The Good, The Bad, And The Ugly

The Good, The Bad, And The Ugly

The regulations that impact the gases and welding industry are many and varied. For some companies, their financial well-being can be threatened as the cost of doing business gets higher and higher. How much can a small company take before it is driven out of business? How much regulation is necessary? And who are these guys who show up on our doorsteps wanting to know all? Distributors shared their thoughts on being in compliance, a necessary part of doing business today.

DOT Rocks and Rules
“Sometimes I think I’m the training facility for the oilfield companies,” laments Kevin Curbo, president of Texair Welding Supply (Henderson, TX). “These companies require a hazmat on most trucks and haulers, and someone with no driving qualifications can come in here, get trained, and then leave to get $2-3 more per hour and 80 hours a week.” To prevent drivers from jumping ship, Curbo has started using employment contracts.

“New drivers getting their CDL for the first time will now have to do some very specific training, and lots more hours.”

– Mike Dodd, GAWDA DOT, Security,
OSHA & EPA Consultant

Dave Ungru, president, Koehler Welding Supply (Madison, WI), has accepted the reality that compliance is a part of doing business, and makes sure to keep up with the paperwork and filing everything correctly. “We work hard to be in compliance with all of the regulations and know that doing so is costly.” Ungru builds the extra costs into his delivery fees.

Kevin Curbo, Texair Welding Supply
“Because of all the regulations on the medical side, we now source our medical gases from the majors.”
Kevin Curbo, Texair Welding Supply
 
Dave Ungru, Koehler Welding Supply
“You just can’t let everything bother you, or you would never get anything done.”
Dave Ungru, Koehler Welding Supply

“We make every effort to be in compliance and are good stewards of this responsibility,” says Scott Chenoweth, president of TWSCO Inc. (Houston, TX). All the more troubling that TWSCO’s trucks are being pulled over on a regular basis. In the first six months of 2008, 27 trucks were pulled over. Chenoweth is proud that no tickets were issued and no trucks were out of service. However, he notes, “It is costing us a lot of time and dollars.” Chenoweth points to this situation as “one of the many reasons I am a member of GAWDA. Compliance manuals, consultant updates and articles form our knowledge base for what is going on in the regulatory arena and how we must comply.”

Also in Houston, United Welding Supplies is having a similar experience. The company has seven trucks running the road, and three are stopped each week. Vice President of Operations Mark Sanders explains, “In a metropolis like Houston, a half hour can mean the difference between getting across town and making a delivery, or catching the afternoon traffic and not making it.” Sanders would like to see more availability of driver training classes.

Dwayne Culver, vice president of administration at Welding & Therapy Service (Louisville, KY), is watching closely how the Hours of Service rule will play out. “With demands of product being what they are, most of the air separation plants in our region are sold out, so every time there’s a hiccup in the supply chain, we have to drive further to procure product.” Currently, Culver uses a plant that fits the 11-hour rule, but it won’t fit the 10-hour rule if it changes, and the run would then be an overnighter. “It seems that every new regulation adds product cost,” he says.

Larry Sharp, Blanks Welding Supply
“It’s common sense. It’s costly.”
Larry Sharp
Blanks Welding Supply

Larry Sharp, president of Blanks Welding Supply (Fort Worth, TX), makes sure every driver carries a handbook containing the regulations. This handbook is always in the truck with the driver. He also makes sure that new literature is added when there is a change in a regulation, and the drivers are made aware of the change.

“Because we want to be safe, we do whatever we’re supposed to do,” says Michael Higgins, president, Abbott Welding Supply Company (Olean, NY). He resists adversarial relationships, especially with regulatory agencies. “That’s just not a healthy environment for a goal we’re both trying to attain.”

Craig Wood, O.E. Meyer Company
“Take your eye off the ball and you have a problem.”
Craig Wood, O.E. Meyer Company
 
Dave Teator, Ravena Welding Supply
“Safety comes first, no matter where you go or what you do.”
Dave Teator, Ravena Welding Supply

Responding to FDA
Accu-Air Gases & Equipment (Ventura, CA) Operations Manager Jim Owens says that regulations are a pain but are also good because they help keep everyone safe. “It is one of the few good things out there because they keep me, my family, our customers and employees safe.” Owens points out that Accu-Air has been trying to comply with some of FDA’s upcoming standards, things like color-coding cylinders and securing the fittings on liquid dewars with an anti-tamper device. “I’ve been an operations manager for a long time and it comes natural knowing what needs to be done.” He notes that the company may feel some impact from the cylinder pedigree requirement. “If we start running low on cylinders, I will have to purchase new ones.”

