The Global Outlook for Dangerous Goods: Challenging & Underfunded

Friday, September 14, 2018

Maintaining a smooth supply chain is critical in today’s highly competitive market. Yet despite the importance (and overall impact) of compliance on the supply chain, dangerous goods (DG) professionals find it increasingly challenging to do their jobs effectively and efficiently. This was evident in the 2018 Global Dangerous Goods Confidence Outlook, conducted by Labelmaster, IATA and Hazardous Cargo Bulletin to gain insights into how organizations around the world approach DG shipping and handling, and the challenges they face.

Compliance Challenges Are Real

It’s no secret that growing volumes and types of DG, along with more extensive and complex regulations, have made moving DG in a safe, secure and compliant manner increasingly difficult. In fact:

  • 51% find it challenging to keep up with the latest regulations.
  • 15% were NOT confident that they can ensure DG regulatory compliance across their entire organization, and 13% were unsure.
  • 58% feel that even if they follow the regulations perfectly there is a chance their shipments will be stopped.

When asked to rank their greatest challenge to compliance:

Unfortunately, those responsible for DG face an uphill battle – not only in meeting evolving regulations, but also in overcoming inadequate infrastructure and training.

Compliance Technology and Training is Often Inadequate

Being able to stay up-to-date on the latest regulations and then abide by them requires the proper training, infrastructure and processes. While most DG pros believe their companies are able to stay abreast of the latest regulations and prepare employees appropriately, there is still a significant population where improvement is needed.

One key area that needs enhancement – technology. There is no denying that technology is critical to the supply chain and significantly improves efficiency, speed and accuracy. And even with a number of technology resources available, more than one-quarter of DG professionals are still doing everything manually.

Reliance on manual processes is time-consuming, significantly increases the chances of human error and makes it harder to maintain consistency across an organization. These areas and much more can be improved using technology. But just because a company uses some sort of technology for compliance, doesn’t mean they have the infrastructure they really need. This was evident in the survey responses, as 15% believe their company’s infrastructure ability to quickly adapt to regulatory and supply chain changes is “lagging behind the industry,” 65% said it is “current, but need updating” and 21% believe it is “advanced – ahead of the industry.”

Furthermore, the need for improvement extends to training as well. One-quarter of respondents feel their company’s training does NOT adequately prepare people within the organization to comply with DG shipping regulations. In many cases, the scope of those being trained needs to be expanded. In fact, 67% of respondents believe DG training should be extended to other departments across their company.

Organizational Attitude Impacts its Investment

Acquiring the necessary technology and training requires financial support, and an organization’s attitude towards DG compliance has a direct impact on how much it invests in resources. Unfortunately, this attitude towards compliance often does not reflect its true value. According to the survey:

  • 16% indicated that DG compliance is not a major priority for their company.
  • 54% wish their companies would understand that supply chain and DG shipping management could be a differentiator.
  • 28% believe their company complies “only because regulations mandate it, and adhere to minimum requirements,” while 48% believe their company “goes beyond the requirements,” and 23% view compliance as a “competitive advantage.”

Companies that view compliance as a “competitive advantage” were more likely to use DG-specific technology, feel they have the technological support that quickly adapts to regulatory and supply chain changes, and have higher confidence in overall operations. While those that “adhere to minimum requirements” were more likely to be challenged by ineffective training and a lack of awareness on the part of company leadership, and were much less confident in their ability to ensure compliance across their organization.

DG Professionals Desire Additional Support

Investment in infrastructure and training is critical to enabling DG professionals to do their jobs effectively and efficiently, yet 27% think their company’s investment to support DG compliance is “not adequate to meet current needs.” And whether their budgets have increased, decreased or stayed the same, DG professionals desire additional support. When asked how they would prioritize financial support from their organization:

  • More effective training: 42%
  • Technology for better supply chain efficiency and compliance: 29%
  • Wider access to the latest regulatory resources and manuals: 18%
  • Additional headcount: 12%

Unfortunately, obtaining the budget and resources to fuel these areas is not easy – and most likely requires buy-in from executive leadership. But how do you get that buy-in? It starts with changing the conversation around DG management.

Changing the Conversation with Senior Leadership

Changing the conversation means reframing the overall view of DG management within an organization. This begins with DG professionals quantitatively demonstrating how their compliance program can reduce costs and increase revenue to make a positive contribution to the company’s bottom line. Simply put, it is defining your company’s “total value of compliance.”

The total value of compliance takes into account three factors relevant to any business engaged in DG transport:

  • The costs of maintaining compliance throughout your supply chain, such as expenses for people, processes, compliance products, supportive software and technology, reporting, training and management
  • The costs of non-compliance due to errors and lapses such as civil penalties, carrier refusal and delays, fines, remediation and higher insurance costs
  • The opportunities of higher-level compliance-enabling differentiation, revenue growth and faster cash flows, such as implementing new products that are aligned with regulatory standards from day one, faster product delivery to customers, increased brand equity, and the ability to offer emerging or popular products that others may not

Solutions to Support DG Compliance

The total value framework helps DG companies make compliance a powerful, revenue-positive aspect of their business, and provides a real business case for adequately investing resources to support compliance. Company buy-in enables DG pros to invest in solutions that will provide a meaning impact, such as:

  • Technology to increase compliance, save time and ship faster – With the dozens of tasks required to put a DG item into transport, significant inefficiencies, errors and delays can likely be found across each supply chain partner. Look for technology solutions that help streamline these efforts, provide instant, accurate and compliant DG shipping documentation, and validates shipments against the latest regulations.
  • DG training that adds real business value – Survey responses spotlighted the fact that for many companies training is the single (and only) resource available to build and maintain compliance. This puts a tremendous amount of pressure on the training to be effective. To make your training efforts payoff: use a training resource that has DG expertise; make sure your content is up-to-date; integrate your company’s unique policies, products and suppliers into the training, and establish objective, quantitative metrics that show cost savings or revenue generation.

DG pros recognize the value in resources, technology and training that support compliance, but still aren’t getting the support they need. Compliance will only become more challenging, so it is critical for them to redefine how their organizations view compliance in order to get the support and investment they need.

To learn more about the total value of compliance, download a TVC technical brief, and schedule a free assessment, visit our Total Value of Compliance page.

To read the full report, visit DG Confidence Outlook.