In today’s supply chain, the way people think about Dangerous Goods transport is evolving.
It used to be common for organizations to view hazmat compliance as a necessary evil—just a cost of doing business. They cared about safety, and they cared about avoiding delays and civil penalties, but that was the extent of their concern.
Today, more and more companies see compliance as a competitive advantage. One of them is supply chain giant CEVA Logistics, where Global DG/HSE Specialist Rusty McMains has grown hazmat transport from nearly zero to an operation that contributes millions in monthly revenue.
We chatted with McMains recently to explore how compliance opens the doors to new revenue sources, how to implement and execute a compliance program, and the role of training in making those advantages possible.
From zero to 700,000 a year
“When I took over hazmat in 2009, our global policy said we are to refuse hazmat,” McMains recalls. “We didn’t actually have a hazmat program within our company at the time. They sent me to hazmat school—DOT, IATA and IMDG training.
“I returned to the office with a completely different understanding of what DG was and what it meant to our company. I recognized deficits and needed improvements and brought those to our Risk Director. I began reviewing our then current DG policies, processes and procedures. Because I had such a deep and intimate understanding of the direct financial costs and impacts—to both our company and to our customers and our customers’ customers—I began the rebuilding process with this intent in mind.
Today, he says the company doesn’t specifically track how many hazmat shipments it processes, but “an initial indicator after the first week’s introduction of our Driver Mobile DG Checklist” came to 250 hazmat shipments a day—or 700,000 a year in the U.S. alone. And “this number does not include any DG shipments that were already in transit,” McMains clarifies.
Do the math: Since hazmat shipments typically carry a $25 surcharge, 700,000 shipments generate an extra additional $17.5 million a year in revenue.
McMains adds, “And that’s one country out of 140.”
The Hazardous Materials Management Program
At CEVA, Dangerous Goods aren’t treated like any other cargo. McMains has built a Hazardous Materials Management Program (HMMP) that could be a model for other organizations.
“The most important aspect of the HMMP is our almost immediate involvement in onboarding new business. We can identify every part of the business, including various regulation trainings, permits, buildout, equipment, materials, space, fire suppression, location, property and—most importantly—the related costs, current and recurrent.”
The HMMP encompasses four pillars: Support, Risk Identification and Assessment, Knowledge Management and Training & Resources. Written processes are critical to each.
“Written processes, however small, are the key to any successful program,” says McMains. “This is most important since CEVA manages DG in both freight management and logistics management. Any written SOWs/SOPs, DG flow processes and DG work instructions become part of the contract and are in place on Day One.”
Asked who within CEVA is trained to enact these processes, McMains says, “The more proper question is, ‘who isn’t enrolled?’ It’s a systemic program inclusive of every level of involvement from the top down and bottom up. The HMMP is designed to be part of our company ‘language’ from day one, regardless of an associate’s job function and responsibility.”
“Everybody is responsible for everybody”
Many organizations ask Who should receive hazmat training? CEVA’s response is Darn near everyone.
McMains says, “Anybody that touches hazmat—if you work on the dock, if you are data entry, if you’re a dispatcher, if you oversee employees that are managing hazmat, if you’re a station manager—we classify you as a hazardous materials employee.
“Everybody gets DOT training, because we don’t know what you’re going to do today versus tomorrow.”
His program also makes sure trainers within the company get trained. “Somebody new comes along, that person shadows an experienced person for a week or so—getting acclimated to the marks, the labels, the different types of freight, learning the different ways to handle a 55 gallon drum versus a 10-pound box.
“Then, next week they switch the roles. Now, the experienced employee shadows the new employee and begins to guide them through it. Everybody is responsible for everybody. Hazmat becomes part of the language from day one.”
Learn how our total value of compliance framework can make Dangerous Goods compliance a competitive advantage for your organization!
Labelmaster is a full-service provider of goods and services for hazardous materials and Dangerous Goods professionals, shippers, transport operators and EH&S providers. See our full line of solutions at labelmaster.com.