Risk Management Software Developed To Improve Tank Truck Carrier Safety

Electronic databases designed for the tank truck industry can help carriers and emergency crews improve safety performance, said speakers at the National Tank Truck Carriers safety council seminar April 8-9 in Nashville, Tennessee.

New computer software that compares the risks of transporting hazardous materials over alternative routes is a valuable tool for companies with transportation risk management programs (TRM), said Mark Abkowitz, Abkowitz & Associates, Nashville, Tennessee. In his session on "The Mechanics of Risk Management in Transportation," Abkowitz discussed how companies can develop or improve TRM.

TRM objectives include: providing education for company employees and others involved in the safe transportation of hazardous materials; promoting awareness of company transportation risk management policies and procedures; and motivating systematic implementation of risk management practices throughout the company transportation activity chain.

To determine the scope of its TRM program, a company should identify the internal and external "stakeholders." These are people representing various company departments and outside businesses that have a stake in the transportation process, Abkowitz said. Internal stakeholders include company personnel who work in the production, purchasing, distribution, logistics, product safety, customer accounts, insurance, and shipping/receiving. External stakeholders include suppliers, outside manufacturers, carriers, warehouse and bulk terminal companies, international freight forwarders, brokers, and customers.

"Ultimately, the goal is to document the process so it is available for the people who need it," he said. "But implementation is critical. Otherwise, the document gathers dust on shelves."

One of the first steps in developing a TRM process is to state the purpose and scope of the program. The stated purpose of one company's program was to identify the risk of acute events, develop risk management strategies, and continue to improve safety performance related to the transportation of the company's products.

In the context of that program, transportation means any movement, including through distributors, outside manufacturers, warehouse companies, and customers who pick up products, Abkowitz said.

"It's important to recognize that a company's TRM decisions, policies, and procedures are not established by just the distribution or logistics people," Abkowitz said. "We've been involved in many situations where environmental health and safety workers, insurance people, and legal department employees have had very important points to contribute."

Companies exercise three levels of control over internal and external stakeholders involved in risk management programs. For internal control, companies incorporate TRM policies and procedures into corporate policy applied to company personnel. Contracts incorporating TRM procedures are established with external stakeholders. Companies also may provide guidance to outside vendors not bound by legal agreements.

Abkowitz listed some of the many activities that fit under the TRM umbrella: training requirements; shipping documentation; packaging/re-packaging; marking, labeling, and placarding; product handling; risk characterization; carrier selection; mode, route, and emergency response assessment; incident management; insurance; and facility audit requirements.

Two key risk management activities that represent new ground for the tank truck industry are risk characterization and mode, route, and emergency response assessment. Risk characterization involves examining all the different products a company handles, prioritizing those products that present high hazards and risks, and assigning more stringent risk management controls to the high-risk products.

"The process of figuring out which products fall into which categories and what action should be taken is relatively new ground for the industry," Abkowitz said.

Another relatively new activity derives from risk characterization. "When companies determine which shipments are high-hazard, they start asking questions: Should we be using different routes? Is our emergency response capability adequate? In the case of shippers looking at carriers, there's even the question of mode," he said.

Risk-assessment software is a time-saving tool that helps manufacturers and carriers transport hazardous materials safely in a dynamic industry, Abkowitz said. "We have thousands of products moving in thousands of different places," he said. "Companies can't afford the time and resources to do the independent studies for every single movement, and determine whether the risks are appropriate. So we've developed some novel ways to get through the practical side of this."

Software is available to allow companies to take all the different materials that they transport and apply a hazard ranking according to indexes of the Department of Transportation and National Food Processors Association. These two ratings are compared to the environmental index to determine an overall material index.

"This is something you can pre-process, so you have the list ahead of time," Abkowitz said. "When a customer wants you to move a particular product, you can look up the product and have a classification ahead of time. If it's a new product, you can have access to the information that allows you to classify it the first time you come across it."

The pre-processed hazard ratings allow companies to place the various products they handle into categories characterizing the products as "very high risk," "high risk," "medium risk," or "low risk." Companies can have different action plans to handle each category of products appropriately. For example, chlorine, which is poisonous by inhalation, is likely to be rated through this process as "very high risk."

