18 DC VELOCITY FEBRUARY 2015 www.dcvelocity.com
newsworthy
It is one of those regulatory scenarios that companies pay
trade associations good money to identify, monitor, and,
if necessary, head off before it becomes another well-intentioned government rule that spawns unintended consequences.
In late 2013, the Food and Drug Administration (FDA)
proposed requirements for shippers, railroads, truckers,
and receivers involved in the movement of human and
animal food to, in the FDA’s words, “use sanitary transportation practices” to ensure the hazard-free movement
of goods. The FDA acted as part of its implementation of
the Sanitary Food Transportation Act of 2005 and the bet-ter-known FDA Food Safety Modernization Act signed into
law in 2011.
Perhaps reflecting its lack of familiarity with the shipping
world, the FDA stressed it had no plans to add regulations
to current sanitary food transportation practices. Its goal,
instead, is to ensure that the status quo doesn’t trigger
unnecessary risks to food safety. It also proposed a host of
exemptions: Any shipper, carrier, or receiver engaged in
food transport operations that has less than $500,000 in
total annual sales would be exempt. The rules would not
apply to the movement of “shelf-stable” foods (that is, food
that would normally be refrigerated but which can be stored
for a long time in a container at room or ambient temperature), live foods, animals, and raw agricultural commodities
when transported by farms. Nor would the rules cover
intermediaries that arrange for the transportation of the
commodities but never touch the freight. The agency reasoned that shippers and consignees should bear responsibility for any transport-related risks since they are intimately
familiar with the product and its shipping characteristics.
Still, that didn’t stop 150 interested parties from filing
comments during the first half of 2014. Most of the com-
ments supported the general thrust of the FDA’s proposal,
(TIA), the trade group representing many prop-
erty brokers, put it in a white paper last year:
“The best defense is a good offense.”
For example, TIA voiced concern about a sec-
tion in the rules asking stakeholders to suggest
“other” groups that should be subject to the
requirements. Concerns were also raised over
the provision exempting participants with less
than $500,000 in total annual sales. England
Logistics Inc., a Salt Lake City, Utah-based broker and
third-party logistics service provider that arranges a large
number of food shipments, said the language would effec-
tively nullify the purpose of the regulation because most
truck fleets are small operators with sales under the thresh-
old and would likely be exempted. In addition, concerned
food shippers could decide to work only with those carriers
that are required to be compliant, thus having the unin-
tended effect of forcing many smaller carriers out of the
market, England said.
The company also urged the FDA to only impose tem-perature-control requirements as they apply to food safety,
not the far more stringent practices that govern food quality
control. Commingling the two differing requirements in
a final rule would result in a “flood of unnecessary cargo
claims and mountains of wasted food,” England said.
BETTER DEFINITIONS URGED
For its part, the warehouse logistics association IWLA,
which represents warehouse-based third-party logistics service providers (3PLs), urged the FDA to be more specific on
who constitutes the “shipper” in a typical transaction covered by its proposal. The agency has crafted its definition
so broadly that it “could include a range of supply chain
intermediaries” that have little or no knowledge of the
food’s characteristics and that rely on the product’s owner
to provide the information, according to IWLA.
IWLA also had trouble with the FDA’s interpretation of a
shipper as a party who “initiates” the process of a food shipment. The group questioned whether a warehouseman who
removes three pallets of packaged frozen shrimp from the
warehouse and prepares it to be loaded on a truck arranged
by the product’s owner is, in fact, initiating the shipment.
Based on the broad range of comments, the FDA is now
expected to modify its initial proposal and publish a revised
version, according to a brokerage industry source.
“Food” for thought on sanitary shipping
The retail chain Target has signed a lease for a 900,000-square-
foot facility in Memphis, Tenn., which it plans to turn into a
regional online fulfillment center. … Southern Wine & Spirits of
America Inc. has opened a new warehouse in Union City, Calif.
Developed in partnership with W&H Systems and Westfalia
Technologies, the new facility houses four automated storage
and retrieval systems that refill pallets automatically. … LBA
Realty has purchased Sierra Commerce Park, a six-building mul-titenant warehouse in Reno, Nev., for $49 million, making it the
largest industrial sale in the city in the past 10 years.
ground breakers
