June 24, 2002

Dr. Robert McGuire
Associate Administrator for Hazardous Materials Safety
Dockets Management System
U.S. Department of Transportation
Room PL 401
400 Seventh St., SW
Washington, DC 20590-0001

Re: DOT Docket No. RSPA-02-12064 (HM-232); "Hazardous Materials: Security Requirements for Offerors and Transporters of Hazardous Materials" (Notice of proposed rulemaking published May 2, 2002)

Dear Dr. McGuire:

The Dangerous Goods Advisory Council (DGAC) is an international, non-profit, educational organization devoted to promoting safety in the domestic and international transportation and handling of hazardous materials (HAZMAT), substances and wastes. DGAC represents shippers, carriers of all modes, container manufacturers and reconditioners, emergency response and waste clean-up companies, and a variety of other companies and trade associations involved in the field of HAZMAT transportation.

DGAC recognizes the Research and Special Programs Administration's (RSPA) desire to initiate actions that will increase the security of HAZMAT in transportation. And while we support any initiative that will, in fact, improve transportation security, DGAC is compelled to offer the following comments in response to the proposals published under HM-232 on May 2, 2002:

1. Registration.

   The current registration process does not include verification that a registrant is a legitimate HAZMAT shipper or carrier. Without this step in the process, anyone can apply for and receive a HAZMAT registration. Therefore, any attempt to use the existing process to enhance security measures will be ineffective. RSPA should first determine the lawful existence of registrants. Additionally, enforcement personnel do not have real-time access to the HAZMAT Registration Certificate database. Without this access, it is impossible to verify the authenticity of a HAZMAT registration certificate at the time of an inspection.

   In addition to our major concern, we have the following comments about registration:

   • DGAC recommends that if RSPA requires the HAZMAT registration number to appear on the transport document, a unique number be assigned to a company as long as it remains registered. This approach will facilitate programming this information into computerized transportation management systems.
      
   • Configuring computer systems to provide new data on shipping documents will cause significant problems for shippers, carriers, freight forwarders, brokers, agents, and others. Available display fields are limited and companies will need to redirect their limited Information Technology (IT) resources to reprogram their information management systems. Several months advanced scheduling is needed to implement changes (e.g., changes to programming must be scheduled several months in advance of the change becoming effective). System change processes needed involve the following steps: evaluate, analyze, execute, test, and implement. Each of these steps takes time. The costs associated with making these changes will be substantial. The changes will involve IT programmers, IT supervisors, business managers, HAZMAT specialists, and, possibly, outside consultants. A conservative estimate of the costs for the largest 6000 registrants (15% of the 40,000 current registrants) to make changes to their shipping documents will conservatively be $144,000,000 (based on an average hourly rate of $100/hour for 240 hours per registrant). The cost for the remaining 85% of the smaller registrants to reprogram their data management systems is estimated to be $272,000,000 (based on an average hourly rate of $100/hour for 80 hours and 34,000 registrants). As a specific example, a DGAC member that is a large automobile manufacturer estimates that the costs for adding the HAZMAT registration number to its shipping documents will be between $350,000 and $400,000 (excluding system changes needed for foreign subsidiaries).
      
   • In many of the instances involving multi-carrier, multi-modal shipments (domestic or international), more than one entity would be involved in conducting offeror functions subject to the HAZMAT regulations. In such cases it will be necessary to include more than one registration number on the shipping document. It is unclear from the proposed rulemaking if it is RSPA's intent to include multiple registration numbers on shipping documents. If data management systems are to include multiple registration numbers, then the conservative cost estimates listed above, will be substantially higher.
      
   • The Electronic Data Interchange (EDI) format has to be modified to accommodate the addition of HAZMAT registration number(s). In order to accomplish these changes, ANSI Standard X12 covering EDI transmissions will need to be modified -- a process that may take several months.
   
    
2. Shipping Papers

   The identification of the consignor and consignee on shipping papers presents problems that are similar to those related to the inclusion of HAZMAT registration numbers. There is currently no real-time method to verify the authenticity of these entities. Additionally, neither "consignor" nor "consignee" is defined in 49 CFR 171.8. The new requirement to include both the consignee and consignor on the shipping paper will have the unintended consequences of requiring multiple shipping papers for individual segments.

   Tens of thousands of shipments are transported under product swapping transactions that are commonly called "blind shipments." In these circumstances, the receiving persons are not provided information about the true origin of the shipments delivered to them, nor do shippers, in certain cases, know the true destination of their materials. Such legitimate transactions have been recognized for many years and are acknowledged in the current HAZMAT regulations by an absence of shipper (except by water) and customer identification requirements for shipping papers. And, for the same reason, in the package marking requirements (49CFR172.301(d)), the identification of a consignor or consignee is not required to be the same as the offeror or receiver of a shipment. One DGAC member estimates that they will lose $2,000,000 of gross sales annually if they are not able to make "blind shipments".
    

