Evaluating the Safety of Your Chemical and Hazmat Carriers

Carrier selection is often one of the most difficult tasks for a logistics manager. There is a constant battle not only between cost and quality, but also, safety. The purpose of this article is to offer some advice and guidance to chemical logistics managers on how to evaluate the safety of your Chemical and Hazmat Carriers.

Why should you evaluate the safety of your chemical and hazmat carriers?

1.It’s the right thing to do. The vast majority of companies I’ve worked with in the chemical industry are excellent corporate citizens. They understand that they can influence the impact of their company on society, the environment, and the safety of general public. The right thing to do is to make sure that each chemical transportation trucking company that moves a chemical shipment has the same safety ethic and has qualified people to handle chemicals and dangerous goods properly.

2.Due diligence. It’s amazing that the threat of lawsuits should be a reason for motivating people to do the right thing. However, in today’s World, it is a major consideration. There have been some major suits filed in the U.S. Where the shipper and the logistics company got dragged into court for the choice of carrier on their shipment. It just so happened that the truck driver got into a major accident and not surprisingly, had a poor safety record. The shipper and the logistics company couldn’t show due diligence in their choice of carrier. This particular case was settled out of court, but the risk is real.  Don’t let one of your chemical shipments end up in front of a judge!

3.Risk Reduction. Insurance these days seems to be getting more expensive by the minute. If you can show your insurance adjustor a system of reducing risk and evaluating the safety of your carriers, it may result in lower premiums.

4.Cost Reduction. Even a small spill or leak in a chemical shipment can cost thousands of dollars to clean up, not to mention the bad press and PR. In this light, saving $50 bucks on a shipment in the rate seems like a poor decision. Long-term cost reductions can be seen in reduced incidents, spills and cleanup if properly trained, managed and experienced chemical transportation carriers are used to move your chemical shipments.

What should you be looking for in a Chemical and Hazmat Carrier?

1.Safersys Rating. http://www.safersys.orgwill have an inspection and violation history for your carrier (assuming they are licensed for the US). This is a great website with a lot of excellent data on carriers including: years of operation, insurance, Out of Service Inspections, violations, accidents and any safety audits that have been done. Shortly, (hopefully before the end of 2010) CSA 2010 data and safety information should be made public. This is a new system to score and track the safety of carriers.
2.Insurance. Most people are not aware that there are statutory minimums for insurance coverage in order to obtain/maintain your Motor Carrier license. A summary is listed below:

• For Vehicles with a Gross Vehicle Weight Rating (GVWR) of 10,000 pounds or more:
  $750,000 for General Commodities (non-hazardous)
  $1 Million for hazardous except class A & B explosives
  $5 Million Class A & B explosives, Hazardous materials transported in specified capacities in tanks or hoppers (generally bulk shipments) and/or any quantity of hazardous materials as specified in 49 CFR 173.403 of the Federal Motor Carrier Regulations.
• For vehicles with a Gross Weight Rating (GVWR) of less than 10,000 pounds:
  $300,000 for general commodities except any materials listed below.
  $5 Million Any quantity of Class A or B explosives, for any quantity of Poison Gas (Poison A) or highway route controlled quantity of radioactive materials.
  Common Carriers: Must carry minimum liability as listed above plus $10,000 cargo insurance.
  Broker Authority: Brokers must maintain a surety bond or trust fund in the amount of $10,000.

In addition, you should check on cargo liability. How much coverage do they have and what is the deductible?

3.Policies and Procedures. You should have a standard practice of evaluating a carrier’s policies and procedures around safety. For example:

• Does the carrier have a written security policy?
• Can they provide WSIB Clearance Certificates (if based in Ontario)?
• Do they conduct background checks on drivers at the time of hire?
• Does their driver training program include safety and security training?
• Do they have an accident investigation procedure in place?
• Are drivers trained what to do in the event of a spill?
• Do they have a preventative maintenance program in place?
• Are they FAST, C-TPAT or PIP approved?
• Do they have corporate safety policy?
• How do they track and handle violations for their drivers?
• Are all their drivers TDG trained?
• Are their drivers WHMIS trained?
• Do they have a texting policy?

As a final thought, your carrier review process should be risk based. For example, you may choose to review a chemical transportation carrier’s safety fitness more often for carrier who moves your Class 6.1 shipments and less often for non-hazardous chemical carriers. Keep in mind though that risk increases both with the material transported and the frequency. For example, a drum of Class 6.1 – Toxic that ships once per year would be less of a risk (ie: less need for a frequent safety review) than a daily truckload shipment of a Class 3 -Flammable Liquid. Even though a Class 6.1 is a more dangerous material.