Japan Machinery Center for Trade and Investment
Japan Machinery Center for Trade and Investment

No.401 Kikai Shinko Building

Tel :81-3-3431-9507

5-8,

Fax:81-3-3436-6455

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3-chome,Minato-ku, Tokyo

105-0011

Japan

March 12, 2010
Pipeline and Hazardous Material Safety Administration (“PHMSA”)
U.S. Department of Transportation

Re:Docket Number PHMSA-2009-0095(HM-224F)
RIN 2137-AE44
Comment on Notice of Proposed rulemaking, Federal Register Vol. 75, No. 6,
January 11, 2010.
Hazardous Materials: Transportation of Lithium Batteries

The Japan Machinery Center for Trade and Investment (“JMC”) hereby submits commentson the Notice of Proposed rulemaking issued by the Pipeline and Hazardous Material Safety
Administration, U.S. Department of Transportation, Federal Register Vol. 75, No. 6, January
11, 2010, “Hazardous Materials: Transportation of Lithium Batteries”
JMC is an association of 270 firms that manufacture and export machinery products
worldwide. It includes most of the major companies in Japan that export electronics andmachinery goods to the U.S.A. JMC was established in 1952 under Japan’s Export andImport Transactions Law to represent the interests of Japanese machinery exporters.
Ensuring Product safety has ever been the top priority among all the JMC member companies.
To that end, the JMC member companies who export various electronics devices using
Lithium Batteries have been striving to meet the international safety standards for Lithium
Batteries such as UL (Underwriters Laboratories) or IEC (International ElectrotechnicalCommission), and adopted only Lithium Batteries certified the conformity of the international
standards and regulations.

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Japan Machinery Center for Trade and Investment

While JMC recognizes the importance of ensuring the safety relating to transportation ofLithium Batteries, JMC is also concerned about the possible disruptive effects of the measuresstated in the proposed rule on the efficient flow of international commerce because theproposed rule raises a number of concerns.
In view of foregoing, JMC strongly recommends that PHMSA address the issues described
below.
Before proceeding, we would like to thank PHMSA in advance for taking the following
comments into account.
1. Enhancing the level of compliance with the current rules and regulations
It is highly regrettable that a number of battery-related incidents were reported. However,those incidents should have been averted if compliance with the current rules andregulations had been fully ensured as stated in the notice of proposed rulemaking. JMC
believes much more efforts should be made to enhance and improve the level of compliancewith the current rules and regulations before introducing the new rule.

2. Extending the preparatory period before entry into force.
In order for industries to be ready for the new rule, JMC recommends that the preparatory
period should be extended from 75 days to 18 months at earliest after publication of thefinal rule in the Federal Register for following reasons;(1) Because only a limited number of certification bodies and suppliers of packing
materials meeting the requirements of the proposed rule are available, it will take longtime for industries to be ready for the new rule.
(2) There left a substantial volume of Lithium Batteries packaged in accordance with thecurrent rules in the inventory.

3. Avoiding unilateral measures against the international standards.
In the absence of consistency to the international standards and regulations, it
could cause different country to establish different rules and could lead todisruption in exporting to and importing from the U.S.A. Regarding thetransportation safety of Lithium Batteries, ICAO (International Civil AviationOrganization) and other relevant international bodies have spent a long time indeliberating measures for the transportation of lithium batteries and have already2

Japan Machinery Center for Trade and Investment
established the new rules satisfying the current transportation safety needs. JMC
believes that the U.S. rules and regulations should be prescribed in a way
consistent with the international standards and regulations. If one country
implements such that stringent regulations unilaterally, it could work like a tradebarrier to foreign products, and could affect the consumers’ benefits in the U.S.
eventually.

