Congress Defines Role of 3PLs

Sept. 1, 2008
The International Warehouse Logistics Association (IWLA) and its members recently scored a significant government affairs success in Washington, DC

The International Warehouse Logistics Association (IWLA) and its members recently scored a significant government affairs success in Washington, DC. A landmark consumer product safety law was passed in early August recognizing the role of a third-party logistics provider (3PL). Legislation (HR 4040), now at the White House, marks the first time that the term third-party logistics provider has been defined in federal law. 3PLs are specifically defined in this historic legislation that will remove toxic chemicals from toys, and put a more powerful and better-funded cop on the beat to police the safety of consumer goods.

The measure, now awaiting President Bush's signature, represents the most significant expansion of the Consumer Product Safety Commission (CPSC) since it was created in 1973. It also represents a fundamental shift in the federal government's approach to protecting consumers from dangerous products: transforming a reactive stance to a preventive one by dealing with hazards before goods reach the marketplace, including products manufactured overseas. The new law imposes substantial new requirements and penalties on manufacturers, distributors and retailers, but specifically states that a 3PL is not to be considered a manufacturer, distributor or retailer. The 3PL provision ensures that responsibility for compliance with CPSC recall orders, etc., rests with the product owner and not the third-party warehouse.

Establishing the role of the 3PL in the supply chain via federal law is critical as the domestic and global supply chain comes under increased scrutiny by legislators and regulators. Concerns over cargo security and product safety dominate the policy debate. This new law reaffirms the role of the 3PL as an intermediary in the supply chain, similar to the carrier or forwarder. It sets a critical precedent as Congress turns to similar legislation for food, pharmaceuticals and cargo security.

IWLA and it members were instrumental in making this happen. The process started in March when an IWLA member asked association representative Pat O'Connor in Washington DC to look at the bill that was then pending in the Senate. It soon became clear that the CPSC bill would impose responsibilities on third-party warehouses, by defining them by default as a “distributor.” IWLA drafted an amendment to fix the problem and met with congressional staff to seek support. Although congressional staff showed interest, the process went into overdrive when an IWLA member from Arkansas reached out to Senator Mark Pryor (D-AR), a key Senator on the House-Senate conference committee, a small working group tasked with writing the final legislation. Senator Pryor's interest was increased as IWLA members in key states mobilized to contact other members of the House-Senate conference committee. This was followed by a call to action to the IWLA membership that resulted in hundreds of letters to Congress. In case anyone believes one letter can't make a difference, one of the letters sent by an IWLA member convinced a key congressman from Tennessee to enter the fray. Representative Bart Gordon's (D-TN) office called O'Connor and said that Gordon wanted to help. Representative Gordon contacted Senator Pryor. They reached out to the CPSC, who called O'Connor several times to discuss legislative language, with the end result being adoption of the IWLA amendment.

Editor's note: As of press time, we learned that President Bush had signed HR 4040 into law.

Pat O'Connor is the IWLA representative in Washington, DC.

Joel Anderson is IWLA President and CEO.

Latest from Global Supply Chain

25560070 © Yuliia Brykova |
Supply Chain Stability Improving
#64128824@Igor Groshev|Dreamstime
Preparing for Longer Conflict in the Red Sea: