Staff Contact: William F. Mascaro Telephone (703) Item Description Class

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1 Re: Water Heaters Staff Contact: William F. Mascaro Telephone (703) Proponent: Commodity Classification Standards Board Present Classification Provisions Item Description Class BOILERS, FURNACES, STOVES AND RELATED ARTICLES GROUP: subject to item 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 Sub 2 Other with insulated plastic tank and plastic outer shell NOTE Does not apply on solar collectors, solar water heaters or fireplace grate-type heaters. See item for applicable provisions for solar collectors or solar water heaters and item 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 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 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. Proposed Classification Provisions Item Description Class BOILERS, FURNACES, STOVES AND RELATED ARTICLES GROUP: subject to item Heaters, water, tank type, see Note, item 26521, in boxes or crates, see Note, item A-NEW, or Packages 208, 1016, 1277, 2055 or 2056: Sub 1 With plastic outer shell Sub 2 With metal outer shell NOTE Does not apply on solar collectors, solar water heaters, fireplace gratetype heaters or swimming pool heaters. See item for applicable provisions for solar collectors or solar water heaters, item for fireplace grate-type heaters, and item for swimming pool heaters National Motor Freight Traffic Association, Inc. Subject 2, Page 1 of 8

2 Proposed Classification Provisions Concluded Item Description Class BOILERS, FURNACES, STOVES AND RELATED ARTICLES GROUP: subject to item 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 1 inch clearance between the article and the inside wall of the box or crate. B-NEW Heaters, water, tank, see Note, item 26521, in boxes Cancel; no further application. Analysis Package 1208 This proposal is based on information developed through Research Project 1108 involving water heaters as named in item The project was initiated in response to indications of transportation characteristics inconsistent with CCSB guidelines for the currently applicable classes. Provisions for water heaters were adopted from the rail classification in The current description and classes for item 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, Since then, the only additional change has been to Note, item in Supplement 2 to NMF 100-AG directing Classification users to item for provisions applicable to solar collectors or solar water heaters and item for provisions applicable to fireplace grate-type heaters. That change became effective on April 28, As part of Research Project 1108, mailings were sent on April 15, 2010 and July 26, 2010 to 11 trade associations and 196 potential shippers of water heaters, 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 manufacture or ship water heaters, and six surveys were returned as undeliverable. In addition to the responding shippers, data was also developed through CCSB dock surveys and carrier-submitted information. The information of record encompasses two basic types of water heaters: tank-type and tank. 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 non-corrosive metal, with a metal outer shell. Some models also utilize fiberglass or plastic as the tank material. As the heated water supply is depleted, the tank heats additional water 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. Subject 2, Page 2 of National Motor Freight Traffic Association, Inc.

3 % of Figures in Interval CCSB DOCKET A tank water heater does not utilize a storage tank and instead heats water on demand. The information available indicates that tank water heaters primarily use natural gas to heat the water. Examples of both types are shown below. Tank-Type Tank-Type Tank Tank Transportation Characteristics Density: Overall, water heaters have been found to range in density from 0.80 to pcf, with a simple average density of 8.07 pcf, based on 316 density observations. A frequency distribution of the overall density range is shown below. Frequency Distribution Less 1 1 but 2 2 but but but but but but but but or greater Density Intervals (pcf) When tank-type water heaters are evaluated on the basis of the tank material, water heaters that have a metal outer shell range in density from 0.80 to pcf, with an average of 8.09 pcf, while water heaters that have a plastic outer shell range from 2.16 to 7.71 pcf, with an average density of 4.87 pcf. It is noted that while the density ranges overlap, the average density of the metal units is significantly higher that of the plastic units National Motor Freight Traffic Association, Inc. Subject 2, Page 3 of 8

4 When evaluated on the basis of the type of heater, tank-type water heaters range in density from 0.80 to pcf, with an average of 7.98 pcf. Tank water heaters range in density from 7.30 to pcf, with an average density of pcf. Again, while the density ranges for the two types overlap, the average density of the tank water heaters is appreciably higher the average density of the tank-type. Handling: Information of record indicates that tank-type water heaters are generally tendered in crates or in fiberboard containers that may, but often are not, unitized on a pallet. In some instances, used or damaged water heaters have also been found to be tendered on pallets with little or no protective packaging. When tendered in a crate equipped with openings for forklift access, or in boxes unitized on a pallet, tank-type water heaters may be handled in a manner similar to other like-packaged freight, although many of the packages are labeled with precautionary handling instructions. These include instructions to handle with care to prevent damage, truck and/or tie down from this side only and this side up. Such extra care and attention is above and beyond that required for most general commodities. Examples of tank-type water heaters in crates or in fiberboard containers on a pallet are shown in the photos below. Subject 2, Page 4 of National Motor Freight Traffic Association, Inc.