ABCO Welding & Industrial Supply (Waterford, CT) has five medical fill facilities, and a lot of vehicles on the road, including home healthcare vans and trucks making deliveries to hospitals and doctors’ offices. Compliance Manager Paul Chevrette constantly monitors what the regulatory agencies are doing and watches for changes. “There is always something in the works,” he says, “and we’re proactive, rolling out the new requirements as they come out or even before. This provides a comfortable feeling for our customers, knowing their supplier is in compliance and on top of things.” ABCO has tightened up its hiring process for new drivers, and several management people are involved in the interview. Explains Chevrette, “We steer into the good hire and away from the bad, even before the background check is made.”

Tommy Hagan, Logan Hagan Welding Supply
“A little common sense will go a long way.”
Tommy Hagan
Logan Hagan Welding Supply

Staying Safe with DHS
Trade & Industrial Supply (Lawrenceburg, IN) has trucks on the road in Kentucky, Ohio, Illinois, Tennessee, Michigan and Indiana. President Barry Nanz acknowledges the challenge of different states’ reporting requirements for his security plan. “It consumes a lot of time and money as we’ve had to hire consultants to keep us abreast of the requirements and make sure we are in compliance.” Nanz points out that a checklist and/or a model from DHS as to how to go about putting everything together would be helpful.

Bob Ewing, president, Red Ball Oxygen Company (Shreveport, LA), now has 1.5 full-time employees doing nothing more than helping the company stay up-to-date and in compliance with regulations. In the past year, Red Ball has made significant investments in the area of security, installing video cameras, fencing and lighting to make sure that not only the company is meeting the standards, but that his people, products and facilities are safe. “Any time you shine a light on something, you find chinks in the armor which lead you to take action.”

All Logan Hagan Welding Supply (Statesboro, GA) drivers have taken Highway Watch, a program funded by DHS that uses the skills and “road smarts” of drivers to help protect the nation’s infrastructure and transport of people and goods. Drivers are asked to be alert to and report any possible threats of terrorist attacks on the road, including people making strange moves under bridge overpasses or hauling fertilizer that could make explosives, among others. President Tommy Hagan says, “We try to do better than what’s required,” and while this program seemed like a good idea, in retrospect it had some challenges. “For all practical purposes, the drivers are better off watching for the car that stopped in the road and avoiding accidents. They don’t need to be policemen, they need to be drivers.” Funding for Highway Watch was suspended this past summer.

Rick’s Top Two Regulatory Issues Facing GAWDA Members
#1  Medical Gas Guidelines – because we’re not exactly sure what’s going to be in them.
#2  Everything Else – There are probably 25 different proposed regulations out there that will have some effect on companies, including entry-level driver training requirements, driver hours of service, personal protective equipment requirements and potential changes in LIFO accounting.
– Rick Schweitzer, GAWDA Government Affairs & HR Consultant

 

Bob Ewing, Red Ball Oxygen Company
“We now have a full time director and a half-time administrative person who work in safety and compliance.”
Bob Ewing
Red Ball Oxygen Company
 
Larry Greiner, Cee Kay Supply
“Each truck has a binder containing the required paperwork set up in the order DOT has on its list. This makes it easier for the inspector and shows him we are trying to comply.”
Larry Greiner
Cee Kay Supply

Marilyn Dempsey is the compliance officer at Tech Air (Danbury, CT). She points out that since the state of Connecticut added 60 new inspectors since last fall, there has been an increase in the number of on-the-road truck inspections. Dempsey has worked hard to train Tech Air’s drivers, and does a Level 1 inspection for standing down one truck every day. “At Level 1, we can be put out of service for any one of three things: driver, truck and load. So we inspect all three.” The company has seen great improvement in how drivers handle their trucks and their loads. “It’s stuff that drivers just get lackadaisical about. They’re now looking at their loads and their trucks with new eyes.” Dempsey also keeps a score sheet on how the pumpers are doing with their logs. “Whether it’s a pumper, driver or loader, giving ownership and showing them a measurement of how they’re doing has been very successful. It’s no longer, ‘Oh I think Joe knows how to do his job;‘it’s, ‘I know Joe knows how to do his job and look, I can prove it.’”

More than Alphabet Soup
When Cryogas moved to its current facility in Arnold, Maryland, the location was an industrial park zoned for commercial businesses. “The compressed gas business is viewed as hazardous,” says COO Bill Sergent, “and there is still a lot of confusion with fire departments and safety officials about what really is involved in storing compressed gases.” Sergent says he had to jump over a lot of hurdles to convince officials. He explains that the business is often referenced as a “chemical business” for all sorts of ratings, and this is a challenge with insurance and liability. “They come into it with preconceived notions of what our industry is like, and I think they see ‘radioactive material’ written on our foreheads.” Once Sergent educates them, though, they understand.

