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More Material Handling IssuesThe regulations and proposals on the previous pages are certainly influencing the material handling industry and the overall business atmosphere for material handling distributors. But they aren't the only ones having an impact. Other MHEDA dealers spoke up about some issues that are affecting business in their states. Although these issues aren't likely to affect all distributors, they are interesting scenarios to keep an eye on in your region.
Alaska Is Not The Last Frontier for OSHA MHEDA's lone Alaskan member offers some intriguing stories about the regulatory issues in his state. Jesse Thacker, vice president of B&J Lift Truck (Anchorage, AK), laughs when he says, “We've had some interesting things happen.” Thacker believes the state's highly regulated oil and gas industry is the cause of many of the rules. “I don't know the exact logic behind it, but much of it stems from the oil fields. Everything is safety, safety, safety. And it should be, because they're dealing with petroleum products and compressed gases, but it's safety-conscious to the point that it's almost bad for production. Because the oilfields are scrutinized by so many outside groups—the government and environmentalists—the state does its best to walk both the safety and public relations lines. 'We're environmentally friendly and use electric forklifts instead of combustion whenever we can,' so they can avoid the carbon monoxide issue altogether.”
The carbon monoxide issue to which he refers relates specifically to emissions rules. Alaska state law is a little stricter than the federal OSHA guideline. Federal OSHA law says that 50 parts per million is an acceptable emission level in the warehouse, but Alaska state law says it can be no higher than 35 parts per million. “It's had a definite impact on a lot of warehouses. Several customers have thought they were compliant, and according to the national rule, they were,” Thacker relates. “However, the first time an OSHA inspector pulls a sample, the company gets hit with a fine because they're running at 37 parts per million. Our guys must go out there and tune the forklift.” Thacker notes that companies who relocate to the state are often the ones hit the hardest. “We have some businesses and contractors who come up here from the Lower 48 and they think they're lockstep because they fall within the federal guidelines. Most people who initially set up operations here—and even many big companies in the Lower 48—operate used forklifts. So they buy their used lifts to get started, and make sure they are below the federal level but aren't aware of the state mandate.” Other laws have an impact, too. “Another one concerns operator training,” Thacker notes. “OSHA requires lift truck operators to be certified every two years. Right now, there's discussion in the state of Alaska to do annual certification due to high employee turnover rates. That will be really expensive and inconvenient, and there has been some grumbling in the Alaskan forklift industry.” The law currently still stands at every two years. B&J Lift Truck has tried to be proactive to handle these situations and ease its customers' angst. “Most contractors out there are required to have so many continuing education credits to be a general contractor. By taking our forklift safety class, they already satisfy six of those credit requirements through the state. Sometimes, universities require continuing education credits, different types applicable to trade fields. B&J is recognized by the state to offer these credits. Other companies should check with their state entities because their safety courses can be recognized for continuing education credits.” Tort Reform Bills Revamp Mississippi Businesses
The state of Mississippi in 2004 passed an omnibus tort reform bill that has become a model for proposed laws in other states. “These laws got passed in our state because Mississippi was becoming a battlefield for frivolous lawsuits involving everything from asbestos, tobacco and Vioxx to car financing. Lawyers were venue shopping and using three counties in Mississippi that were very susceptible to that kind of thing,” notes Joe Schmelzer, president of Equipment, Inc. (Jackson, MS). The pieces of the legislation that most directly impact the material handling industry involve placing limits on where people can file lawsuits; providing protection for “innocent sellers” of faulty products—stores or others who only sell things without changing the products; and providing some protection for owners of homes or businesses in injury claims. In lawsuits with multiple defendants, each defendant will pay only his or her own share of the damage awards rather than having people or companies with more money forced to pay a larger share than those with less money. A key provision of the bill caps pain-and-suffering damage awards at $1 million in most lawsuits. “The cost of insurance is driven by the cost of litigation, so this issue greatly affects the overall business health of our state. Several insurance companies wouldn't even do business in Mississippi because of the abundance of frivolous lawsuits. Since the new laws have passed, already insurance companies have come back and there has been a drop in rates.” This issue is especially critical for material handling because several industries are attracted to moving to Mississippi to take advantage of these laws. “Large automobile manufacturers and the supplier plants that support them are coming here. They previously were scared off because of the open, litigious climate we had here in the past. Material handling is so heavily involved around commerce, especially manufacturing and warehousing, that tort reform will provide a major economic boom. It has a tremendous economic effect on everybody.” Propane Storage Rules Put Worm in Big Apple A lesser-known and geographically specific rule affects companies such as Key Material Handling (Brooklyn, NY). General Manager Robert Kehley says, “In New York City, an interesting ruling concerns propane storage. The New York City fire department is very stringent on the storage of extra tanks. They will allow one tank on the machine, but they will not allow storage of multiple tanks.”