5 Tank-type water heaters when tendered in a manner other unitized on a pallet will generally require handling via a hand truck instead of a forklift. If handled with a forklift, extreme care and attention will be required to prevent damage. Moving tank-type water heaters in normal cross-dock operations with a hand truck will require extra time or personnel to expeditiously handle the shipment. Photos of tank-type water heaters not on pallets are shown below. Tank water heaters are tendered in boxes that are usually palletized for shipment, and no unusual handling considerations have been identified. An example of a shipment of tank water heaters is shown on the right. Stowability: Tank 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 stowing considerations. Due to their size, tank-type water heaters will generally require floor loading. The carrier s ability to load freight on top of the heaters will be impacted by the quantity and size(s) of heaters in a given shipment. When of a uniform size, a flat load-bearing surface for other compatible freight is available. When in mixed sizes, a flat load-bearing surface for other 2011 National Motor Freight Traffic Association, Inc. Subject 2, Page 5 of 8

6 freight may not be available, making it more difficult to structure a load. Additionally, certain packages are labeled with instructions for the carrier to tie the heater to the side of the trailer in a particular orientation. This will also limit the carrier s ability to structure a load. Photos of tank-type water heaters stowed in a trailer 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 with a metal outer shell are susceptible to damage, especially denting of the outer shell. Information submitted by carriers reveals claims ratios for these tank-type water heaters ranging from 1.73% to almost 30%. By comparison, a claims ratio of 1% or is considered typical for general commodities. This susceptibility to damage is reinforced by the fact that 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 Subject 2, Page 6 of National Motor Freight Traffic Association, Inc.

7 four directions and to use upright pallets as dunnage to protect the tank from punctures. This is not the norm for most general commodities. Damaged or defective water heaters have also been found to be moving banded to a 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 tank-type water heaters with a plastic outer shell or on tank 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. Per CCSB policy, this is predicated on the commodity exhibiting no unusual or significant handling, stowability or liability considerations. Information of record reveals that tank-type water heaters with a plastic outer shell range in density from 2.16 to 7.71 pcf, with a simple average density of 4.87 pcf. Tank-type water heaters equipped with a metal outer shell range in density from 0.80 to pcf, with an average of 8.09 pcf. Under CCSB density guidelines, an average density of 4.87 pcf is generally associated with a class 200, which calls for a minimum average density of 4 pcf. An average density of 8.09 pcf is generally associated with a class 110, which calls for a minimum average density of 8 pcf. However, the information of record also indicates significant negative handling and stowability considerations associated with tank-type water heaters, and those having a metal outer shell exhibit significant liability (i.e. damage) issues, as well. CCSB policy provides that the CCSB may deviate from the density guidelines when these additional considerations are evident. Classification precedent has been to assign a class one or two classes higher what would generally be called for under the density guidelines to commodities that exhibit --favorable handling, stowing or liability characteristics. Accordingly, this proposal would assign a class 250 one class higher the normally associated class 200 for the identified average density of 4.87 pcf to tank-type water heaters with a plastic outer shell, and a class 150 two classes higher the class 110 generally associated with the identified average density of 8.09 pcf to tank-type water heaters with a metal outer shell. The one-class increase for tank-type water heaters equipped with plastic outer shell reflects the negative handling and stowability considerations identified on this record. The two-class increase for tank-type water heaters with a metal outer shell reflects not only the identified negative handling and stowability considerations, but also the additional liability considerations, including claims ratios ranging from 1.73% to almost 30%. A claims ratio of 1% or is considered typical for general commodities. Item would be further amended to allow for shipment of tank-type water heaters in crates, to reflect the manner in which some of these products are tendered for shipment. A new Note would also be established, based on Package 1208, to provide that Tank-type 2011 National Motor Freight Traffic Association, Inc. Subject 2, Page 7 of 8

8 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 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 would be amended to exclude swimming pool heaters from item and direct Classification users to the provisions of item , Machinery or Machines, NOI. This proposal would also establish a new item for tank water heaters at class Tank water heaters have been found to exhibit transportation characteristics that are substantially different from tank-type water heaters. Tank water heaters range in density from 7.30 to pcf, with a simple average density of pcf, and no unusual or significant handling, stowability or liability considerations. CCSB guidelines for the proposed class 92.5 call for a minimum average density of 10.5 pcf. Based on the information of record, this proposal, as docketed, is in keeping with CCSB policy and precedent. Subject 2, Page 8 of National Motor Freight Traffic Association, Inc.