Wayne Rasmussen, president, Atlas Welding Supply (Berkeley, CA), used to sell medical gases until California required five different licenses and charged $1,500 for each one, rather than the former $1,500 for the one license. “It was not a big enough part of our business to justify paying those fees,” says Rasmussen. He continues to package and wholesale, but no longer does the other three activities. He also acknowledges that the paperwork required to show proof of vehicle inspections is onerous. “I can’t afford to tie up two employees to take a truck to a repair shop.” So Rasmussen went back to what he did when he started at his father’s company at the age of 13, helping truck drivers work on their vehicles. “I personally inspect the vehicles every 90 days, and can do the repairs in half the time it takes my employees to go to the service shop and come back.” He notes that there is far less unexpected maintenance on vehicles now, and they are no longer broken down on the road.

Barry Nanz, Trade & Industrial Supply
“We fill argon, oxygen and nitrogen, but have decided to source our medical oxygen simply because of all the bureaucracy involved.”
Barry Nanz, Trade & Industrial Supply
 
Marilyn Dempsey, Tech Air
“When you do an internal audit, you always find places of weakness, and I really don’t like finding places of weakness. I’m as tough on myself as an inspector would be. I want all the ducks in a row and know that everyone is doing their job correctly.”
Marilyn Dempsey, Tech Air

O.E. Meyer Company (Sandusky, OH) is an ISO-certified company, and as such must follow many internal procedures. “It requires a lot of energy to stay in line with FDA and DOT, and it’s expensive,” says Craig Wood, president of the weld division. “What doesn’t seem like a big deal to the major players in our industry could be an enormous expenditure and out of reach for a smaller independent.” Wood expresses concern about the smaller company’s voice being heard. “No one is in this to hurt anyone, but we’re certainly not here to be legislated out of business.”

“When they did the switchover on the LP cylinders to the new valve style, we all gnashed our teeth a bit, but it really was for our own benefit,” says Dave Teator, president, Ravena Welding Supply (Ravena, NY). “There have to be rules and regulations in place, especially in this business, when you’re riding with families next to you down four- and five-laners.” Teator advises dealing with issues right away and discussing them with employees. “Address them and deal with them. If you’re reading your GAWDA magazine and following your manuals and papers, stay with it. If you have to make phone calls and talk to people, get it done. Address the issue and go for it.”

Gary LeFeld, vice president, Lefeld Welding & Steel Supplies (Coldwater, OH), understands the importance of doing all that is necessary to make sure the company is in compliance, especially for the safety of his employees and customers, along with the company’s liability. And while new regulations add more time and costs to doing business, he admits that he has gotten used to it, which he calls “scary, because we just keep absorbing the costs.” LeFeld asks, “Where to recoup these costs is always a business question that at some point needs to be answered.”

“It doesn’t take me a whole of time to keep up with the regs,” says Ken Darst, vice president, Madco Welding Supply (Mountain View, CA), “as long as I stay on top of everything and don’t wait to deal with new information and new regulations. I don’t want to get bombarded by a year or two year’s worth of new material.” Darst uses GAWDA’s magazine, Welding & Gases Today, the newsletter, GAWDA Connection, and Safety Bulletins to help him stay current.

Ongoing Training
Gary Ramacher, compliance manager at Central McGowan (Saint Cloud, MN), purchases a lot of training materials. “However,” says Ramacher, “the material is broad and deals with more than what we’re involved with.” So he uses only a fraction of the material for his training purposes. To get more specific, Ramacher gets information from Web sites, including GAWDA’s and the federal agencies. He also looks to magazines like Welding & Gases Today for information from the GAWDA consultants.

Looking Forward to Medical Gas Mania
–  As of January 1, 2009, distributors will find that medical gas assets, i.e., cylinders and regulators, previously used for decades, will have to be turned over to the consumer after three years of use. What happens when deceased mom’s oxygen tank is thrown into the dumpster or turns up on eBay?
–  FDA plans to promulgate its guidance document and make significant requirements on manufacturers regarding expiration dating and stability testing.
–  US Pharmacopeia is rewriting all the medical gas monographs and will change some of the testing requirements. Some analytical equipment is probably going by the wayside, forcing manufacturers to change their methods and their equipment.
– Bob Yeoman, GAWDA Medical Gases Consultant

 

Scott Chenoweth, TWSCO Inc.
“I want to do some things with medical gases, but I’m hesitant because of the uncertainty with regards to when the final regs will be issued.”
Scott Chenoweth
TWSCO Inc.
 
