[Federal Register Volume 66, Number 204 (Monday, October 22, 2001)]
[Notices]
[Pages 53471-53472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-26561]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2001-10044; Notice 2]


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

[[Page 53472]]

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.
[FR Doc. 01-26561 Filed 10-19-01; 8:45 am]
BILLING CODE 4910-59-P