August 18, 2020: Warehousing Hazardous Materials Challenge – Part 1 of 4: Abandoned Freight

Warehouses are a vital part of the supply chain. Warehouses that store chemicals face a unique set of challenges that if properly managed, can make this segment of the industry an especially profitable one.
STARS is a consulting firm specializing in the transport, storage, distribution, and disposal of hazardous materials (“hazmat”). We assist those in the hazmat supply chain with regulatory compliance, risk management, training, safety, operational procedures, litigation, and more. Our clients include manufacturers, shippers, carriers, warehouses, and others. Our consulting services are highly customized to our clients’ needs, materials, and operations, meaning we never expect our clients to fit in to a predetermined idea of what we think they should be doing. Instead, we work with their existing culture and operational realities to help develop a plan to improve safety, increase profitability, and enhance compliance in a way that works best for them.
Through our interactions with the warehousing industry, our clients in diverse sectors, and large world-wide distributors, we learned that the storage segment of the supply chain is experiencing similar challenges across the spectrum. STARS is positioned to help this community solve their difficulties, be more profitable, and provide even better service to their customers. To determine how we could best serve this industry, we analyzed common challenges, unique concerns, and specific needs.
This is the first in a series of four short articles discussing our findings and offering some insights and solutions.

METHODOLOGY

The best way to understand the difficulties and common issues facing the warehousing industry, especially as it pertains to the chemicals business, is to go right to the source. We identified a wide range of warehouses across the US that store chemicals and interviewed their senior representatives. Among the interview questions were:

  1. How often do you experience delays with hazmat freight you cannot move due to regulatory non-compliance?
  2. How often do you experience delays with hazmat freight you cannot move due to damaged goods or packaging?
  3. What are the top four pain points regarding hazmat in your organization that keep you up at night?

The first two questions produced a wide range of answers, from rarely (1-2 times per year) to frequently (1 or more times per week). The final question, however, was the most enlightening. We were surprised by how consistent the answers were between completely unrelated companies from different locales – it seemed that this segment of the industry was sharing very similar problems, even when their businesses looked very different.

The top four concerns senior warehouse representatives experience universally involve:

  1. Abandoned Freight
  2. Hazardous Waste Compliance
  3. Training Issues, and
  4. Fire Hazards & Fire Codes

We will address each of these issues in a series of articles and we invite you to read them all.

Disclaimer: This paper is a sampling of observations, anecdotes, and information relayed to STARS by chemical warehouse representatives. If you have a different experience and are willing to be interviewed regarding your issues and concerns, please contact me.

KEY FINDINGS

When asked how often the interview subjects experienced delays with hazmat freight that could not be moved because it is either non-compliant with relevant regulations or the material and/or packaging was damaged, the answers varied widely. Some reported this to be a frequent problem, occurring more than once a week, while others stated it rarely happens, maybe once or twice a year.
Regardless of how often this takes place, one concern jumped right out when we discussed how these delays were resolved. Almost universally, facilities expected shippers to resolve any problems with the freight themselves, unless it is damage caused by warehouse personnel. Not all shippers respond to this request for resolution and some do not have the ability or expertise to properly advise the warehouse. Therefore, resolution can take quite a while and often results in abandoned freight.
When we discussed the possible reasons why the shipper may fail to address the problems with their freight, the speculation usually centered on a lack of knowledge about either the regulatory requirements for that particular situation or about the solutions available to solve the problem. This was especially true with internationally based shippers who may not fully understand the US regulations. Given the United States is the most restrictive country in the world with the most “state-specific” requirements (meaning country, not US State), that was not wholly unexpected.
Abandoned materials end up being stored at the warehouse for prolonged periods of time, subjecting the warehouse to the risk of exposure to their employees, package degradation, regulatory findings of non-compliance from EPA or OSHA, and more. Some abandoned freight had been sitting around in warehouses for more than ten years!
Even with proper instructions from the shipper, many warehouses are reluctant or unqualified to accept the responsibility and liability for disposing of, or otherwise resolving issues with, problem freight. Several executives expressed that when they do choose to accept the liability, their staff is not trained, and they do not have the expertise to properly handle the issues. As a result, the companies were subject to substantial risk and liability, as well as long delays in achieving resolution due to indecision and ignorance about how to deal with the problems.