Abkowitz presented a chart showing a set of action plans that his company helped develop. The chart listed five actions that carriers could take in preparation for transporting materials rated in the four risk categories.

According to the chart, carriers preparing to haul materials ranked as "very high risk" would take all five actions: route selection, analysis of prior incidents, emergency response capability assessment, review of local access/egress considerations, and evaluation of alternative mode and packaging options.

The chart indicates that fewer actions might be taken by carriers preparing to transport materials rated as lower risks. For instance, carriers preparing to transport "medium risk" products might analyze prior incidents and review local access/egress considerations.

"When we have a high-risk material, we drop the routing and emergency response assessments," Abkowitz said. "We focus more on prior incidents, access/egress, and packaging concerns. For low-risk products, we focus on analysis of prior incidents. This cascading effect is designed to put most of your attention on the highest risk products." Eventually, the policies and procedures of a company's TRM plan should be compiled in a three-ring binder and be made available to company management. But some companies want to limit the number of TRM manuals in hard copy. Instead, the TRM information is put on the in-house computer system.

Abkowitz & Associates developed two software products - HazTrans and RiskMap - to serve as environmental risk management and geographic information tools for the tank truck industry.

HazTrans is routing software designed to help manufacturers and carriers determine alternative routes to transport high-risk materials safely. HazTrans allows companies to plot origins and destinations for hazardous materials shipments. Map representations cover the entire United States, plus some areas of Mexico and Canada.

"This tool immediately identifies alternative ways to move a product, and relates them to the way a company is moving the product now," Abkowitz said. "It compares the existing route to alternative routes according to distances, travel times, accident likelihood, population exposure, and environmental exposure."

RiskMap identifies the potential impact of a hazardous material release by providing population data for areas along transportation routes. Residential and "daytime" populations (for commercial areas) are included. Also identified are specific landmarks, including hospitals, nursing homes, and schools.

"RiskMap population data is designed to show the number of people impacted if there's a release of hazardous materials," Abkowitz said. "It also identifies where the resources are to help you in the event of an emergency."

Emergency resources include police and fire stations, ambulance companies, and food suppliers. RiskMap brings together sophisticated technologies by combining mapping capabilities with data from electronic phone directories.

Another software tool designed for transportation safety was discussed by Dan Collins, president of Operation Respond Institute Inc, Washington DC. Collins presented "Operation Respond and the Tank Truck Industry."

Operation Respond is a safety program that links carriers of hazardous materials withemergency responders such as police and fire departments. Most carrier participants in Operation Respond are railways. More truck carriers are encouraged to join the program, Collins said.

The program started in 1992 as a cooperative undertaking of the Federal Railroad Administration and the Port Terminal Railroad of Houston, Texas. It resulted from a National Academy of Sciences study that recommended using carrier databases to provide critical information to first responders. In 1995, Operation Respond became a not-for-profit institute.

OREIS, the Operation Respond Emergency Information System, is software developed by Operation Respond to connect police and fire departments with databases of railroad and truck carriers. In the event of a hazardous materials incident, the emergency responders can quickly verify the contents of a tank car or trailer. This allows emergency workers to respond to the incident safely, appropriately, and efficiently.

The system has subscribing responders in 29 states, plus areas of Canada and Mexico.

To join Operation Respond, truck carriers do the programming needed to link to the OREIS system. It takes approximately 50 to 100 hours to do the programming needed to get carriers on line for OREIS, Collins said. The program benefits trucking companies by helping expedite response to hazardous materials incidents involving their equipment.

"We work with existing data in a carrier's database," he said. "Data security is of the utmost importance. Access is strictly limited to emergency response organizations. The system will be activated only in two instances - when an incident occurs or when an emergency responder holds a drill to test the system."

Besides computer software, other management tools are available for companies in the tank truck industry to improve their safety programs. Quality improvement methods based on the teachings of W Edwards Deming, a quality management guru who worked in Japan after World War II, were discussed in a session entitled "Quality Tools as Applied to Risk Management in the Tank Truck Industry."

"I was fortunate to have studied with Dr Deming," said Jeffrey Barber, senior vice-president of the systems improvement group of Ruan Transportation Management Systems.