Michael Higgins, Abbott Welding Supply Company
“We spend a lot of time and energy staying current with GAWDA programs and working with the consultants.”
Michael Higgins
Abbott Welding
Supply Company

“The need for training is strong, but for a small distributorship, the cost can be overwhelming,” says Phil Treadwell, president, Munn Supply (Enid, OK). “Very competent people are needed to train on FDA issues. It’s expensive, as are the self-assessment audits.” Treadwell regularly uses consultants. He also utilizes online training programs, as well as safety videos.

Alex Bryant, president, Weld Direct Corporation (Jacksonville, FL), acknowledges that the requirements for being a DOT-certified driver have reduced the pool of drivers. “It’s also made it more expensive to hire qualified drivers, because the pool is smaller.” Weld Direct maintains a basic driver training program.

On the Right Path
GAWDA’s resources, including access to consultants, articles in Welding & Gases Today, training seminars and online updates are a major benefit of membership, according to everyone interviewed for this article. Russell Strate, president of Strate Welding Supply Company (Buffalo, NY), joined GAWDA “because we needed help keeping ourselves up-to-date and knowing what to expect and what we need to do to make sure we’re in regulatory compliance.” Strate uses a vehicle leasing company that makes sure his vehicles are inspected, the paperwork’s done, and the permits are in place for crossing state lines.

“You have to read everything you can get your hands on and stay current,” advises Ike Spriensma, president, Lake Welding Supply Co. (Muskegon, MI). There is so much movement and so many rumors that you’re not always sure you’re in the right, especially with FDA as they write more regulations. We’re thankful that GAWDA’s out there representing the distributorships and working on our behalf.”

Cad Beale, president, Welders Supply & Equipment Company (Montgomery, AL), relies on GAWDA’s monthly Safety Bulletins, attends GAWDA’s training workshops, and works with compliance manuals online.

Ronald Brower, president, Wayne Oxygen & Welding Supply (Waynesboro, VA), says trying to maintain compliance is pretty much a full-time job, but hiring a compliance officer is hard to justify at his small company. So he does the job, and he relies on GAWDA for help, attending meetings and conventions and calling the consultants when he has questions. “They walk me through and get me headed on the right path.”

On the Horizon
TSA is transitioning toward the Transportation Worker Identification Credential (TWIC) to be implemented over the course of 18 months. After the ports, it will be implemented at transportation facilities, distribution facilities and even customer job sites. This background check and credentialing issue is going to impose administrative costs and burdens on the industry.

Take Home Tip
In the Midwest, the month of June is called “blitz month.” Larry Greiner, vice president of gas operations at Cee Kay Supply (St. Louis, MO), says that DOT’s goal is to stop 30,000 trucks in a week. Three out of five trucks stopped on the road are his, and he is very cautious about compliance. Every truck contains a three-ring binder that holds the paperwork and materials required for a DOT inspection. Greiner makes it clear that the placement of the materials is very important. At the front of the book, he places a DOT checklist with an index of the seven requirements, i.e., cab cards, insurance, IFTA stickers—in the same order as DOT’s list. “It looks just like theirs,” says Greiner, “and our material is in the order they want. It makes it easier for them when they do an inspection, and it makes them aware that we understand and are trying to comply.” The front of the binder has the company name, unit number, VIN and license plate number. Adds Greiner, “It’s all right there, the driver pulls it out, hands it to the inspector who sees that this book matches this truck. The inspector starts flipping through the pages, and there’s all of our paperwork. He hands it back and says ‘that’s wonderful.’ We’ve had more DOT guys say they wish more drivers did this.”

Across The Table
Random calls were made to over 70 GAWDA members who were asked what they would say to a representative of DOT, FDA, DHS and TSA if they were sitting across the table from him or her. Here are some of their responses.“Make the regulation easier to understand so that it’s not interpreted so many different ways.”“Why do you treat me like a common carrier when I’m trying to deliver gas 10 miles down the road?”“An inspector having a bad day can show up and make life miserable. How can I protect myself from this?”“You do not fully understand the nature of the products we deal with. Can you increase the education level of your officers?”“Is there one training manual, because there’s a big variation in how inspections are done from state to state and from county to county?”

“I wish you would be willing to work under a we’re here to help you get into compliance mode, rather than ‘too bad, here’s your fine.’”

“Why is a driver’s off-duty record so detrimental to his on-duty record?“

“Get rid of some of the gray areas. There needs to be a process that is understandable.”

“Why does it take so long to get good regulations in place and so long to get bad regulations out of place?”

Gases and Welding Distributors Association