PHMSA Response Letter

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October 8, 2009

Mr. Jon Bjornstad
President
C & N Companies
8011 34th Ave., S Suite 147
Bloomington, MN 55425

Ref. No. 09-0064

Dear Mr. Bjornstad:

This is in response to your request for clarification of the Hazardous Materials Regulations (HMR; 49 CFR Parts 171-180) regarding an offeror’s responsibility for preparing hazardous materials for transportation.

According to your letter, your company contracts with ethanol manufacturers to manage the sale of the ethanol for the manufacturer. The contracts specify that the manufacturer will “supervise the loading and delivery of Ethanol, prepare delivery documentation and generally be responsible for all matters ancillary to such activities.” The rail tank cars are loaded by the manufacturer, closed by the manufacturer, and sealed by the manufacturer. The manufacturer provides C&N
with information stating the amount of ethanol loaded into the tank car and provides a loading checklist signed by the loader, indicating that the car has been inspected and conforms to § 173.31(d)(1) of the HMR. Your questions are paraphrased and answered below.

Q1. Is C&N Companies (C&N) considered the agent of the manufacturer (or previous offeror) under § 172.204(d)(1) and if so, may C&N list the manufacturer as the shipper and sign the shipper’s certification?

A1. For purposes of the HMR, an “offeror” is any person who performs or is responsible for performing a pre-transportation function required under the HMR for transportation of a hazardous material in commerce or who tenders or makes the hazardous material available to a carrier for transportation in commerce (see § 171.8). There may be more than one offeror for a shipment of hazardous materials. Under the scenario described in your letter, C&N and the ethanol manufacturer are both offerors of the ethanol shipment and are responsible for the specific pre-transportation functions each performs (see § 171.1(b) for the definition of “pre-transportation function”). C&N, acting as the agent of the manufacturer, is considered an offeror and may sign the certification statement on the shipping paper. In so doing, C&N takes responsibility for performing that function. In order to properly certify a shipment, the person signing the certification must have direct knowledge that the materials are in proper condition for transportation and are properly classified, described, packaged, marked and labeled in accordance with the HMR and applicable international regulations.
Q2. May C&N rely on information provided by the manufacturer (or previous offeror) and in good faith rely on that information when signing the certification statement and does “direct knowledge” include information passed on from the manufacturer?

A2. Yes. An offeror may rely on information provided by another offeror and consider it direct knowledge, unless that offeror knows or a reasonable person acting in the circumstances and exercising reasonable care would know, that the information provided is incorrect.

Q3. Is this a situation whereby each offeror is responsible for only those functions performed?

A3. Yes. Each offeror is responsible only for the specific pre-transportation or transportation functions that it performs or is required to perform. Also see A1 and A2.

Q4. How would regulatory compliance be determined when a tank car is in violation of § 173.31(d)(1)(iv) with respect to ensuring that all closures and fastenings are properly tightened?

A4. The determination of compliance is based on various factors, such as signs of leakage around the closures of fastenings or individually testing the closures and fasteners. The determination would also consider applicable instructions from the manufacturer and may also include information obtained from the hazardous materials employee(s) who actually tightened the closures and fastenings. Generally, such determinations are made on a case-by-case basis and are dependent on the facts of the specific situation.

I hope this information is helpful. Please contact this office should you have additional questions.

Sincerely,

Hattie L. Mitchell
Chief, Regulatory Review and Reinvention
Office of Hazardous Materials Standards

171.8, 171.1(b), 173.31,