CCSB 2013-1

Reclassification of Televisions

Current Item 63321

Proposed Change to Density Base

Sub Screen

Size

Class

1 >40” 200

2 <40” 125

Sub PCF Class

2 <4 400

3 4<8 175

4 8> 110

Sub PCF Class

6 <4 300

7 4<8 150

8 8> 100

In display or shelf ready packaging

with BOL notations and PKG

labeling with intent to file a claim.

In display or shelf ready packaging

without shipper intent file a claim.

CCSB 2013-1

Reclassification - Issues • Screen size under 40” - classification can increase depending upon density to class

150 - 175. It can also decrease based upon the density.

• While classification can decrease this docket also presents an increase in class to shelf ready packaging with filing damage claims. This can alarm the consumer and impact sales to Manufacture's and retailers.

• Shelf ready display packaging should not be considered into this classification change and for over 30 years TV’s have been shipped in this manner without cause.

• Carton damage is not significant and carriers need to be accountable for their actions.

• Changes in the four key areas of classification (Handling, Stowability, Density and value) has changed to improve handling & stowability, density improvements and significant value reduction in the last 10 years. These characteristics continue to improve and the current classification item of 63321 needs to be reduced downward to reflect these positive changes.

42 inch LCD

48x40x90 (100 cube/pallet)

21 units/pallet

46.3 pounds/unit

973 pound/pallet

PCF = 9.73

50 inch Plasma

55x45x101 (144 cube/pallet)

15 units/pallet

72.8 pounds/unit

1092 pounds/pallet

PCF = 7.58

Handling & Stowability

IMPROVEMENTS

• Increased Density

6.08 PCF

•Use of pallets for

ease of handling.

•Oversize Pallets

based on TV screen

size to prevent

overhang and

improve stack

heights.

• Use of stretch

wrap, banding and

corner boards to

strengthen pallet

stack stability.

55 inch LCD TV

64x48x72 (128 cube/pallet)

14 units/pallet

79.4 pounds/pallet

1112 pounds/pallet

PCF = 8.69

60 inch LCD TV

64x44x77 (125.4 cube/pallet)

12 units/pallet

86 pounds/pallet

1032 pounds/pallet

PCF = 8.23

IMPROVEMENTS

• Density increase as

reported of 6.08 PCF.

• Use of pallets for

ease of handling.

• Oversize Pallets

based on TV screen

size to prevent

overhang and improve

stack heights.

• Use of stretch wrap,

banding and corner

boards to strengthen

pallet stack stability.

Handling & Stowability

CCSB 2013-1

Television - Summary • SUMMARY

• Improved Handling & Stowability – oversize pallets, Stack heights and use stretch wrap.

• Improved Density or increased PCF as reported.

• Product Values reduced by up to 80% of when originally Classified.

• Screen sizes < 40” - Favorable handling, Stowability, Density (2005 study 7.9 PCF) and value.

• All of the above suggest classification reductions are necessary and notes to display packaged not justified.

CCSB 2013-1

Television - Recommendation

Option 1

• Amend item 63321 as follows:

• Screen sizes < 40” classify as 100.

• Screen sizes > 40” but less than 80” classify as class 150.

• Screen sizes 80” and > classify as 200.

Option 2

• Review and receive further comments from the industry.

• This change can provoke other similar class changes to shelf ready packaged products, unfairly increasing the costs to the Consumer Electronic Industry.

CCSB

Notice of Proposed Amendments to the NMFC

Reclassification of Televisions (TVs)

January 29, 2013

Key Points

8

• Call for Notations on Product and Bills of Lading • Handling and Stowability • Shelf ready packaging

• Density

Additional Marking / Notations Requirement

9

Item 63321 – Note Requires that Bills of Ladings and shipping packages be marked to indicate that any damage to packaging will result in a claim. For SEL the cost for these requirements would be cost prohibitive. In a global environment these product packaging changes would be a US only requirement. In addition the IS costs to add logic for TV models only to the BOL in multiple WMS platforms would also be costly. Notice...from a practicality standpoint – The shippers BOL goes no farther than the LTL carriers origin terminal. What is the reason for the notice of potential claim filing on the box? Will the carriers’ dockman be aware of this new notice and adjust their handling accordingly?

Handling and Stowability

10

• All SEL TV product is corner-boarded,

shrink wrapped and palletized. Including costlier custom size pallets for larger screen sizes. • SEL launched freight claims

reduction initiatives back in 2010, and as a result have increased our packaging costs dramatically.

• All product handling requirements are called out in our transportation agreements with our carriers.

• LTL carriers now have decking widely available • Stowability issues are mitigated

by this equipment

Claims History for TV Product shipped LTL

11

2012 claims ratio for TV’s shipped via LTL is 0.19%

Shelf Ready Packaging

12

• Big box retailers reject all carton damaged product, and issue chargebacks –

i.e. don’t pay for them, and in most cases don’t return them.

• It is common in todays retail environment to sell carton damaged freight (of all product) at a discount if that channel exists.

Two examples:

Transportation Characteristics

Density Distribution

13

SEL TV density distribution differs greatly from data presented in CCSB docket Product density of our 157 TV models measured reflects: - Average density of 8.81(pcf) vs 5.96 - 69% average 9.87 (pcf) vs 26% – density of 8 <10 is equal to class 100

Density Group (pcf) Density Range (pcf) Average Density (pcf) Percentages of Figures

Less than 4 0.67 - 3.97 2.57 32%

4 but less than 8 4.02 - 7.99 6.08 42%

8 or greater 8.02 - 28.86 9.80 26%

CCSB

Density Group (pcf) Density Range (pcf) Average Density (pcf) Percentages of Figures

Less than 4 3.46 - 3.61 3.56 2%

4 but less than 8 4.09 - 7.99 6.57 29%

8 or greater 8.02 - 14.75 9.87 69%

SEL

29

%

69

%

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