming pool heaters from item 26520 and direct Classification users to the provisions of item 133300, Machinery or Machines, NOI. This proposal would also establish a new item for tankless water heaters, at class 77.5. Tankless water heaters have been found to exhibit transportation characteristics that are substantially different from tank-type water heaters. Tankless water heaters range in density from 4.54 to 15.70 pcf, with a simple average density of 13.74 pcf, with no unusual or significant handling, stowability or liability considerations. CCSB guidelines for the proposed class 77.5 call for a minimum average density of 13.5 pcf. Based on the information of record, this proposal, as docketed, is in keeping with CCSB policy and guidelines. 2012 National Motor Freight Traffic Association, Inc. Subject 1, Page 9 of 9