NACD hits 50 next year

GOLDEN YEARS

DISTRIBUTION • NACD CELEBRATES ITS GOLDEN ANNIVERSARY NEXT YEAR. PRESIDENT/CEO ERIC R BYER LOOKS BACK AT SOME OF ITS SUCCESSES OVER THE PAST FIFTY YEARS

THE NATIONAL ASSOCIATION of Chemical Distributors (NACD) is an international association based in Arlington, Virginia, US, with its membership comprising nearly 430 chemical distribution companies and their supply chain partners. NACD members represent more than 85 per cent of the chemical distribution capacity in the nation and generate 93 per cent of the industry’s gross revenue.

Our members, operating in nearly every US state through approximately 3,400 facilities, are responsible for more than 26,000 direct jobs in the US. Collectively, our industry as a whole is responsible for almost 137,000 direct and indirect jobs. Chemical distributors in the US are predominantly small regional businesses, many of which are family-owned and multigenerational – on average having 30 employees and operating under extremely low margins.

NACD’s members meet the highest standards in safety and performance through mandatory participation in NACD Responsible Distribution® , the association’s third-party-verified environmental, health, safety, and security programme. Through Responsible Distribution, they demonstrate their commitment to continuous improvement in every phase of chemical storage, handling, transportation, and disposal operations.

Owners and operators of NACD member companies have a personal stake in the safety and security of their employees, companies, and communities. They demonstrate this through their continuous improvement in performance under Responsible Distribution, relationships with employees, involvement in local communities — including participation in Local Emergency Planning Committees — and careful compliance with the numerous environmental, safety, and security regulations at the federal, state, and local levels.

ECONOMICS AND SAFETY NACD’s membership sells into a diverse array of market sectors, including agriculture, construction, pharmaceuticals, personal care products, oil and natural gas, paints and coatings, water treatment, and more.

In fact, the chemical industry touches 96 per cent of all commerce in the US. The chemical distribution segment of the industry, and most specifically NACD members, plays an important role in the supply chain to facilitate the movement and repackaging of products to enable this to happen. The association’s membership annually generates nearly $33bn in sales, delivering products to 750,000 customers every 7.5 seconds while driving 411 million miles with private and third-party truck fleets. They deliver nearly 34 million US tons each year, with the average shipment valued at $7,800.

While NACD members’ economic impact is a key component of the US market, the measures they take through Responsible Distribution ensure their products are handled on-site and transported via road and rail with the highest levels of safety in mind. In 2018, the most recent data available, NACD members reported only one incident for every 8,900 shipments, a 16.4 per cent decline over the last eight years. On top of that, small firms average just one incident per $37m in net sales. Large firms average even fewer, at just one incident for every $111m in net sales. These results show that even operations with minimal staff and resources are focused on safety.

PROGRAMME ACCOMPLISHED As NACD looks to celebrate its 50th anniversary as an association next year, and in recognition of HCB’s 40th anniversary as a publication dedicated to operational safety in the chemical supply chain, it’s important to highlight our evolution over those 50 years and mention some of our biggest accomplishments as an organisation.

Formed in 1971, NACD was initially created to represent a specific part of the chemical industry – chemical distributors. For many years, our membership comprised only those companies that are classically chemical distribution companies.

Since then, we have significantly opened our membership to companies along the entire spectrum of the chemical industry. In fact, we now have four additional membership categories beyond ‘distributor members’, namely: Chemical Producer Affiliates, Chemical Handler Affiliates, Service Provider Affiliates, and Global Distribution Partners. Each of these represents a different subset of the chemical supply chain that are essential for chemical distribution companies to operate effectively.

This expansion enhanced our effectiveness in bringing together suppliers, customers and other vendors to tackle significant business issues and learn from each other on a host of operational, regulatory, and Responsible Distribution issues.

Along those lines, the creation of our yearly trade show and conference, which was originally known as OPSEM but is now called ChemEdge, has been a particular success. Shortly after NACD was founded, it quickly became clear that we needed a conference to bring together not just the C-suite individuals of our industry, but also middle management and operations professionals who conduct the vital nuts-andbolts work of distribution every day. We endeavoured to bring those people together to learn from each other’s successes and challenges and also provide subject matter experts from outside our membership to lead sessions on industry best practices.

We’ve since grown that event to three days of training, with parallel Responsible Distribution and Regulatory Affairs Workshops. Given the rich content we offer, we have been able to grow the attendance of ChemEdge to more than 400 people and approximately 70 exhibitors who showcase their products.

The launch and subsequent improvement of Responsible Distribution over the years has also been a proud accomplishment of our association. When we started the programme in 1991, it was simply a document verification process every three years – we did no on-site inspections. By 1998, we realised we needed to make the programme more robust, so we adopted third-party on-site verifications, which allowed us to more easily identify areas where member companies could improve.

Following the terrorist attacks on 11 September 2001, we also instituted security elements throughout the programme’s Code of Management Practices to ensure our members were taking seriously the threat of terrorism and putting strategies in place to safeguard their products and facilities. And, we also now require our members to have 20 per cent of their facilities undergo the on-site verification process every three years – instead of just one facility – to make sure they’re implementing the programme across their company and within their corporate culture.

