Moore on Pricing: Reducing the impact of dangerous goods on air cargo costs

On January 1, the International Air Transport Association’s (IATA) revisions of their Dangerous Goods Regulations (DGR) went into effect. Many passengers have only had brief exposure to the complex rules that face aircraft operators. For example, passengers are told to take lithium batteries out of checked luggage that’s going in the cargo hold and to carry batteries and electronics in their carry-on bags so that it can be accessed if there’s a fire. For air cargo shippers and carriers, the rules are more numerous and complex. 

I recently had a discussion on DGR with Joe Tillman, president of TSquared Logistics, a certified IATA and DOT Hazmat training company. “Hazardous or ‘dangerous goods’ are articles and substances that are capable of posing a risk to health, safety, property, or the environment,” he says. “In order to offer dangerous goods to an operator, all shippers must be trained on IATA regulations.”

On the complexity of the rules, Tillman says that IATA regulations contain all of the requirements of the International Civil Aviation Organization technical instructions as well as more restrictive requirements than the technical instructions allow. This, he adds, reflects industry standard practices or operational considerations.

“There are numerous products capable of being shipped by ground or ocean that are unacceptable for air shipments due to the dangers presented during air transport,” says Tillman. 

So, diligence for shippers and carriers is critical in making the transition from ground to air modes. As an example, IATA revisions in January note that the handlers need to make a special determination for chemicals packaging, as many chemicals will have a new diamond shaped label adopted by the United Nation’s Globally Harmonized System for Classification and Labeling of Chemicals (GHS) System. In turn, this might lead the carrier to believe that a chemical product is dangerous when it may not be. 

Looking at the cost areas, there’s labeling in addition to handling. “For marking and labeling requirements themselves, IATA regulations differ on the use of limited quantity markings,” says Tillman. “The IATA requires both hazard labels and the Y limited quantity marking, where as Title 49 CFR parts 100 - 199 [ground shipments] do not require hazard labels for limited quantity shipments.”

Sorting, accepting, and stowage of dangerous goods need to be handled by trained operatives in order to minimize risk—and carriers need to be compensated for this extra effort and risk mitigation. Carriers will charge a premium and reserve the right to hold cargo off an aircraft if there’s a problem with packaging, labeling, or even the potential to interact with some other shipper’s cargo on that flight. Some airlines have unique rules for data entry, tendering, size of shipments, and documentation beyond the IATA rules. 

For shippers of dangerous goods by air, Tillman suggests five key actions:

1. Know your product, its characteristics, weight, volume, strength, and the hazard classification. Note that classification can change as quantities change.

2. Know your carriers. Understand what your forwarder and your carrier need from you well before you start the shipping process.

3. Get formally trained and certified and re-certify each employee at least every two years. Note that frequency of training varies by the individual’s role.

4. Walk through the shipping and transport process with each organization that will touch your cargo. Understand the where, what, and how of each step.

5. Understand the fees, options, and insurance requirements.

Being smart about dangerous goods shipping means fewer delays, less re-handling, fewer diversions, and yes, fewer fines. In all Hazmat shipping it’s less about rates per pound and more about reducing the total cost of completing a delivery safely.