Logistics HSSE Accountability in an Increasingly Outsourced Supply Chain

1
Logistics HSSE Accountability in an Increasingly
Outsourced Supply Chain

• J. Delmas Jones
• HSSE Advisor
• North American Operations
• US Logistics
• BP Petrochemicals

2
Logistics Outsourcing Trend

• Over the past several years the Petrochemical
  industry has seen a increase in the outsourcing
  of many of the logistics functions.
• Some of these functions include
• Shipping
• Storing
• Repacking
• Transloading

3
LOGISTICS HSSE Accountability Within the Supply
Chain
Customer
Inbound Raw Materials
Facility
Customer Pickup
Arranged Transport
Supplier Facility
Equipment
Containing
Terminals, Transloads Warehouses
Residual
Material
Non
-
Contracted
Cleaning Facilities
Contracted
Distributors
Tollers
Plant
Swap Moves
Current Chemicals
Contracted Inbound, Outbound Empty Return
Industry Benchmark
Reporting Area
Plant
Customer Pick up or Provided Transport
Transportation Demarcation Line
4
Perception on Logistics Management

• Any time there is a major industry incident in
  transportation the public is left asking
  manufactures what they did to ensure their
  product was safely brought to market.
• Hazmat incidents only amplify the above issue.
• Public perception questions if industry has doing
  enough.
• Legislation tends to follow major industry events
  to bridge the gap.

5
What is Logistics Accountability

• Corporate companies still responsible for due
  diligence
• Companies Management provide Framework
• Clarity on roles around assurance thru corporate
  policy
• Industry Groups like ACCs Responsible Care
  provide Framework
• Distribution Code
• Product Stewardship Code
• Security Code

6
Understanding Logistics Obligations

• License to Operate
• What we must do to stay in business
• Legal Requirements
• What we must do to comply with applicable
  laws/regulations
• e.g., as a Shipper of Hazardous Material --- 49
  CRF Part 172
• e.g., Transportation Security Act, CTPAC, Marine
  Transportation Act etc.
• Commercial terms setting clear terms for
  delivery
• FOB, CFR, CIF, etc.
• Committed Industry Trade Standards
• What you say to the public you do
• e.g, Responsible Care
• Company Policies
• What you want to do

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Remembering our Liabilities

• As we outsource our logistics we can not
  outsource our liability
• Commercial terms are not a method to eliminate
  our liability, major petrochemical manufactures
  are perceived to have deep pockets
• Customers perceive our carriers as an extended
  representation of the companies image, as these
  are the individuals who physically represent the
  company when delivering our products
• Public sometimes also perceive our carriers as an
  extended representation of how and who we do
  business with.
• Stating that applicable laws and regulations are
  followed by carriers in contracts is nice, but
  there has to be a check and balance to verify
  that these areas are truly complied with.
  Vetting of carriers fulfills this role.

8
How to meet the supply chain assurance
commitment?

• Two choices.
• You can do it yourself
• Audit/review teams.
• You can have others do it for you
• Industry Schemes
• e.g., CDI-MPC (for containers)
• Third party auditors
• e.g., ISO, Responsible Care certification
• Other party or parties in the transaction
• e..g., Buyer has audited haulier for the customer
  collect pickup.
• When using others, you have the residual
  obligation to convince yourself that the work of
  others meets your standards in vetting carriers.
  

9
Thank You

• Questions????