Insights & Solutions

Abandoned Freight: Non-compliant or damaged hazmat freight is a difficult, expensive, and time-consuming problem with very real risks

When hazmat freight arrives in a condition preventing it from being sold – whether it does not comply with regulations or is damaged – it often ends up sitting for long periods of time because no one is willing or able to deal with it; in short, it is abandoned at the warehouse. Typically, shippers are asked to remedy the problems but often those requests go unanswered.
In the warehousing industry, employees are expected to take on numerous roles. With hazmat especially, those responsible for compliance often had other unrelated duties within the company first and were unexpectedly asked to take this on as well, usually with little to no experience or training. Even the employees with regulatory compliance as part of their job functions did not always have the time or ability to deal with the various issues they faced. In addition, smaller companies, those that are overseas, and those that are solely distributors may not have the expertise to fix compliance problems. With that knowledge, it is not surprising that requests from warehouses to fix problem freight often go unanswered.
The warehouses are typically reluctant to take responsibility for the abandoned freight because to do so assumes a substantial liability. In order to dispose of the chemicals properly, warehouse personnel must determine if it is hazardous waste. If it is, this makes the warehouse the generator of this waste, making them responsible for EPA administrative requirements (e.g. securing an EPA Identification number for the site, recordkeeping, and subsequent reporting requirements); managing the waste properly onsite while it is being stored before shipment; using a Uniform Hazardous Waste Manifest as a shipping document; finding an approved treatment, storage and disposal facility (“TSDF”) to receive the waste; and determining land disposal restriction information that must be supplied to the TSDF. In addition, since they are arranging for disposal, they will be liable under CERCLA in perpetuity should the waste ever contaminate the environment. It puts an enormous expense and logistical nightmare squarely in their lap.
What is the solution? Consider having a third-party provider available on a project or retainer basis to handle those abandoned, damaged, or non-compliant products on your behalf.
The third-party provider can determine whether they can be brought into compliance so they can be sold, or if they must be properly disposed of, then take the appropriate action. That provider should be able to address your typical problems:

  • Writing or translating safety data sheets (SDS),
  • Applying correct marks or labels,
  • Creating shipping papers,
  • Repacking damaged materials if it can be done safely, thus allowing them to be sold,
  • Preparing the package for hazardous waste disposal if it cannot be safely repacked and sold,
  • Helping you navigate the hazardous waste regulations,
  • Helping your shippers understand what is required to send safe, compliant packages to the US or Canada by whatever mode(s) of transport they are using to prevent recurrence,
  • Doing hazardous materials classification and determination,Sending the material for testing if necessary, and more.

When STARS provides these services to our clients, we can reduce the need for hazardous waste generation and increase profitability by making previously unsaleable freight viable again and freeing up space for revenue generation. STARS’ activities reduce the risks involved with long-forgotten freight degrading, thereby reducing exposures to employees and the public. Our involvement also alleviates the burden on the shipper to deal with these issues when they are hundreds or thousands of miles away, which is an added value to both your shippers and their customers.
Such an arrangement would help the warehouse ensure that those products do not linger in the facility, taking up valuable revenue-generating space while exposing the employees and surrounding community to substantial hazards. By ensuring you are compliant and making informed decisions every step of the way, you will reduce your exposure to unnecessary risk and liability.

Conclusion

The warehousing industry faces unique challenges because you handle materials you do not own. It is essential to create a plan of action for the times freight cannot be moved as expected in an expeditious manner. The warehouse owner/operator must take into consideration unique environmental, health and safety issues that may result from delayed or abandoned freight.

Since these issues are complex and can require adherence to regulations mandated by the EPA, DOT, OSHA, and local fire authorities, it may be prudent to secure the services of a third-party provider to assist your site with compliance. Your provider can help you:

  • Assess your operations and uncover potential areas of concern,
  • Develop a plan of action to avoid accidents, fines, and penalties,
  • Give you recommendations and tactics to provide value added services for your clients.

To find out how your warehouse can be more profitable, increase regulatory compliance, improve safety, and provide even better service to your customers, call STARS today at (844) 88-STARS or email us at Info@STARSHazMat.com for a free quote!