01-26561. Reliance Trailer Co., LLC; Grant of Application for Temporary Exemption From Federal Motor Vehicle Safety Standard No. 224

This notice grants the application by Reliance Trailer Co., LLC, of Spokane, Washington (“Reliance”), for a temporary exemption of its dump body trailers from Federal Motor Vehicle Safety Standard No. 224 Rear Impact Protection. The basis of the grant is that compliance would cause substantial economic hardship to a manufacturer that has tried in good faith to comply with the standard.

We published notice a of receipt of the application on July 10, 2001, affording an opportunity to comment (66 FR 36032).

Why Reliance Says That It Needs an Exemption

In February 2001, Reliance acquired the assets of SturdyWeld, another Washington company, in order to commence manufacture of “trailers built to mate with asphalt paving equipment.” We observed that this appears to be a horizontal discharge trailer that is used in the road construction industry to deliver asphalt and other road building materials to the construction site. However, the sole commenter on the notice, Dan Hill & Associates, pointed out that the trailer is a “dump body/gravity feed” trailer. Dan Hill distinguishes this type of trailer as one that “can handle everything from 9-foot-plus slabs of concrete all the way down to sand, whereas * * * controlled horizontal discharge products are limited to the transportation of hot-mix asphalt and, on occasion, other related processed road-building materials under 2″ in size.”

Standard No. 224 requires, effective January 26, 1998, that all trailers with a GVWR of 4536 kg or more, including Reliance's trailers, be fitted with a rear impact guard that conforms to Standard No. 223 Rear impact guards. Reliance argued that installation of the rear impact guard will prevent its trailers from connecting to the paver and performing their mission. Thus, its trailers will no longer be functional.

Reliance's Reasons Why It Believes That Compliance Would Cause It Substantial Economic Hardship and That It Has Tried in Good Faith To Comply With Standard No. 224

Reliance is a small volume manufacturer whose total production in the 12-month period preceding its petition was 268 trailers. In the absence of an exemption, Reliance says that “considering the over $2 million paid for the [SturdyWeld] Division and if we are able to sell the over $1 million inventory, but have to shut this operation down, we would probably lose over $1 million.” Reliance's cumulative net income after taxes for the fiscal years 1998, 1999, and 2000 was $150,793.

Reliance apparently learned of its compliance problem after producing 26 of the trailers in question. It has determined that these trailers fail to comply with Standard No. 224, and has notified NHTSA pursuant to 49 CFR Part 573. It has also filed a petition for a determination that the noncompliance is inconsequential to safety. Reliance has also discovered that “this is a nationwide, yet unsolved, problem,” citing three manufacturers of similar trailers who have received temporary exemptions from Standard No. 224, Beall Trailers, Red River Manufacturing, and Dan Hill Associates.

The petition discusses “possible alternative means of compliance” which “will include the analysis of moveable, replaceable or retractable under-rides. To date these concepts are very difficult to maintain due to the nature of the paving material.” After discussion with its customers, Reliance “will proceed to design, build and test prototype designs to meet the regulations and allow dumping asphalt into paving equipment.” It believes that it will comply by the end of a two-year exemption period.

Reliance's Reasons Why It Believes That a Temporary Exemption Would Be in the Public Interest and Consistent With Objectives of Motor Vehicle Safety

Reliance argues that an exemption would be in the public interest and consistent with traffic safety objectives because the trailers “represent about 80% of the output of the 38 employees' of the SturdyWeld division, and “if this petition is denied, the operation will be closed and those people will be out of jobs.” An exemption would allow it “to continue to provide equipment needed by road building industries to expand and develop” the national transportation system.

The trailers will be built in small quantities. “Typical hauls are short” with a minimal amount of time traveling on highways compared with most freight trailers,” which ”diminishes the exposure for these vehicles.” Reliance knows of no rear end collisions and consequent injuries with its type of trailer.

In commenting on the application, Dan Hill did not “take a position to either support or criticize Reliance/SturdyWeld's application for a temporary exemption.”

As we understand it, Reliance acquired SturdyWeld in order to enter the dump body trailer market. The trailers did not comply with Standard No. 224, and Reliance has asked for a temporary exemption of two years, at the end of which it believes it will comply. In the meantime, it could not sell dump body trailers, and might lose more than half of its investment of $2 million in SturdyWeld. Such a loss would presage a negative effect on its net income, which, on a three-year cumulative basis is $150,793. These factors indicate that to require immediate compliance would create substantial economic hardship.

We must also find that an applicant has made a good faith effort to comply with the standard from which exemption has been requested. Understandably, if Reliance only recently learned of its noncompliance, its compliance efforts are only in the early stages. The applicant referred to compliance as “a nationwide, yet unsolved, problem,” and cited three manufacturers who had received temporary exemptions from Standard No. 224: Dan Hill, Red River Manufacturing, and Beall Trailers of Washington, Inc.

In its comment, Dan Hill distinguished between horizontal discharge trailers of the type that it and Red River manufactures (“a market that consists of fewer than 400 unit sales per year”), and dump-type trailers manufactured by the applicant, Beall Trailers, and others (“on the average, 7.451 units per year (Source: The U.S. Census Bureau, measurement period 1991 through 1997).” It would appear, then, that the factual situation in the Beall exemption might afford an appropriate comparison.

We granted Beall NHTSA Temporary Exemption No. 98-5 on July 8, 1998 (63 FR 36989), and extended it to August 1, 2001 (66 FR 22069). Beall was similar in size to Reliance. It had produced 311 trailers in the year preceding the filing of its petition, of which 124 were dump body types. Its average net income for 1995, 1996, and 1998 was slightly lower than Reliance's cumulative figure (The figure reported for 1997 was a before-taxes number). Both its original petition and petition for renewal recounted difficulties in developing a rear impact guard that was compatible with paving equipment, including hinged, retractable devices. Although Beall's exemption has expired, the company has indicated that it will have to apply for a further exemption. Beall's experience indicates that compliance by dump body trailers with Standard No. 224 can be a complex matter. Thus, the term of the exemption we are granting Reliance is the two years that it requested.

We must also find that an exemption would be in the public interest and consistent with the objectives of vehicle safety. This exemption will afford additional time for Reliance to solve its compliance issue. The vehicles produced under a temporary exemption will be built in small quantities and the time that they spend on the highways no more than the other trailers granted an exemption. Thus, the exposure of other vehicles to the rear of a trailer lacking a rear impact guard is likely to be minimal.

In consideration of the foregoing, it is hereby found that to require compliance with Standard No. 224 would result in substantial economic hardship to a manufacturer that has tried in good faith to comply with the standard, and that a temporary exemption would be in the public interest and consistent with the objectives of motor vehicle safety. Accordingly, Reliance Trailer Co, LLC is granted NHTSA Temporary Exemption No. 2001-6 from Federal Motor Vehicle Safety Standard No. 224, Rear Impact Protection, expiring October 1, 2003. The exemption covers only dump body trailers manufactured by the applicant.

Authority: 49 U.S.C. 30113; delegation of authority at 49 CFR 1.50.

Issued on October 16, 2001.

Jeffrey W. Runge,

Administrator.