3. Security Plans The proposed Subpart on security plans should be revised to address practical requirements that will enhance the security of HAZMAT transportation. For example, a corporate entity may not be able to establish a plan that may be "commensurate with the level of threat at a particular time," when threat levels have varied by the hour, as evidenced by recent public announcements from high-level government officials. And, we do not believe it is feasible for a plan to include [all] "possible security risks" (172.802) when many of those risks are unknown.

   In addition, DGAC requests RSPA to consider the following:

   • Under 172.800(a) RSPA has stated that the subpart applies to shippers and carriers, whereas, under 172.800(b) everyone who is registered is subject to the subpart on security plans. There are many more registrants than just shippers and carriers. There are currently a number of corporate entities in the US who transport HAZMAT but are not subject to registration requirements. It is conceivable that a registered offeror would be in non-compliance with this subpart by offering HAZMAT for transportation to an entity that is not registered; and therefore, not subject to the security plan requirements.
      
   • In 172.802(a), RSPA has proposed to verify the information provided by the applicants on application forms and resumes but has not stipulated what information is relevant to the verification process. It is also unclear whether it is RSPA' s intent to apply this requirement only to "HAZMAT employees" or to any employee.
      
   • In 172.802(b), RSPA has proposed establishing a process to prevent unauthorized access to HAZMAT and transport "conveyances." In many situations, HAZMAT are delivered to or through facilities operated by entities that are not subject to the security plan requirements because they may not be legally required to register.
      
   • It would be highly impractical if not impossible to "assure" the security of HAZMAT in transportation (both en-route from origin to destination and during storage incidental to transportation) as proposed in sub-paragraph, 172.802(c). Development of transportation security plans is more complex than indicated in the NPRM. Hazard evaluation, risk analysis criteria, and gap analysis must all be completed prior to developing a plan. Neither the federal government nor the private industry has any tools available to perform the transportation security risk analysis that must be developed to perform such an analysis. Therefore, we believe that RSPA greatly under estimated the number of hours needed to develop a security plan. For the 6000 (15% of the total registrants) large HAZMAT registrants, DGAC estimates that it will take a minimum of 200 hours to develop a comprehensive transportation security plan (estimated cost for the 6000 registrants: $100 per hour x 200 hours = $ 120 million). These costs do not include the "updated or revised" plan costs, which could be substantial.
   
    
4. Training.

   DGAC does not believe that RSPA has fully evaluated the issues related to training. We are not aware of any existing transportation security training materials available for general use, in particular for thousands of small businesses. Current DOT HAZMAT training modules do not cover transportation security. Once a final rule is issued for Docket HM-232, time will be needed to develop a basic transportation-training program. Transportation security training cannot be completed until the required security plans have been developed so that plan-specific training can be delivered. It will take several months to develop satisfactory transportation security plans and consistent training programs. Put simply, security plans must be completed before training programs. Therefore it will be impossible to train several million HAZMAT

   employees within the 90-day period following the issuance of a final rule that lends itself to development of appropriate training programs. At a recent DOT public meeting, an air industry representative stated that 10 airlines have a total of 750,000 HAZMAT employees. Therefore, we believe that RSPA's estimate of 300,000 to 400,000 HAZMAT employees is significantly low.

   Using RSPA' s own estimates from the NPRM, at the $15 dollar per hour average training cost, the cost for training one million employees (a low estimate) is $15,000,000. Security plan-specific training is likely to require 4 hours, which would quadruple the cost of training to $60,000,000. The costs discussed here do not include development and delivery costs associated with plan-specific security training programs, nor the time taken away from regular work activities.
    

Equating HAZMAT transportation safety with security can lead to conclusions that may not only result in ineffective security programs but in needlessly burdensome and complex transportation requirements. The rules proposed in the NPRM would add several new identification and disclosure requirements to the transportation safety requirements that will accomplish little, if anything, to improve transportation security. They will, however, result in increased complexity and cost, a significantly greater potential for error, and subsequent delays. In addition, the relatively vague requirements in many other areas, including personnel security and training, while perhaps intended to allow a measure of compliance flexibility, will instead most likely result in misinterpretation, and inadvertent non-compliance.

In summary, we are concerned that the proposal, if adopted as written, will be very expensive (more than $500,000,000) in its implementation and will result in very limited benefit, none of which would be derived from use of registration numbers, registration certificates and consignor/consignee names and addresses for security purposes. We appreciate the opportunity to provide these comments and hope they are useful. Please contact us should you wish to discuss any of them with us in greater detail.

Sincerely,

Alan I. Roberts
President