Shippers unhappy with new UPS hazmat contract

By Staff -- Logistics Management, 8/1/1998

United Parcel Service isn't going to take it anymore--not without a contract, at least. As of Sept. 1, the country's largest package carrier will not accept hazardous materials unless the shipper has signed a contract in which it agrees to meet all of UPS's requirements regarding training, regulatory compliance, packaging, documentation, liability, and more. (New customers have been required to sign the contract since April 1.)

Big Brown is making other changes in the way it handles hazmat shipments. In March, it stopped accepting Class 5 oxidizers for air shipment. UPS also will place new restrictions on most Class 1 explosives, Class 2 and Class 6 poisons, Class 4 combustibles, and Class 7 radioactives regardless of the mode of transport. Other changes affect packaging specifications, exceptions in packaging and markings, labeling requirements for certain hazard classes, and hazmat surcharges. Shippers also will be obligated to use software specified by UPS to prepare shipping documents and labels.

In a presentation to members of COSTHA, the Conference on Safe Transportation of Hazardous Articles, Robert D. Gordon, UPS's manager of corporate compliance, defended the changes. "The position we're taking is one that's safer for our customers, our employees, and the general public," he said. UPS has gradually been introducing these changes for the last two years, Gordon reported. In 1997, it opened a hazmat compliance center with a toll-free, 24-hour hotline that customers and UPS staff could call with questions regarding hazmat transportation. It also implemented some acceptance restrictions in October 1997 and March 1998, and sent customers letters, a new hazmat shipping guidebook, and sample contracts in February of this year. "We didn't want to blindside anybody," he said.

Many shippers have expressed concern over the new policies. The consensus appears to be that, although compliance will not be a significant problem for large, experienced shippers of hazardous materials, their compliance records are excellent and there's no need to impose further restrictions on them.

The real problem, the big shippers contend, are the small, inexperienced companies that don't comply with federal regulations. "Unfortunately, if some of these people get rejected [by UPS], then they're just going to put [their product] in an unmarked box and ship it undeclared with someone else," predicts Kris Van Valkinburg, global hazardous materials transportation specialist for Amway and president of COSTHA.

Will shippers sign the contract or take their business elsewhere? All of the shippers interviewed for this article said they were still reviewing the contract and that they would try to negotiate with UPS over some of the terms. "We've had a long relationship with UPS and being forced into signing a document or using a specific piece of software isn't going to end it. But the contract gives all the advantages to UPS and all the drawbacks to the shipper," says the compliance manager of a major personal-care products manufacturer, which currently is in rate negotiations with UPS and asked not to be named. "I believe in compliance 1,000 percent, but UPS is doing things differently than everyone else," he says.