Lastly, we launched a number of educational programmes in recent years to give our members access to tools and resources to run their businesses more effectively and efficiently and to train the future leaders within chemical distribution. In 2013, we initiated our Emerging Leaders programme, in which participants go through a two-year course designed to educate them on management practices, enhancing productivity, problem solving, and more.

We also joined with Duke University’s Fuqua School of Business to offer a series of three-day or five-day executive certificate programmes. These training sessions include the Duke Leadership Program, the Duke Management Program, Business Negotiation Skills, and Advancing Women Leaders, among others. Beyond that, we increased the number of weekly webinars we offer on a broad range of topics to give businesses – particularly small businesses – access to information and subject matter experts to grow and manage their companies.

And we created an online educational platform called NACD U that includes over 200 short 30-minute to one-hour courses on issues such as Responsible Distribution, transportation, safety, regulatory compliance, and much more. GOVERNMENT POLICY As the association has grown, so too have the regulatory and legislative issues impacting our membership. In reflection of those impacts on our industry, our association increased its presence in Washington, DC on compliance and business issues, and we have achieved some significant wins on the policy front.

In 1971, the same year NACD was formed, the US Congress passed a law known as the Toxic Substances Control Act (TSCA), which was designed to enable the still fairly new US Environmental Protection Agency to regulate thousands of chemicals on the market better. Since then, the number of chemicals in commerce has exploded to upwards of 80,000. It became clear in recent years that a better framework was needed to give both regulators and industry the ability to manage all those chemical products.

For the better part of a decade we, along with other industry stakeholders, advocated for an update to TSCA. In 2016, we finally accomplished that goal through the Lautenberg Chemical Safety for the 21st Century Act (LCSA), named after the late and long-time reform advocate US Senator Frank Lautenberg (D-NJ). Many of those reforms

NACD PRESIDENT/CEO ERIC R BYER (ABOVE): NACD

MEMBERS ENSURE THEIR PRODUCTS ARE HANDLED

AND TRANSPORTED VIA ROAD AND RAIL WITH THE

are still in the process of being implemented, and there have been unforeseen challenges for both the regulatory community and industry to apply those changes, but LCSA has still been an improvement over the old TSCA.

On the security side, in 2006 we provided input to Congress and the US Department of Homeland Security to create the Chemical Facility Anti-Terrorism Standards (CFATS) programme, which put in place regulatory requirements for companies handling or storing hazardous chemicals to thwart the threat of acts of terrorism. That programme has been reauthorized multiple times since then with chemical distributors’ full support.

Unfortunately, as of this writing, CFATS is set to expire 23 July 2020. Due to the coronavirus pandemic, 2020 being an election year, and a number of other political issues, it has been difficult to get the attention of Congress to pass long-term reauthorisation legislation that would give industry and regulators alike the certainty needed to make security investments at their companies and implement the regulatory requirements, respectively. Yet we remain hopeful that CFATS will continue – and if it does expire, we will work tirelessly to bring it back in some shape or form because a federal standard is critical to ensuring our country’s national security.

The association has also been successful in rolling back duplicative or unnecessarily onerous regulations, like the Risk Management Program changes put into place in the final days of the Obama administration, updates to the hours-of-service regulations for truck drivers, changes to the Process Safety Management regulatory regime, and even the US’s implementation of the Globally Harmonised System of Classification and Labelling of Chemicals (GHS).

Finally, NACD has also made significant inroads to advance our members’ best interests on trade policy. First and foremost, NACD successfully petitioned the Trump administration to exempt hundreds of chemical products from the Section 301 tariffs on imported Chinese goods. Many of those products can only be sourced from China and tariffs on them would have placed a significant financial burden on NACD member companies that regularly do business with Chinese firms.

In recent years, we have also successfully advocated for the reauthorisation of the Generalized System of Preferences and the Miscellaneous Tariff Bill. These two programmes effectively reduce the tariff rates on thousands of goods that either cannot be sourced domestically or otherwise would put US businesses at a global disadvantage because of higher import duties. Taken together, our success in encouraging the Trump administration and Congress to reduce tariffs on thousands of products through these three policies has enabled NACD members to remain competitive in the global chemical market.

CLOSING THOUGHTS As you can see, NACD has been busy ever since its founding to provide networking opportunities, educational resources, a framework for EHS&S performance through NACD Responsible Distribution, and policy achievements to our membership to ensure they have the best possible business, regulatory, and educational environment to run their companies at peak levels.

We are proud of our accomplishments over the last 50 years, and we are confident that we will continue to push the bar ever higher for ourselves, our membership, and the broader chemical industry over the next half a century. www.nacd.com

THE GROUND WORK FOR TODAY’S NACD WAS SET BY

ITS ORIGINAL BOARD OF DIRECTORS IN 1971 (TOP)

AND PARTICIPANTS IN THE FIRST RESPONSIBLE