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September 29, 2010

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Transport and logistics – Transfer talks

Tension and communication breakdown in the supply chain can contribute to injury and death in the workplace. John Gollaglee and Siân Wall examine why all parties, including logistics firms, suppliers and their customers have a duty of care to cooperate and communicate in order to protect the health and safety of workers and the public.

Communication and cooperation are essential components of effective transport management. Indeed, where these have been lacking between businesses throughout the supply chain, the results have, on occasion, manifested in numerous workplace fatalities. In particular, where businesses work together from the same site, whether that be a transport provider with a permanent base on a customer’s site, or simply when a driver arrives to make a delivery, cooperation between all parties is paramount.

Joint responsibilities

Throughout the supply chain there is an inevitable overlap of responsibilities between all parties. Manufacturers, transport and logistics firms, and commercial customers come into contact with each other during the supply of goods. However, this overlap often leads to tension and struggles along the supply chain, particularly when everyone is under pressure to deliver goods quickly.

Under the Health and Safety at Work, etc. Act 1974, employers are duty-bound to provide information on potential risks to other businesses they work alongside. Indeed, the Management of Health and Safety at Work Regulations 1999 specifically require businesses to ‘cooperate and coordinate’ with those with whom they share sites. Nevertheless, this is often neglected and gaps in health and safety management manifest themselves in the event of an accident.

As SHP readers know, section 2 of the HSWA provides that every employer has a duty to ensure, so far as is reasonably practicable, the health, safety and welfare of their employees while at work. Section 3 extends this duty by providing that it is the duty of every employer to conduct their undertaking (business) in such a way as to ensure, so far as is reasonably practicable, that others affected by their business are not exposed to risks to their health and safety. This extends the duty to non-employees, contractors and visitors.

Therefore, when a transport firm delivers stock to a commercial customer and, also, where the transport business has a permanent base on its customer’s site, both the employer and the customer have responsibility for the safety of the driver – the employer under section 2, and the customer under section 3.

Mind the gap

When there is clear overlap, some duty-holders assume that the other is taking charge and fail to consider their own role in managing health and safety. Customers may consider that once a trailer has been loaded, they have no further part to play. Likewise, a transport company may consider that once its drivers pass the customers’ gates, there is nothing further for them to do.

However, the reality is not as clear-cut. In a busy distribution yard, it is easy to assume that the responsibility is someone else’s problem. On some sites there may also be a tendency for companies to adopt a ‘them and us’ mentality. Not only can this lead to hazards going unrecognised but also to assumptions that the other business is managing those risks. This failure to inform those we work with about hazards, as well as failing to check that a known hazard is being managed, is a criminal offence.

Unfortunately, this failure to cooperate and coordinate – in other words, just communicating – has led to loss of life. Drivers attending an unfamiliar customer site can and have been struck by forklift trucks while waiting for their vehicle to be off-loaded, sheeting up, or preparing their trailer to leave. Drivers have also fallen from their vehicles when offloading in an attempt to help the customer, while pedestrians have been hit by delivery vehicles when they have been manoeuvring around busy sites.

While other issues, such as inadequate vehicle/pedestrian segregation measures, and poor training and supervision will no doubt play a part, the underlying cause of the accidents will often involve a failure of the parties to speak to each other to find out how activities will be undertaken, and to then pass that information on to their own staff.

Customer is king

The problem for most transport and logistics firms is that in this intensely competitive environment the customer is always king! Delivery contracts tend to be high in value and low in margin, offering little room for manoeuvre. In addition, the market is saturated with suppliers, and customers push logistics firms hard for extremely favourable terms. 

Indeed, in the present economic climate, such is the intensity of competition for commercial contracts that when a customer says jump the logistic firm’s response is often: ‘how high?’ And many know to their cost that raising the issue of health and safety before they’ve signed on the dotted line could see them lose a vital contract.

It is certainly not unheard of for transport businesses to have taken on new contracts before subsequently realising, for example, that there is inadequate space for HGV vehicles to manoeuvre safely around the distribution base, or at the sites of the customer’s clients to whom they are delivering the goods.

