Handle with care

From the June 2019 print edition

Prior to the industrial revolution most manufacturing and production of goods occurred at home. With the evolution of machinery and the expansion of global markets, the demand to transport goods grew as these activities were conducted offsite and away from the end user.

The complexity of transporting products has increased with the growth of dangerous goods along with the diversity of transportation methods: rail, sea, air, road, pipeline or intermodal. Dangerous goods within the supply chain can take on many forms, from liquids such as acids, to gases such as oxygen cylinders and solids like lithium batteries.

There are nine classes of dangerous goods according to Canada’s Transportation of Dangerous Goods Regulations (TDG Regulations). Some of these are further broken down by the nature or characteristic of the substances. This includes explosives; gases; flammable liquids; flammable solids; oxidizing substances and organic peroxides; toxic and infectious substances; radioactive materials; corrosive materials and miscellaneous products; substances or organisms and so on.

Each class of dangerous goods has unique requirements for handling, storage and transportation. There are some dangerous goods that may also fall in the controlled goods list which has supplementary security regulations as defined in the Defence Production Act in Canada. These items include finished goods, components and technical data that have national security sensitivity or military significance along with some goods on the Export Control List. These goods are controlled by the federal government and managed by the Department of National Defense and the Public Services and Procurement Department.

Some examples include larger calibre firearms and ammunition. The controls in place encompass several considerations such as limiting who can possess and transfer them, how the goods are stored, detailed documentation regarding transactions, inspections and breaches as well as working with law enforcement as required.

Challenges
Dangerous goods pose a risk throughout the supply chain—from manufacturers to carriers to distributor and ultimately the end user or customer. Strict adherence to regulations is paramount to ensure compliance and avoid fines, safety of employees and customers and maintaining an organization’s brand equity. The supply chain poses many challenges regarding dangerous goods both externally and internally. The most significant external obstacle, government regulation, impacts the supply chain from production, to transporting and storage. Regulations add complexity as they can vary by province and territory while governed federally under the Transportation of Dangerous Goods Act (TDG Act) and the Transportation of Dangerous Goods Regulations (TDG Regulations). The supply chain owner is responsible to ensure regulations are adhered to.

The TDG Act and TDG Regulations differ in their roles but work together to ensure the safe transportation of dangerous goods in Canada. According to Transport Canada: “the purpose of the TDG Act is to promote public safety during the import, handling, offering for transport and transport of dangerous goods. It sets out the general requirements that must be met and gives the government the power to:

  • write regulations that elaborate on those requirements
  • grant exemptions from requirements
  • designate federal inspectors to verify compliance through inspections, etc.

The TDG Regulations is where you will find specific details on how to ship and transport dangerous goods on your day to day operations.”

Additional regulations govern the safe storage of dangerous goods depending on product type. A good starting place is to refer to a hazardous good’s Material Safety Data Sheets (MSDS) that outlines general recommendations for storage, fire hazards, health hazards, reactivity hazards, first aid measures and preventative measures. The MSDS should be readily available (ie: attached to the container) and current.

For ease of accessibility it is recommended to have the MSDS available online as well for 24/7 availability, which is key when an organization’s operations span multiple time zones or in an emergency. Regulations are not static and may change to be more industry relevant, in which case it is vital that an organization keep abreast of them. Some requirements include ensuring proper labels or markings of the goods (contents, UN number, etc.) and the vehicle the goods are being transported in being marked with warnings, called hazmat placards.

Internally, organizations can faced resource constraints, such as a lack of talent knowledgeable in dangerous goods and budget limitations to implement technology for record-keeping or keeping updated on regulations or buy protective equipment. Secondly, organizations can be hindered by not having a clear definition of who owns dangerous goods compliance, compounded by a siloed company structure.

Best practices
Overcoming the challenges of handling and transporting dangerous goods can seem daunting given the risk and complexity. However, there are several resources available to help organizations such as connecting with specialized partners and carriers proficient in dangerous goods. The Transportation of Dangerous Goods Directorate (part of the Government of Canada’s Transportation of Dangerous Goods Program) maintains a list of organizations that offer dangerous goods training. Technology solutions can help to ensure a secure database for record-keeping of product attributions and regulation requirements. The key to successfully mastering dangerous goods within the supply chain rests with an organization’s culture. Organization must ingrain safety into their cultures and as part of their mission. This helps to ensure decisions, processes and infrastructure are there to support this organizational mandate.

Compliance
For some organizations, compliance can be seen as merely another cost of doing business. But compliance is much more than added cost. This could not be further from the truth, although there are important costs of non-compliance such as higher insurance rates, delays to shipments, remediation costs from errors or accidents during handling or transporting dangerous goods. But there are more benefits that outweigh these costs. An organization’s ability to comply with and exceed regulations places them at an advantage with faster deliveries; the ability to boast a wider product offering (especially key as a distributor); increased revenue as the higher compliance rate can be sold as added value to the customer as evidence of quality assurance and industry knowledge; as well as a competitive advantage if competitors cannot ship on time or complete deliveries due to noncompliance rework.

Mitigating risk within the supply chain is incumbent on following regulations and rules within each jurisdiction. Although government regulations will vary by province and territory while being governed at a federal level, it is the supply chain owners’ responsibility to ensure regulations are followed. Dangerous goods compliance is at the heart of the supply chain and is a critical aspect of a business’s success through solid internal controls and recordkeeping, employee training, use of safety equipment and accessories.