Dangerous Goods Compliance: Why It Needs to Be Redefined

Tags: Logistics, Supply Chain, HazMat

Rob Finn, Vice President, Labelmaster

The landscape for shipping dangerous goods (DG) and hazardous materials (hazmat) continues to evolve. With thousands of items classified as “hazardous” and shipping regulations becoming more complex, moving DG in a secure, safe, compliant manner is more critical than ever.

Unfortunately, those responsible for DG/hazmat face an uphill battle – not only in meeting evolving regulations, but also in overcoming inadequate infrastructure and training.

According to Labelmaster’s 2017 Global Dangerous Goods Confidence Outlook, conducted to gain insights from DG pros around the world, there is general lack of confidence in their organizations’ ability to meet changing compliance mandates. What are the barriers?

  • Reliance on manual processes: Despite modern technology advancements, many shippers (one-quarter of respondents) still rely on manual processes to handle DG compliance. This means searching through regulatory publications for guidance on packaging, labels, marks and documentation, as well as manually maintaining classifications for products, parts, and more.
  • Resource reallocation: Companies looking to cut costs earmark DG compliance as one area to combine roles. In fact, 56 percent of hazmat pros have or expect the role of DG compliance to be combined with other roles within their organizations. Additionally, 39 percent believe their increased compliance responsibility is due to cost-cutting measures. This means shippers are entrusting this vital role to folks only partially focused on the job due to other responsibilities.
  • Inadequate training & infrastructure: Handling DG can have serious operational, financial, and environmental ramifications. Of those surveyed, 33 percent are not confident that their current infrastructure and training can adopt to the changing needs of their business. Unfortunately, many organizations view training as a “necessary evil” and are simply doing just enough to comply with the stated regulations for training. Nearly half of those surveyed said their training is conducted solely to meet regulatory requirements. Likewise, 48 percent said they DO NOT believe it adds real business value.

Compliance Confidence Starts With Redefining Its Business Value

What will it take to overcome barriers these barriers? Shippers must recognize (and define) the true impact of a safe and compliant organization–beyond simply the fear of being fined. And, DG pros need to redefine their business value from a cost center to a profit center, a customer acquisition lever, and even a competitive differentiator.

Companies invest in areas they believe will grow their business profitably, and that must include DG. Their willingness to fund technology and training related to hazmat often starts at the top levels of the organization. But, for many, there is lack of awareness among company leadership regarding what those responsible for compliance actually do and how a forward-thinking hazmat shipping function can drive business growth.

Case and point: More than one third of respondents agreed their supervisors are unaware of exactly what they do. Those responsible for DG must do a better job of defining how their operations make overall warehouse and shipping operations more effective and efficient, reduce costs, and grow the customer base.

In addition, better understanding of the business value of DG compliance will open the door for organizations to embrace the power of technology. Innovative technology is available for every part of the supply chain, including DG compliance, and shippers must recognize the impact DG software has on improving compliance. In fact, according to the survey, those who invest in DG software are more likely to feel their company’s infrastructure is “advanced” versus “current but needs updating” or “lagging behind the industry.”

And, those who feel their company’s infrastructure is “advanced” were more confident in their ability to keep up with changing regulations, less likely to have shipments stopped, and more confident that their training provides real business value.

The Business Case for DG Compliance Investment

It may be an uphill battle, but those responsible for DG compliance need to elevate the conversation with executive leadership and make a real business case for why compliance technology and advanced training are critical to the organization. Consider what data and proof points would help them truly see that DG compliance equates to more than the mere cost of doing business or an avoidance of fines. Show them how compliance can ultimately impact whether an organization experiences delayed shipments that negatively impact customer service and brand equity.






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