4. Possible practical troubles caused by designating of Lithium Battery as dangerous goods(1) Burdensome of administrative procedures
If Lithium Batteries are designated unilaterally as dangerous goods by the U.S.,
it will inevitably lead to higher transportation costs and longer transportation
time because it will make trade related procedures including customs clearance
burdensome for export to/import from the U.S, and transit/transship to thethird countries via the U.S.
(2)

Disruption in air freight① If Lithium Batteries are designated as dangerous goods, it could disrupt
seriously air cargo transportation. The consignments of cargo would flood
into a limited number of air freighter available, furthermore, shippers might
be unable to book air freighters in timely manner. In addition, shippers might
be forced to change their transport mode from air to ocean. If those trouble
happen, it could not only cause consumers inconvenience but also disrupt
efficient flow of commerce along with the supply chain. If it causes shippers
to miss business opportunity, the dealers in the U.S. will face with serious
business loss. (It is estimated that the amount of inventory could rise by
10-20% because of raising various business costs. Those costs include
warehouse rental costs, loading and unloading costs, insurance costs, personnel costs,
utilities costs, system operation costs, depreciation costs, fixed asset taxes, inventory
valuation losses, inventory depletion costs, inventory disposal losses, disposal costs,
transport and delivery costs and marketing (sales promotion) costs)② By designation as dangerous goods, there will be significant increase in thecost of packaging, transporting and storing products, which will eventually
be borne to a large extent by the U.S. consumers.
③ Furthermore, the disruption in air freight could diffuse globally. Because theshippers cannot always designate their air carriers or freighters, hence, they3

Japan Machinery Center for Trade and Investment
have to prepare for the possibility that their cargo is loaded aboard the U.S.
air freighter even when the cargo is destined for other countries.
(3)

Prolonged delivery time of products to consumer’s hands
If the proposed rule, as currently written, is enacted, it could cause
prolonged delivery lead time of products to consumers, which implies toharm the U.S. consumers benefits because it will make difficult to acquire
products quickly in taking advantage of “built to order” under current
global supply chain.

(4) Returning products for repair, or recycling
If the proposed rule, as currently written, is enacted, it could make difficult
for consumers, retailers, or venders in the U.S. to return the products forrepair or recycling purpose in a timely manner.
(5) Broader impact on lithium battery-related equipments
The troubles mentioned above will not only be limited to Lithium Batteries
themselves, but will spill over to a broad range of products such as cellular
handsets and smart phones, PCs, digital video cameras, portable DVD players,and etc.

5. Marking Requirement
A new marking requirement in the proposed rule seems to have no practical effecton securing transportation safety of Lithium Batteries for following reasons;(1) Lithium Batteries and electronics products using the Lithium batteries aregenerally packed in the boxes or cartons and transported. No one can verify ifeach Lithium Battery or Product is properly marked from outside of theoriginal package in the process of transportation. Hence JMC believe themarking requirement indicated in the proposed rule will have no practicaleffect.
(2) The UN regulations on transportation have already mandated marking on thesurface of a battery and a package. JMC believes that there is no reason to add
the new marking requirement to the current marking requirement placed by
the UN regulations.

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6. Exempting certain type of Lithium Batteries(1) Lithium-metal batteries should be exempted from the requirements in the proposed
rule because any external shorting is unlikely to occur in the case of small batteries
embedded to a printed circuit board inside the devices.
(2) Low energy Lithium-ion Batteries should be exempted from the requirements in theproposed rule. The rule proposed exemption of ultra small low-energy batteries(for example, 0.3g or 3.7Wh or less) when packaged with or incorporated inthe devices. However, lithium-ion batteries used in many cellular handsets inthe U.S. market are over 3.7Wh, and it implies that it could impose a huge
impact on the transportation of cellular handsets to the U.S. market. Ultra
small batteries usable for cellular handsets in the U.S. market should be
included in the range of law energy.
(3) A charged Lithium-ion Battery possesses various level of energy depending on its
SOC (State of Charge), therefore, it is possible to elevate a transportation safety bylowering SOC under certain level of it. It might be effective to add a clause to allow
for exemption in exchange for the decreased level of SOC during thetransportation.(We have yet to discuss to define the allowable threshold of SOC)

Thank you for your consideration of our comments.
Regards,

Masanori Fukumoto
ChairmanCommittee on Facilitation of Global Operation and e-Trade
Japan Machinery Center for Trade and Investment

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