Dangerous Goods: The Cost of Ownership

costs, dangerous goods, hazardous chemical, hazards, lean manufacturing, safer alternatives, storage

Aside from making a profit, on the forefront on most practical business owners’ minds is how they can save on operational costs. What they often don’t realise is that using dangerous goods is costing them more in the long run.

The use of chemical products for day-to-day operations has become second nature to most enterprises. Chemicals are present in most workplaces no matter the industry: they’re in our cleaners, office furniture, electronics, and more. Depending on the industry, some companies rely on chemicals for their processes more heavily than others.

Hazardous Substances vs. Dangerous Goods

Some products are classified as ‘hazardous substances’ and others as ‘dangerous goods’. These two terms may sound similar and are often mistakenly used interchangeably, but the definitions of each are significantly different. More importantly, their applications and the way they must be stored and handled can vary.

‘Hazardous substances’ refers to chemicals that can cause harm to human health, whether immediate or long-term. Exposure to such substances could cause poisoning, irritation, chemical burns, cancers, or other diseases. Meanwhile, ‘dangerous goods’ refers to chemicals that can cause immediate damage to property and the environment, and/or result in serious injury to people – or worse, death. These chemicals can be corrosive, flammable, explosive, spontaneously combustible, toxic, oxidising, or radioactive.

Costs Involved with the Handling, Usage and Transportation of Dangerous Goods

It’s true that most dangerous goods in and of themselves are inexpensive, or less so compared with their safer counterparts. However, due to increasingly stringent WHS and environmental compliance laws, there are various factors that make choosing these substances less economical.

Personal Protective Equipment Requirements

Personal protective Equipment or PPE requirements can vary depending on the hazards a particular chemical presents. An assortment of PPEs offer protection for the head, face, ear, eye, body, respiratory system, hand, foot, and more.

It is the employer’s responsibility to source for and select appropriate PPE for their employees and to make sure that they fit each individual employee correctly. In addition, employers must ensure that their employees are sufficiently informed and trained in the importance of using PPEs.

PPE will also need to be replaced every so often. Regular use of the PPE means they are subjected to wear and tear that can degrade their effectiveness. Over time, the cost of PPE will add up and make up a lot of your operational expenses.

Shipping Dangerous Goods

Fact: Transporting dangerous goods is expensive. Not to mention, there are strict regulations that apply to shipping these types of substances that can complicate matters. The onus is on the shipper to ensure compliance with these protocols to avoid incidents and hefty non-compliance penalties.

Dangerous Goods Storage

Recently, Safe Work Australia released their Chemical Storage Guide, aimed at helping SMEs with safe storage of chemicals in their premises. It is imperative for enterprises that use and store dangerous goods to ensure that these guidelines are properly and strictly followed in order to avoid disasters such as what happened in Tianjin, China, in 2015, and many other similar catastrophes.

For many companies, this can mean a total overhaul of their structures and processes. Regular inspection of facilities and equipment is a must, as is updating of employee training and knowledge in safety procedures.

Dangerous Goods Disposal

A report conducted by Marsden Jacob for the Environment Protection Branch of the Department of the Environment asserts that more than 6 million tonnes of tracked hazardous waste was generated in Australia in 2012. An estimated $2,417 million went to regulating, transporting, treating and disposing of said waste. (Marsden Jacob Associates, 2014)[1]

The report also suggests that total compliance costs, which include treatment, recycling, energy recovery, landfill levies, license fees, and administrative costs, range from 0.01-0.2% of total revenue for most industries. What’s more, an increase of 7% is projected to costs related to hazardous waste in the country, from $2,417 million in 2012 to $2,588 million in 2024.

The Effects of Dangerous Goods

On Workers

Personnel who are directly involved with handling, storing, transporting, or disposing dangerous goods are trained to do their jobs well. They know they must always be vigilant, alert, and prepared for anything. However, accidents can happen even to the most well-trained employee.

Constant risk of exposure to dangerous chemical products can take a toll on a person’s mind. And when their safety is compromised, coming into contact with harmful chemicals can have lasting or devastating consequences.

On Assets

Some dangerous chemicals are not only harmful to humans, they also pose a risk to your equipment. They can corrode items composed of metal, plastic, and rubber, among others, shortening the lifespan of your assets. This can mean anywhere from your storage containers, pipework, machinery, vehicles, etc.

Corroded equipment poses a serious risk to your entire operation, thus the need to regularly monitor, repair and maintain, or even replace them.

On the Environment

Dangerous chemicals that are classified as hazardous to the environment can cause acute and chronic toxicity. Emissions of these types of substances to air or water can cause long-term and far-reaching negative effects. They can kill organisms in lakes, rivers, or oceans; destroy forests; displace, sicken or kill wildlife; and, threaten the health of ecosystems.

Is it Worth it?

Environmental agencies on the national and international levels are systematically bearing down on hazardous substances and dangerous chemicals. Consumer demand for safer products are growing as more information on these chemicals is becoming readily-available. Non-compliance with regulations come at a steep price, not to mention litigation expenses when serious incidents occur.

Considering all the costs of dangerous goods ownership, there’s no question that the disadvantages far outweigh the benefits. Whilst it can seem more expensive at first glance, substituting dangerous goods for safer alternatives pays off in the long-term, reducing operational costs downstream.

More than the financial benefits to businesses, however, it’s important to think about protecting human and environmental health – for present and future generations – today.

[1] https://www.environment.gov.au/system/files/resources/d1889716-2b06-44e1-a62c-3e67ff3d595f/files/cost-hazardous-waste.pdf

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One response to “Dangerous Goods: The Cost of Ownership”

  1. […] we shared how using dangerous goods drive costs up for businesses. Now, we’d like to highlight how SMEs can save hard-earned money by using safer […]

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