The reason dates back to 1998. According to Kehley, a plumbing supply house in the city was storing plumbing tanks—which are like combinations of forklift tanks and barbecue tanks—in its basement. The company had a legal permit for storage. However, when carrying a new inventory of tanks from the street level down to the basement, one of the tanks broke. Instead of putting the tank outside to let it blow off, the employees fled the scene. A heater ignited the gas and the building exploded, killing three people. “Somehow the city was tied to the issue and the city fire department was held partially liable. From that point on, it's not been likely to get a storage permit for propane tanks in New York City,” Kehley says. The interesting thing is that there really is no regulation, at least not in print. “If you go to the city with a request to build a propane storage facility, you are given a set of 'rules' to comply with. When it comes down to actually getting approval, more often than not, approval is denied because you have not complied with some of the 'rules.' Legally, there's no set of regulations to prohibit you from storing it, but the costs and red tape make it virtually impossible. In other words, it's not illegal to build a storage facility. But the way the rules are interpreted will frustrate you to the end.” People who hold previously granted permits are able to continue to use them. “But those permits are gone the minute something moves or changes.” For example, Kehley says his storage facility was deemed insufficient even though it had been there since 1980. It forces a user to choose from a list of undesirable options. “You either get a daily delivery, which drives the cost of propane through the roof, or you buy scrap machines to handle extra tanks.” Kehley says that the “law” has greatly impacted his business by taking the propane forklift business, which was about 70 percent of his sales, down to about 40 percent. “What's strange is that I used to have a storage permit for six tanks. Now they have taken away my storage permit, but with one on every machine, I have about 120 tanks. It's just a convoluted situation.”
Dealers Confront Fire Codes Many material handling distributors, integrators and installers are continuing to face problems caused by various state and local fire codes. As explained by Mark Nelson, president of Nelson Equipment Company Inc. (Shreveport, LA), these issues affect business in a variety of ways. “Typically, fire code issues are coming up in storage rack applications. Questions arise most frequently when determining if in-rack sprinklers are needed and what alternatives to in-rack sprinklers are available.”
Other applications also can be affected. The codes can impact mezzanines and pick modules, particularly pertaining to access and egress to those type of systems, as well as which types and styles of stairways or decking are approved. Fire code issues also come up with electric battery charging and changing stations within warehouses and distribution centers. “Those areas,” Nelson notes, “are to be segregated from the rest of the warehouse, and the fire suppression system applied there may differ from the rest of the facility.” Dealers know these issues exist, but they still are a source of consternation. The problem is that the codes are inconsistent throughout cities, even throughout facilities. “There is not a global solution to all the application problems, so it's done on almost a case-by-case basis,” Nelson says. Local fire marshals can have the authority to give exemptions to certain codes in certain circumstances, which can muddy the water even further for distributors. “Sometimes you design a project by code, and the fire marshal won't approve it because they want a more stringent regulation followed. So fire marshals ultimately dictate what can and can't be done.” Reasons that a marshal may not approve an installation usually stem from a recent accident. If the design does not get approved by the fire marshal, an installer can request a meeting to sit down and discuss the concerns as to why the codes were not sufficient in that particular application. Nelson says, “Sometimes you're able to overcome objections just by minor design change. Sometimes they tell you, you've got to do this, this and this and it just increases the cost of the system.”
Fire codes already pose a major concern for material handling distributors like Nelson, who believes the restrictions will get tighter as warehouses become more automated. “There will be a closer look at fire codes and what suppression equipment is installed because accidents do happen. You don't want to ruin a million-dollar sortation system by having false alarms or the improper system in place.” Nelson also points to the issue of smoke and water damage in distribution centers. “There's a lot more thought taking place about how to protect the inventory from smoke and water damage. Some designs are being conceived to resolve issues of those natures, anticipating salvaging consumer products.” Most big distribution centers now are sectioned off for fire codes. They have to have firewall baffles so fire doesn't crawl across the ceiling and expand. There are natural barriers created in large distribution centers by design for fire codes to meet the local, state and national codes. “Those things are being done, but some entities are taking action a step further to try to protect their property.” |
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