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Legislative First: 3PL Defined

Passage of HR 4040 marks a watershed for the logistics industry because the legislation includes a definition of the term third party logistics provider.

Representing the International Warehouse Logistics Association (IWLA), Pat O'Connor notes “IWLA and its members scored a significant government affairs success in Washington DC with the passage of a landmark consumer product safety law recognizing the role of a 3PL.”

The Consumer Product Safety Act “represents the most significant expansion of the Consumer Product Safety Commission (CPSC) since it was created in 1973,” noted O'Connor. “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.”

Included in the law, which was sent to the White House for signature, are new requirements and penalties on manufacturers, distributors and retailers. Important to the logistics industry, the legislation 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.

The term third-party logistics provider is defined as, “a person who solely receives, holds, or otherwise transports a consumer product in the ordinary course of business but who does not take title to the product.”

O'Conner further pointed out, “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.”

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