Risk Management Calls for Team Effort
Oct 1, 2001 12:00 PM, John Conley, Vice-President National Tank Truck Carriers Inc
THE PRIMARY reason for risk management in the compensated tank truck industry is self-interest. It is in our own best interest to operate trucking companies in which every trip is made with no accidents, no spills, and no injuries. While we may not call it risk assessment, analyzing our business to identify and eliminate potential incidents is a way of life. When negative events do occur, we make every effort to determine what caused the defect and to take corrective action.
National Tank Truck Carriers and the association previously known as CMA (Chemical Manufacturers Association) developed a risk assessment section a few years ago as part of a Manual of Recommendations. NTTC contributed to the risk management project conducted last year for RSPA (Research and Special Programs Administration) by ICF Consulting.
I would like to talk about practical risk management as I see it practiced in my industry. With pun intended, I am concerned that our risk management efforts are at risk.
Risk management in the tank truck industry today has three key components:
- Regulatory compliance
- Well trained, experienced drivers and employees
- Effective communications with shippers and consignees
Tank truck transportation of hazardous materials is, and should be, heavily regulated. The regulatory system developed by RSPA and other governmental agencies, largely with the cooperation of NTTC and others in industry, works. For the responsible carrier, regulations represent a framework upon which safety programs are constructed. For the public, regulations represent a level of protection against irresponsible carriers. With good enforcement, DOT will catch the bad guys who, through intent or neglect, do not comply with the law.
I have been around the tank truck industry for over 25 years. I have seen a lot of regulations developed and I have known the dedicated people who wrote them. The regulatory program we have today is the result of common sense or the need to address a concern that emerged.
Common sense says we need regulations governing what kind of tank trailers can haul hazardous materials. Thus we have Part 178 — Shipping Container Specifications. Real world problems with some of those tank trailers resulted in Part 180 — Continuing Qualification and Maintenance of Packaging. Likewise, common sense said we needed basic regulations covering who could drive a truck — age, skills, licensing, etc. Societal changes required development of regulations regarding drug and alcohol abuse.
My point is that the regulations and a carrier program aimed at compliance comprise a risk management system. It identifies and tries to eliminate potential failures. It attempts to remedy deficiencies when they do occur. If a carrier does nothing but comply with the law, that carrier is practicing risk management. For the carriers that belong to NTTC, regulatory compliance is just the beginning of risk management.
Now to my concerns. The tank truck industry sees transportation as a process that begins when an order is placed and product loaded into the tank. It ends when the tank trailer has been cleaned of all hazardous residues. We believe that there is a strong regulatory role for the Federal Department of Transportation throughout this process. A strong federal DOT role ensures consistency in compliance and enforcement, and enhances safety.
We are concerned that DOT may be backing away from this strong role in HM 223. If transportation is viewed as simply occurring from “gate to gate,” we will soon learn all too well that uncertainty and inconsistencies in regulation and jurisdiction within the gates will lead to incidents on the road. We urge DOT to continue its stewardship over the entire transportation process.
The key to the carrier's risk management program is the driver. He is the carrier's eyes and ears at the shipper facility, and the shipper's and carrier's eyes and ears on the highway and at the consignee. The driver's tools for performing this risk management function are his training and experience and the information we provide him about the product he will haul and how it should be delivered. His incentive to play this role is that we — carriers and shippers — listen to him when he points out a potentially dangerous situation.
With pride, I will state that the tank truck industry has the safest drivers on the road, today. They are respected by the regulatory community and by their truck driving peers. It takes a special breed of person to haul a 7,000-gallon load of chemicals on today's highways that are congested with aggressive drivers. The truck driver must have confidence in himself, in the company he works for, and in the customer whose product he transports.
Our industry spends about $5,000 and hundreds of hours in hiring and training a chemical tank truck driver. Very little time and money are devoted to teaching him how to drive a truck. Most chemical tank truck carriers hire only drivers with over-the-road experience.
The vast majority of that training effort goes to teaching the driver about the specialized equipment he will operate and the products you shippers will give him to transport. The driver is constantly trained to do things right so he will recognize when things look wrong.
In the past, the chemical shipper played an integral role in that training. Hopefully, most still do. We both are asking the driver to perform more and more non-driving duties today as we look for ways to reduce distribution costs.
Anecdotally and statistically, most transportation incidents take place at the consignee facility. Shippers know how to load the product, and our drivers know how to get it to the shipper's customer. It is at the consignee where the driver is most likely to confront situations that set off the alarm bells for which he has been trained to listen. It is at the point of delivery that our training programs and your information are most likely to be tested.
How do the shipper and carrier respond when the driver calls to say something does not look right? Do we err on the side of the driver or do we tell him to just deliver the load? That perhaps is the best measure of our risk management system. Where does the consignee fit into the risk management system?
