Interpretation Response #06-0095 ([Ultimate Contract Services, Inc.] [Mr. Thomas Radwick])

Below is the interpretation response detail and a list of regulations sections applicable to this response.

Interpretation Response Details

Response Publish Date: 05/05/2006

Company Name: Ultimate Contract Services, Inc.

Individual Name: Mr. Thomas Radwick

Location State: OH Country: US

View the Interpretation Document

Response text:

May 5, 2006

Mr. Thomas Radwick                 Reference No. 06-0095
President
Ultimate Contract Services, Inc.
8380 Flick Road
Tipp City, Ohio 45371

Dear Mr. Radwick:

This responds to your April 19, 2006 letter requesting clarification of the term “offeror” for purposes of the Hazardous Materials Regulations (HMR; 49 CFR parts 171-180). Specifically, you ask whether the term includes brokers, freight forwarders, and agents and whether brokers, freight forwarders, and agents are required to register with DOT in accordance with 49 CFR Part 107, Subpart G.

As provided in § 171.8 of the HMR, an “offeror” is any person who: (1) performs, or is responsible for performing, any pre-transportation function required under the HMR for transportation of a hazardous material in commerce; or (2) tenders or makes the hazardous material available to a carrier for transportation in commerce. Pre-transportation functions are functions specified in the HMR that are required to assure the safe transportation of a hazardous material in commerce, including, but not limited to: (1) determining the hazard class of a material; (2) selecting a packaging; (3) filling a packaging; (4) securing the closures on a filled or partially filled packaging; (5) marking and labeling a package; (6) preparing a shipping paper; (7) providing and maintaining emergency response information; and (8) certifying that a hazardous material is in proper condition for transportation in conformance with HMR requirements. If a broker, freight forwarder, or agent performs one or more pre-transportation functions to prepare a hazardous materials shipment for transportation in commerce, then the broker, freight forwarder, or agent is an offeror under the HMR and is subject to all applicable regulatory requirements. A third party logistics company or broker who contracts with a carrier to transport a shipment on behalf of the original shipper is not considered an offeror for purposes of the HMR unless it also performs one or more pre-transportation functions to prepare the shipment for transportation in commerce.

The registration requirements in 49 CFR Part 107, Subpart G apply to persons who offer and persons who transport certain hazardous materials in commerce. A broker, freight forwarder, or agent who performs one or more pre-transportation functions for the types of hazardous materials shipments specified in 49 CFR 107.601 must register with PHMSA and pay a registration fee. Note that under the registration system as currently structured, possession of a valid registration certificate is not an endorsement of regulatory compliance or of a carrier’s safety fitness nor does it indicate that the certificate holder complies with applicable security requirements.

There is no general requirement for a hazardous materials carrier to obtain a “Federal Hazardous Materials License” in order to transport hazardous materials in commerce; however, Federal Motor Carrier Safety Administration regulations (49 CFR Part 385, Subpart E) require motor carriers transporting certain types and amounts of hazardous materials to apply for a safety permit. To obtain a safety permit, a carrier must have a “satisfactory” safety rating and must meet certain other safety and security requirements. The safety permit requirements apply to motor carriers transporting: (1) a highway route- controlled quantity of a Class 7 (radioactive) material; (2) certain high explosives; (3) certain TIH materials; and (4) certain bulk shipments of liquefied methane gas and liquefied natural gas. A carrier may not transport any of the listed materials unless it has a valid safety permit.

According to your letter, you are concerned that brokers, freight forwarders, and agents do not comply with applicable security regulations. In accordance with Subpart I of Part 172 of the HMR, persons who offer for transportation or transport certain hazardous materials in commerce must develop and implement security plans addressing personnel, unauthorized access, and en route security. The types and quantities of hazardous materials for which a security plan is required are listed in § 172.800(b) of the HMR. If a broker, freight forwarder, or agent meets the definition of an “offeror or person who offers” in § 171.8 for one or more of the hazardous materials listed in § 172.800(b), then the broker, freight forwarder, or agent must develop and implement a security plan covering the security risks associated with the functions he or she performs. Moreover, foreign-based entities must comply with all applicable HMR requirements when operating in the United States. Thus, foreign-based persons who offer for transportation or transport hazardous materials into or within the United States in the types and quantities listed in § 172.800(b) must develop and implement security plans for those hazardous materials.

I hope this information is helpful. Please contact this office if you further questions or need additional information.

Sincerely,

Susan Gorsky
Regulations Officer
Office of Hazardous Materials Standards

171.8

Regulation Sections