In some situations drivers have been forced to use car parks adjacent to the customer’s site, a decision which has resulted in fatalities on occasion. Surely, it would have been far better to have had the conversation with the customer in the first place to change the traffic routes at the yards?

It’s good to talk

It is not, however, solely down to the transport company to take on additional responsibilities for the safety of sites. All parties in the supply chain need to think about potential overlap issues, and then establish who is in the best position to deal with those activities that cross over.

For those sharing sites, a constant free flow of information could make everyone’s workload lighter. If parties had an understanding and appreciation of when the other’s busiest times occur, this could be factored into each company’s safe working practices. Such information might lead to a change in the flow of traffic on site, joint training for staff – all of which will help reduce the risk of accidents occurring on site.

It is also essential that health and safety procedures are established at all sites where collections and deliveries are made. Simple questions can ultimately save lives: who provides the drivers with a site induction on arrival?  What are the arrangements for banksmen? Where should the driver wait during loading/off-loading? Will the driver have to enter a pedestrian area? Are deliveries expected at times when workers are entering and leaving the building?

While it may not be reasonably practicable to conduct detailed health and safety inspections at all delivery addresses, it is essential that the businesses get the correct information about operational procedures and responsibilities at these sites. Obtaining this information and providing it for drivers could be a deciding factor on whether a prosecution is pursued, in the event of a driver sustaining injury while on a customer’s site.

Tough trading

Commercial contracts are won and lost every day in the logistics industry. Securing a contract is often the result of many months of tough negotiations, although, once the deal is done, the logistics firm will gain control of the site very quickly. But companies need to be wary that a new contract doesn’t turn out to be an expensive white elephant.

Very often, these businesses start the contract on day one with little health and safety information about the new sites they are working at, or about the drivers in terms of their levels of competence. As the business will assume health and safety responsibility for their operations on the new sites on the signing of the contract, this is another area where organisations need to cooperate and coordinate in respect of health and safety. 

We know of many cases where businesses have taken on new contracts, then subsequently realised that considerable time and expense are required to make their new workplace safe. Customers needing to ensure a constant supply of goods to their clients require a seamless transfer between logistics providers. It is extremely important that health and safety teams conduct thorough due diligence of newly-acquired sites and impress on management that any changes are imperative.

Ideally, a health and safety assessment should take place before the new firm takes over from the incumbent provider. In reality, though, many logistics companies are reluctant to ask the client for access to the site for fear of losing the contract. It is a catch-22 situation for logistics companies, which, on the one hand, don’t want to be stung for safety costs that emerge after the deal is signed, yet, on the other hand, don’t want to jeopardise the contract by insisting on health and safety inspections.

While the main focus for company directors will be on the commercial aspects of the contract, health and safety advisors need to lobby hard internally to ensure they that have time to prepare a site for safe operations.
Advisors also need to ensure that any contract has the provision to factor in the cost of a health and safety resource. Health and safety advisors tend to be a central overhead rather than being priced into the cost of a contract. If significant investment is going to be needed to ensure site operations are safe, reflecting this in the contract needs to be considered.

Conclusion

Cooperation and coordination are not about parties in the supply chain taking each other on. Rather, they are about common goals and working together to ensure that any gaps in health and safety procedures are filled in order to protect workers.

It is imperative that all parties obtain information about health and safety procedures at the distribution base, as well as at delivery addresses, and communicate this to drivers. They also need to establish who is responsible for what, have regular meetings, and ensure effective and adequate procedures are in place.

It can be difficult to force one party to communicate when they don’t wish to do so, but the consequences of sitting back and ignoring the problem are high – from six-figure fines for serious health and safety breaches to irreparable damage to a company’s reputation. But by far the biggest consequence is the loss of life – protecting the lives of workers is surely far more valuable than any contract.

John Gollaglee is a partner and Siân Wall an associate in the health and safety team at Manchester law firm Pannone.

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