A security move by railroads to temporarily halt the shipments of certain hazardous materials, particularly those that are poisonous by inhalation (PIH), has many companies in the chemical industry gearing up for transportation challenges. If the embargo that began Sunday, October 7, continues past Wednesday, October 10, some are predicting serious economic problems not only for the chemical industry, but for the nation as a whole.
The railroads instituted the embargo after the United States began bombing Afghanistan Sunday. The objective is to protect against terrorist attempts to retaliate.
"If this lasts 72 hours, we can live with it," said Tom King, Ashland Chemical Company vice-president for purchasing and logistics. "If it goes on for an extended period, it is going to shut down the economy."
Although the company's shipments were not immediately affected by the embargo, King said he anticipates a delayed impact to occur even in the short term.
At DuPont, Joe Resendes, North America Logistics Operations manager, said there has been a flurry of activity within the company to meet the situation. DuPont emphasizes strict inventory management, which does not allow for lengthy shipment interruption.
"When you have a disruption like this, it can be critical," he said.
According to Resendes, there have been some inconsistencies in how the various railroads are handling the situation. Some of railcars in transit before the ban were delivered to their destination while others were pulled off the main line and placed in a secured location.
There is concern that the rail ban could be expanded because of the threat of terrorism within the United States and continued US military assaults on Afghanistan. Even before the military assaults began, the railroads banned shipments of anhydrous ammonia.
"The whole industry is very nervous," said Dennis Ashworth, Chevron Phillips Chemical Company hazmat transportation center manager. He agrees that a 72-hour interruption can be handled without undue hardship.
Leslie Hatfield, a spokesman for Dow Chemical Company, said the impact on the company is viewed as a supply chain interruption. However, she noted that the company's crisis management team is planning operations without giving any time frame for an end to the embargo. Dow products involved cannot be shipped by truck, she added. Hatfield noted that railcars carrying Dow products are equipped with radio frequency tags that allow the vehicles to be tracked by the railroad company, and those that were not delivered to their destinations remain in a secure railroad location.
The decision to halt the PIH shipments was made solely by the railroad companies and not at the request of the federal government. The ban will be revisited on a daily basis, said Peggy Wilhide, vice-president of communications at the Association of American Railroads (AAR). The AAR is consulting with the National Security Council and the Department of Transportation on the situation.
Because of the security involved, Wilhide would not list the products that are being restricted. However, information from the National Industrial Transportation League indicates that the materials affected are Division 2.3 (poison gas); Division 6.1 PIL materials Zone A,B,C,D; and some explosives. The League also believes that materials in Division 2.1 (flammable gas) may be affected. Specific tanks used to transport the products include ton tanks (for chlorine), DOT51 tank containers, and MC330/331 and MC338 tank trailers.
The logistics situation is reminiscent of a rail meltdown that occurred from 1997-2000 in the Gulf Coast area. At that time, tank truck carriers were called on to fill the gap. Today, tank truck carriers are again receiving queries from shippers looking for alternatives to rail.
"If we have any products that can be trucked (rather than via rail), we are looking at that possibility," says Resendes.
A chemical distributor with a truck fleet said his company purchased quantities of a PIH product and placed it in storage soon after the attacks on New York and Washington occurred, anticipating security measures would be applied.