Moore on Pricing: The regulatory squeeze is on

Over the past decade we’ve seen a major trend in regards to safety regulations for freight transport within the United States as well as for import and export shippers—that trend is the “international­ization” of rules and regulations.

By ·

Over the past decade we’ve seen a major trend in regards to safety regulations for freight transport within the United States as well as for import and export shippers—that trend is the “international­ization” of rules and regulations.

While our own government has been proactive in adding new safety rules, shippers need to be aware of what’s going on in Europe and elsewhere that may lead to more delays and higher costs here at home. There’s little doubt that shippers now need to refresh operational procedures to cover a broader set of rules.

The Safety of Life at Sea (SOLAS) weighing requirement, published by the International Maritime Organization (IMO), went into effect in July. The most important language for shippers to note is: “Shippers, freight forwarders, vessel operators, and terminal operators will all need to establish policies and procedures to ensure the implementation of this regulatory change.”

That means: Write it down. Many operations people I’ve visited with have simply started doing the weight verification, which is fine. But has it been made a company policy? Can you show a court or regulatory agency after an incident that you have a written procedure for compliance?

U.S. Hazmat shippers are aware of the U.S. Department of Transportation (DOT) require­ments for labeling, placarding and declarations of hazardous goods. Those persons shipping interna­tionally are also aware that the U.S. regulations were modified to be complimentary to the UN recognized “dangerous goods” regulations.

These are expressed as IMO dangerous goods (for maritime) or IATA dangerous goods (for air). Training in these regulations due to their subtle differences is a must for shippers in these modes to reduce the risk of liability in an incident.

Like the SOLAS rules, those responsible for dangerous goods regulation and enforcement are increasingly looking at the shipper’s role in inci­dents. Earlier in this century, the DOT created a new class of regulated persons called “hazmat employees.”

Shippers found that their employees were now subject to the same regulations as carri­ers—somewhat more in line with the European mode of corporate and employee responsibil­ity. Carriers then said: “Welcome to our world.” Shippers now need to check training policies and documentation to reduce risks of being seen as non-compliant.

Launched immediately after 9/11, the “Customs-Trade Partnership Against Terrorism” (CTPAT) is a voluntary supply chain security program led by U.S. Customs and Border Protec­tion and “focused on improving the security of private companies’ supply chains with respect to terrorism,” according to U.S. Homeland Security.

The program immediately became internation­al, with complimentary programs being developed by many of our trading partners. Fifteen years later, shippers and receivers of international cargo representing the vast majority of all goods into and through the U.S. are now members.

Is this an international regulation? Well, many say it might as well be. For shippers wanting to reduce legal liability after an incident, member­ship demonstrates a professional level of compli­ance with best practices.

These developments mark a change in the game for many shippers who focus mainly on domestic moves, but manage a small percentage of international trade. It’s important for shippers to remember that they can’t outsource regulatory responsibility as a “shipper of record.” This is now a part of their business, and domestic safety agencies are following the global lead of other countries in making sure the shipper is paying attention at all times.


About the Author

Peter Moore
Peter Moore is Adjunct Professor of Supply Chain at Georgia College EMBA Program, Program Faculty at the Center for Executive Education at the University of Tennessee, and Adjunct Professor at the University of South Carolina Beaufort. Peter writes from his home in Hilton Head Island, S.C., and can be reached at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

DOT · Pricing · SOLAS · All Topics
Latest Whitepaper
The Essential Guide to High Value, Low TCO WMS on the Fast Track
A warehouse could become your weakest link if you can’t execute with speed and accuracy. Your bottom line will be negatively impacted, so will your customer’s experience, and they are only one click away from buying from your competitors!
Download Today!
From the November 2017 Logistics Management Magazine Issue
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships into true, collaborative partnerships—and greatly strengthened its logistics and supply chain operations in the process.
34th Annual Quest for Quality Awards: 2017 Awards Dinner
Trucking Regulations: Washington U-Turns; States put hammer down
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Logistics Showcase: Rising to the same-day delivery challenge
Today’s delivery puzzles are very different than traditional DC to store or warehouse to DC puzzles. It’s not just the shorter time frame for delivery; the basic requirements are significantly different and more complex as well. In this session you'll learn how to address same day delivery challenges while also driving down costs and increasing customer satisfaction.
Register Today!
EDITORS' PICKS
2017 NASSTRAC Shipper of the Year: Mallinckrodt; Mastering and managing complexity
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships...
2017 Alliance Awards: Recognizing outstanding supply chain partnerships
In an era where effective supply chain collaboration is both highly valued and elusive, Logistics...

26th Annual Study of Logistics and Transportation Trends: Transportation at Digital Speed
While a majority of companies strongly agree that transportation is a strategically important...
34th Annual Quest for Quality Awards: Winners Revealed
Which carriers, third-party logistics providers, and North American ports have crossed the service...