Barber discussed two problems that hinder businesses from developing improved products or services: the inability to connect true cause to true effect, and the inability to think systematically.

"We give assignable cause the wrong effect. After we change it, we wonder why the output didn't change," Barber said.

Using a new management approach called management by method helps companies determine what business processes must be changed to reach desired goals, Barber said. Management by method requires companies to consider all their activities as part of one big system. Thus, the various departments of a company are viewed as a whole, working toward the same goal. They are not seen as separate, competing profit centers.

Contrasted to management by method is the current generation of management style used by many companies today: management by results. Company managers set targets or goals for their employees and promise rewards if the goals are met or exceeded. If they aren't, the employees are penalized. This is really management by fear, Barber said. The focus is on attaining goals rather than looking at the system to see how it can be improved.

A basic element in management by method is appreciation for the system, Barber said.

"As transportation risk managers, you want to find out what's happening in the system in the risk area," he said. "How do you look at it? How do you find the root cause of problems? How do you improve the process or method so it doesn't have an output that's negative?"

The output of any business system is the last stage of the system, he noted. Outputs include distribution of products and profits resulting from the sales. But first, companies must produce products or services with inputs from people and raw materials. The middle stage is adding value to them.

"Your company must do the research to determine what is the important measure in your customers' businesses," Barber said. "This will help ensure that your company performs at levels that meet customer needs," Barber asked. "If you can determine that, you can design new processes or redesign existing ones, and then continually improve them."

All input processes must be examined, he said. They have five elements: people, machines, methods, material, and environment. All five contribute to the processes that make up the system.

"If we are going to improve the big system, we have to improve the processes," Barber said. "If we're going to improve the processes, we have to find the root cause of problems. This is hard to do. We always want to give assignable cause to people. We rarely look at machines, methods, and the other elements."

Deming taught that statistical process control (SPC) measures are important in determining root causes of business problems, Barber said.

Using SPC, a business carefully examines the costs of input processes. For instance, these costs can be tracked over a 24-month period, and then plotted on a bell curve.

"We've been taught to manage by averages only," Barber said. "But manufacturers making better products know something different-that the average cost is only the center of the system.

"Let's look at 24 months of a company's safety costs and put it in a histogram. On average, the monthly costs may be $50,000 for my company. I've got to get that down.

But if you have an average, you also have variations in the monthly costs. The real secret is determining the amount of variation in the system. In this company's system, it could be $100,000 some months, and $10,000 other months."

The next task is to determine specific costs in a safety or risk management program. This involves finding the "vital few" cost areas - worker compensation, liability, property damage, and cargo. "Worker compensation might be the biggest cost area," Barber said.

"So we focus on that area - by location, job application, and body part. Where do we have a problem? We follow the data to find the problem, then work on solutions.

"Let's try statistical process control to find out where the system is burning, so we're not in the kitchen squirting the stove, when the fire is burning in the bathroom."

Fleet safety managers may find themselves at odds with upper management over improving the quality of safety programs if the primary focus of the company is on productivity, said Brian Libby, safety specialist for Exxon Company USA.

Safety managers should take heed when upper management responds to their concerns over minor accident procedures by saying, " 'Don't worry about it. That's the way we've always done it,' " Libby said.

That's what happened to Libby when he was reassigned to the New Jersey company terminal in the early 1980s. Because of a company focus on productivity, drivers completed their runs as quickly as possible, he said. Experienced drivers in particular became inattentive behind the wheel and were causing a rash of accidents.

Eventually, Libby convinced a senior manager to change safety procedures. Drivers needed to become involved in completing eight-page reports after they caused minor "incidents" such as slashed tires or broken mirrors. After the change was approved, drivers involved in minor accidents were required to spend a day filling out reports and viewing safety videos.

The new procedure resulted in a reduction of minor accidents from about 48 to 3 per 3.7 million miles, he said.

Libby also established monthly driver safety meetings to reevaluate safety procedures. "Productivity is important, but our focus is broader," he said. "We ask how we can do the job safer, better, and more productively. And guess what? Our drivers in the Linden facility alone increased their productivity from an average of 3.3 to 4.8 loads per shift."

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