Authored by Joseph Marx, AT&T Assistant Vice President of Federal Regulatory

The U.S. Department of Transportation earlier this year proposed a new set of rules toughening the air shipping requirements on lithium ion batteries and devices containing these batteries.  The rationale behind this proposal focuses on a concern that these batteries could overheat or catch fire.

Every year, billions of lithium batteries are shipped via air and yet the Transportation Department has not pointed to one incident when a lithium ion battery, or a product containing such a battery, overheated or caught fire when shipped according to existing domestic and international guidelines.  Everyone agrees that safety is non-negotiable.  If the U.S. does anything, it should harmonize its existing rules with the more stringent international recommendations and enforce these regulations, not put new rules in place that would disadvantage U.S. consumers for no net benefit.

The side story that no one has focused on is what happens if the U.S. deviates from the international standard and imposes different and more burdensome rules than other countries. These new requirements could fundamentally change how every U.S. consumer electronics business, including the wireless industry, does business.  The U.S. has traditionally been the first to get every new wireless gadget that comes off the assembly line.  Well, not anymore.  If the new rules are put in place it could limit delivery of devices containing lithium ion batteries to transport methods or delivery locations other than those used with air delivery.

Can you imagine waiting three months to get delivery of new handsets from overseas while they are being delivered by boat?  It will be a great Christmas, in March.  How about waiting an additional week for a replacement for your wireless phone when it breaks?  Consumers have come to expect the quick turnaround that overnight delivery allows when it comes to replacing their broken wireless devices. 

Make no mistake:  these new rules could severely handicap FedEx’s and UPS’s ability to ship handsets with lithium ion batteries using air transportation.

In addition, the costs of implementing these new requirements have been significantly understated by the Transportation Department.  If lithium ion batteries are classified as “hazardous materials,” the surcharges to ship these materials will substantially increase – and this includes shipping costs via methods other than air.  More intrusive regulation costs money and, in the end, the consumer will see the prices of all these electronic devices, including handsets, go up.  So, in addition to getting products later, they’ll end up costing more.

Finally, these new regulations could have a very real impact on jobs.  If the U.S. imposes shipping regulations that are substantially stricter than those in the rest of the world, electronic devices are likely still going to be shipped via air, just to destinations outside the U.S., where they can be aggregated and shipped by truck to the U.S.  The U.S. transportation industry might end up paying the ultimate price for increased reliance on foreign transportation routes.

To be clear, I am not suggesting that increased costs, longer delays, and lost jobs are a reason to ignore safety concerns.  But these proposed rules threaten those results without the promise of any increased safety.  Let’s work to internationally harmonize the rules for shipping lithium ion batteries and all the consumer devices containing them and to enforce these rules vigorously.  That is the right way to ensure that our air transport employees are safe and we all get the cool new gadgets we want in a timely fashion.

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