Issue link: http://read.dmtmag.com/i/86182
Regulations Case of the Missing Sticker BY KIM PHELAN Maybe a private detective could unravel the mystery of the shipping debacle experienced by Clyde- West, but at the end of the day, the Federal Aviation Administration penalty has been meted out, and some details surrounding the discovered violation will probably never be brought to light. Today, as a result of AED's legal counsel and a compromise negotiated with the FAA on behalf of the dealer, a painful $47,250 fine was reduced by half; and, weary from the ordeal, Clyde-West President Pat McConnell is ready to move on. As for Jason Kopacz, the shipping manager for the dealership's Portland, Ore., branch who prepared the customer's order for shipment to Hawaii, frustration is felt all the more acutely because he's certain he placed an ORM-D label on the package containing paint, and the fact that it's missing in the photographs of the box is extremely vexing for a guy who's been doing shipping and receiving for 25 years, and nine years at Clyde-West. He's also dismayed that the package went by UPS "Air" when he clearly selected "Ground" as the mode of transportation, assuming ocean vessel not airplane would take the boxes he sent over the Pacific. It was UPS that made the switch, unbeknownst to Kopacz. His theory is that the paint package made the air travel without incident, but was likely damaged in the UPS truck in Hawaii, en route to the customer. It was that damage that set the wheel of misfortune spinning. When the damaged, paint-tainted package arrived to the customer, it was refused (as was the broken windshield that was also being delivered). Now that the hazmat contents were revealed and the ORM-D sticker conspicuously missing, the investigation and reporting protocols ensued – and Clyde-West became the low-hanging fruit for an easy, virtually indisputable federal regulatory citation and fine. At what point the ORM-D label was separated from its box is anyone's guess. With singed fingers from the incident, the dealership has indefinitely suspended shipping of paint and other hazmat material, a blow both on its customer service and revenue. It's tough to identify a "lesson" as a result of the whole affair, since Kopacz is convinced he played by the rules by correctly labeling the shipment and selecting a credible option of "Ground," on the UPS computer menu. Nevertheless, he offers a caution for other dealer parts departments. "Double check everything," he said. "Cross all your t's, dot all your i's; make two phone calls if you have to. If it's going to mean that the shipment's going to be a day late because you've got to check on something, then that's just the way it's got to be – no rushing anything out because the salesman is in a hurry or the customer's in a hurry. Just take your time and make sure it's done right." 42 | www.cedmag.com | Construction Equipment Distribution | October 2012 McConnell Patrick ("Hazmat Heartburn and How to Avoid It" continued from page 41) hired outside regulatory counsel with experience in these cases and several months later reached a settlement agree- ment with the government. Our lawyer referred to undeclared hazmat enforcement cases as "shooting fish in a barrel." The government need only prove that the company committed a "knowing" viola- tion. No need to prove that a company intended to violate the rules (although intent could be grounds for criminal prosecution). For civil penalty cases, the enforcing agency need only establish that you knew what you shipped. We all learned in Civics 101 that "ignorance of the law is no excuse" and that is certainly true when it comes to the HMR. We offered mitigating evidence during the informal resolution process and the FAA was flexible but only to a point. The final result was still painful. The government doesn't mess around with these cases. The law provides maximum civil penalties of $50,000 for most HMR violations and virtually all undeclared shipments involve many alleged violations. To put this in perspective, the maxi- mum civil penalty for a non-hazmat, aviation safety violation is $25,000. So, while we are very disappointed that the FAA hit our small company pretty hard, it was nowhere near the maximum that could have been imposed. The government is not looking to put anyone out of business by bringing these cases, but it does want to send a clear message. The best advice I can provide is to avoid a similar mistake – so make a list of all materials that you ship that may be consid- ered hazmat. Then consult the Hazmat Table and, if the item is listed, do not prepare or offer it for shipment unless you are certain that you are in compliance with 49 CFR. When we evaluated our situation we determined that we would not ship hazmat, period. Instead, we will require customers to pick up paint or similar material at our centers and if that isn't feasible (as with our customer in Hawaii) we will facilitate a direct shipment from the manufacturer. You may reach a different conclusion but, if you do, be sure that all your hazmat employees have received docu- mented training and that you comply with the specific requirements associated with each different material and specific shipping methods. n PATRICK MCCONNELL is president of Clyde-West, Inc., the Volvo dealership based in Portland, Ore. MARSHALL FILLER, a managing member at the law firm of Obadal, Filler, MacLeod & Klein, PLC in Alexandria, Virginia and expert in federal hazmat issues, assisted in the preparation of this article. If you have questions about hazmat issues, Marshall can be reached at marshall.filler@potomac-law.com.