Taking Responsibility For Responsible Care
Shippers and industry organizations help push carriers and 3PLs to become RC partners.
Maybe it was the motivation to put their money, and movements, where their mouths are. Maybe it was the mojitos.
At the annual Responsible Care (RC) conference in Miami last May, the American Chemistry Council (ACC) announced a plan to begin surveying all members on the extent to which they use Responsible Care partner carriers to transport their shipments.
This major development is one of several important new trends in the safety and security of hazardous materials in commerce. Beyond the ACC plan, some member companies are developing their own initiatives to convince carriers and third-party logistics providers (3PLs) to become RC members.
North of the border, the Canadian Chemical Producers' Association (CCPA) is taking a targeted approach to spreading the RC ethic and processes to the service sector. The association and member producers are carefully selecting specific carriers and working closely with them.
The RC codes of management practice for process safety, health, and environmental compliance were first developed by the CCPA in 1978. They were soon adopted by ACC, and both organizations have continued to expand and adapt the codes.
ACC developed Transportation Community Awareness and Emergency Response in 1985, which CCPA quickly adopted. The U.S. codes of management practice contain an explicit product stewardship code, and CCPA developed specific product stewardship guidelines at the end of 2004.
Initially, both associations urged carriers and other service providers to adopt RC in its entirety. Railroads were more willing than truck lines, given the time and expense of adoption. Carriers, manufacturers, and associations were frustrated, however, because while the RC ethic was easily transferred, the practices that applied to manufacturing were not readily adopted by the service sector.
In response, both ACC and CCPA created partner programs, with codes adapted for service providers. The initial response was promising, but when early adopter service providers did not gain much new business, some soured on the idea and others put off joining.
"The partner program started as a marketing tool for carriers," says Debra Phillips, manager of Responsible Care for ACC. "The idea was that carriers would earn more business by adopting the codes. That was a success to a certain degree."
She admits, however, that the bump was likely less than early partners had hoped.
ACC cannot require members to work only with RC partners, "which would violate anti-trust regulations," Phillips notes, but starting next year the association will begin polling its members to determine how much business they give to RC partners.
"We will ask members if they consider partnership status when seeking bids, then publish the results," says Phillips. "We cannot obligate producers to use partners, but making the survey results public will generate peer pressure."
Setting the Standards
Producers can select their own metrics—total value and/or number of shipments, tons, and ton-miles, for example. Obviously that allows a great deal of leeway to choose the most flattering light. But Phillips says the industries will eventually develop standards.
Indeed the response has been strong.
"We have received an onslaught of new partnership applications since the RC conference," says Phillips. "We are trying to grow the portion of shipments for which our members use partner carriers, and this is an important component of that effort."
ACC currently claims 70 partners of all types, largely railroads and bulk truck lines, and has received close to 20 recent partnership applications. All U.S. Class 1 railroads have become partners; Canadian National (CN) and Canadian Pacific (CP) are partners of both ACC and CCPA.
Fewer LTL carriers and 3PLs have pursued membership, a fact that is not likely to change given the nature of the LTL business, Phillips says. She is confident, however, that significantly more 3PLs will enter the fold.
"3PLs are market driven," says Phillips. "Producers have outsourced a good portion of logistics services, and chemical logistics is a growing business for 3PLs, so we expect more of them will become partners."
ACC is meeting them halfway. "Until two years ago, we did not have a sector in the codes for 3PLs. As we discovered how far into the chemical supply chain they have moved, and what decisions they are making for chemical producers, we realized 3PLs are an important part of our industry," Phillips explains.
Individual producers are also fostering the partnership program, according to Phillips. She declined to name specific firms, but says many are actively offering to sponsor their carriers.
"One member has offered to pay the partnership dues—which can total tens of thousands of dollars—for its top-performing carriers," she notes. In addition, some RC members plan to phase out their non-partner carriers over the next few years.
For its part, CCPA is taking a tightly focused approach to recruiting service provider partners.
"Joining RC is not a universal value proposition," says Brian Wastle, vice president of Responsible Care at CCPA. "We have simplified the membership process, and added value for carriers. But we complete a needs assessment with each carrier to determine if it makes sense to pursue partnership."
Last year CCPA held a workshop to kick off the new partnership initiative, and has formed a new committee to pull together issues common to carriers and 3PLs. CCPA is also working with the Canadian Trucking Association to enhance the motor-carrier evaluation process.
Both the CN and CP railroads have become CCPA RC partners; so have two of Canada's leading railcar leasing operators, Procor and GATX Canada. CCPA's partner list also includes four truck lines: Harmac Transportation, Northwest Tank Lines, PDI, and Harold Marcus.
Harmac, based in North York, Ontario, has been involved with RC for six years and has just completed its re-verification.
"One of our core customers, Ashland Canada, approached us in early 2000 about becoming a partner," says Curt Roush, director of security and compliance for Harmac. "We knew it would be a challenge, but with Ashland as a sponsor, we started the three-year cycle to our first verification, ensuring that we had the codes of practice in place."
That verification came in October 2003, with re-verification last October. In that time, the partnership codes have evolved.
"In the first verification we were scrutinized as a manufacturing company would be," says Roush. "It was cumbersome. How could we show, for example, that our research and development complied with RC requirements?"
Verifying the Process
Since then, CCPA formed the Transportation Partners Council, which developed a verification protocol specifically for carriers. The 151 verification elements were consolidated into 37.
"The other elements were not eliminated," says Roush, "they were aligned with transportation operations. It makes the re-verification process more meaningful. Not easier—it's not supposed to be easy—but more sensible.
"Internally," he adds, "we recognize that becoming an RC partner makes us a better company."