Innovation and the Role of TMS for Dangerous Goods
By: Frank McGuigan, CEO, Transplace
Recently, I had the opportunity to speak at Labelmaster’s Dangerous Goods Symposium, a forum to share the latest in dangerous goods regulatory updates, innovation, training best practices and practical solutions to keep companies up-to-date on the latest hazmat shipping regulations.
During my presentation, I discussed innovation and the role of Transportation Management Systems (TMS) in the dangerous goods supply chain, sharing both the challenges and opportunities within the industry while highlighting the technologies available to help shippers manage these goods safely and efficiently.
Key Challenges for Chemical and Hazmat Companies
All shippers strive to keep costs under control while running a smooth, efficient and time-sensitive supply chain in order to successfully fulfill orders and satisfy customers. However, for chemical and hazmat companies, this challenge is compounded by the need to comply with a myriad of domestic and international regulations and exacerbated by unique equipment configuration requirements.
Chemical manufacturing depends on raw materials that are subject to environmental, political and economic influences. The chemical industry also recognizes that they can be a target for terrorist attacks, which could potentially cause a significant disruption in production and transportation, adding yet another layer of complexity to the shipping equation. Additionally, weather events have the ability to disrupt the supply chain at any time, and unanticipated regional raw material volatility can affect production costs for many companies.
These challenges make it all the more important for those shipping dangerous goods to place added focus on their supply chain and transportation strategies. And as the primary agents responsible for cradle-to-grave ownership of their products, manufacturers and processors need to ensure that regulations are precisely followed—not just within their own operations—but also by the transportation carriers they select to move their product. This critical component can be a time-consuming process and a challenging proposition once the order has left the custody of the producer’s plant, but the right transportation management solution can help.
Why Transportation Management for Dangerous Goods is Essential
Those in the dangerous goods industry need a value-based, efficient and cost-saving solution that helps them control their transportation network and provides them with the tools to do their job more effectively. A TMS can help automate the entire supply chain process, as well as help with mode and route selection, providing added efficiency and cost savings while optimizing operations.
There are four key areas where transportation management is essential for the transportation of dangerous goods:
- Visibility: Knowing where a dangerous goods shipment is once or twice a day isn’t enough; shippers must have this information in near real-time. And there has been a tremendous amount of focus in recent years on real-time visibility throughout the transportation industry; in fact, we recently announced that we will be including it as a standard feature of our proprietary TMS offering.
Real-time visibility allows for exception management, up-to-date notifications and proactive communication to all parties and stakeholders involved. It also plays an important role in traceability—for example, if there is a risk of cross-contamination with a shipment, the ability to track any freight that may have come into contact is critically important.
- Securing Access to Capacity: Hazmat shippers need consistent, reliable capacity that meets all regulatory and safety requirements. A modern TMS addresses the unique needs of dangerous goods shippers and can help them solidify long-term, reliable access to capacity.
Aligning dangerous goods shipments with the right carrier is critical. A TMS can help automate the ability to find carriers that meet very specific requirements, while securing multiple sources and alternatives for capacity through access to a large, dedicated network of carriers. Additionally, it allows for the continuous, consistent evaluation of carrier performance for ongoing optimization.
- Optimizing Delivery: When it comes to shipping dangerous goods, the right tools are critical for delivery optimization. Optimization can take on multiple dimensions, such as consolidating compatible dangerous goods of the same or different classes, or linking loads across a network to reduce the frequency of empty backhauls.
It is critically important to identify infeasible matches (such as shipping baking flour directly after a truck has delivered weed killer) and accounting for any incompatible links.
- Mitigating Disruptions: Proactive disruption planning is key for dangerous goods shippers. Predictive analytics can provide the proactive planning needed to lessen the impact of unexpected events and mitigate risk. While every risk can’t be avoided, there are many steps that can be taken through conceptual, data-driven supply chain planning to make a concerted effort.
By combining historical data with forward-thinking models, shippers can identify risk and mitigate it wherever possible. Once a shipment is en route, predictive tools coupled with the right execution allow for the opportunity to change course when necessary. Multiple modes, lanes, carriers and equipment can be modeled simultaneously, and risk scores can be used to access weather patterns or other disruptions and to predict delays through dynamic ETAs.
What challenges are you currently seeing in the chemical and hazmat industry?