There are clear reasons for concern about this key human element in the carrier risk management system. There have been plenty of comments from carriers and reports in the trade and daily press about the driver shortage. Any safety director will tell you there really is not a shortage of people who want to drive trucks. But there is a significant shortage of drivers we feel confident about hiring to drive our equipment and haul the loads.
Shippers know their product; we know our equipment and drivers. The more information we can provide each other about the entire transportation transaction, the better we can manage the risks associated with the distribution of chemicals.
The ICF/RSPA study on risk management I mentioned earlier has a good description of the several steps in the transportation process where cooperation and communication between the shipper and carrier and with the consignee is essential. From our perspective, this process begins with the placement of an order and continues through delivery and until the tank trailer is “clean, dry and odor free.”
I will not review each of the steps here. The obvious elements are product description, equipment selection, trained driver selection, loading and unloading characteristics, route selection, adequate transport time, delivery site considerations, emergency response planning, and proper trailer cleaning and handling/disposal of heels or waste.
There are two areas that NTTC requests you to include in your discussions with your carriers and that we ask for your support in our efforts to reduce risks in product transfer and in employee protection. These are ongoing efforts in which we have already asked for the support of the American Chemistry Council (ACC).
First, to comply with Environmental Protection Agency clean air mandates, more vapor recovery is being required during the loading of tank trailers. This has brought more “closed loop” product loading where vapors are captured. To accomplish this reduction of vapors, we have to provide trailers equipped to connect to chemical plant loading systems. While this has been common in the petroleum industry for years, it has not been widespread in the chemical industry.
Our challenge is that there is great variety in loading systems at chemical plants. Indeed, there are sometimes different systems within the same plant. The more standardized we can make our trailers in terms of connections and fittings, the less chance there is for error. If the trailer we send does not match the loading connection at the plant, we have to send a replacement, probably under tight time constraints. Much worse, there may be a temptation for the loading personnel or our driver to “jury-rig” a vapor collection fix. We have asked shippers and the ACC to join NTTC and the Truck Trailer Manufacturers Association in developing a standard location system for chemical vapor recovery fittings on our trailers. While no such system could handle all chemicals, the more consistency we can develop, the more we can reduce the risk of loading incidents.
The other area in which we urgently request chemical industry support involves use of nitrogen blankets or other inert gases for product transfer. The use of nitrogen may well be the most serious product-handling-related risk faced by our employees — and some of yours — today. There have been too many nitrogen-related deaths and near misses among tank loaders, cleaning rack workers, and maintenance shop workers in recent years.
There is no doubt that the use of nitrogen is increasing. We have to work together to institute a communications/warning system to communicate the presence of nitrogen to anyone who might encounter it from the time it is introduced into the cargo tank until it has been completely eliminated from the vessel.
We have raised this issue with ACC and discussed it at our own executive and safety meetings. The answer that “If people followed proper tank entry procedures they would not be hurt” is both correct and irrelevant. How much longer do you think OSHA (Occupational Safety and Health Administration) will buy that answer? We need the chemical industry's help in solving this worker safety threat. We are so serious about this safety issue that we are preparing regulatory language that we intend to submit to the Department of Transportation later this year.
If a chemical company is using nitrogen in any part of the transportation process in which carriers are involved, please ensure that this practice is part of the risk management discussion with carriers. Don't cave in to lawyers on this issue.
As in the two other areas of carrier risk management I have discussed, I have some concerns about the status of effective shipper/carrier/consignee communications. While there have been — and hopefully still are — some excellent joint programs conducted, I am told that there is less communication today. Economic demands on shippers have sometimes resulted in the reduction of managers and others who are knowledgeable about the tank truck transportation of chemicals.
Some of the close partnerships developed by shippers and their carriers are being diluted by the use of third parties that simply match loads with carriers based on availability and price, or the rate reduction obsession within chemical company traffic departments. It is very difficult for carriers to discuss risk management with a computer. We applaud any efforts by RSPA to regulate the hazmat activities of third parties.
In too much of the chemical industry today, carrier selection and compensation resemble a gladiator contest in ancient Rome. The shipper throws his business — perhaps on a CD — into the ring and watches as the carrier combatants slash each other for a share of the spoils. Lowest rate standing at the end of the contest wins.
If this situation is going to continue, then I suggest that shippers include financial stability of the carrier as a key element of the risk management program. Does the carrier have the financial resources to provide the safe transportation that the shipper has come to demand and deserve?
Finally, our industries and our government do a great job of risk management. The safe and strong chemical production and distribution system we have developed to support the North American economy is the envy of the world. Our people do live better through chemistry, and the products of chemistry are delivered to them in a safe and economical way. People from around the world visit our chemical plants and our tank truck terminals to see how we conduct business. Let's keep up the good work.
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