May/June 2006
The growing numbers of customer injuries—and related liability suits—mean it’s time to get serious about controlling visitors in the scrapyard.
By Jim Fowler
When do you lose money in the scrap recycling business? When you buy high and sell low, of course. When you don’t maintain your equipment, and when you don’t secure your facility from theft. How about when you don’t control your customers? A customer who comes into your yard to sell his scrap could cost you a lot more than what you pay for his material. If he gets hurt, you could end up with a liability lawsuit that costs thousands, hundreds of thousands—maybe more than a million dollars. That will sure eat into your profits.
Over the past five years, customer injuries in scrapyards have led to 249 claims that resulted in a total of more than $10 million in losses, according to Monica McNally, senior vice president of RecycleGuard/Willis of New Hampshire Inc. (Portsmouth, N.H.). Customer injuries are the number-one cause of serious general liability claims in the RecycleGuard program, she says, and more than half of all claims come from people struck by either equipment or material. “If claims keep escalating, premiums for general liability insurance will continue to escalate as well,” she cautions.
McNally worries that yard owners have “too high a comfort level with peddlers driving across their scales, thinking they know the scrapyard and what scrap processors are doing. That’s not good enough,” she says. “Once you invite [people] on your premises you are responsible, regardless of what they do or don’t do. Even though there may be some negligence on their part, they are a business invitee to your premises, and the chances are good that if your equipment hurts them, you will be held liable.”
Customer Education
Scrap recyclers need to worry about the safety of two types of customers, says Barney Boynton, ISRI’s director of safety outreach: new ones and repeat ones. “New customers are dangerous because they don’t know what they don’t know,” he says. They might be fascinated by the equipment and not pay attention to their surroundings.
“Repeat customers are just as dangerous,” he says, “because they think they know all the hazards and how to avoid them,” thus they go wandering off.
Training customers is a constant challenge, says Joe Bateman, corporate safety director of Mervis Industries Inc. (Danville, Ill.). “Many people think a scrap operation is just a junkyard. They don’t realize that huge processing equipment and rail and truck traffic as well as mobile equipment are in operation and can be dangerous.”
Posting and enforcing safety rules is a good first step. One large processor who buys mostly from over-the-scale dealers has a large sign at the facility’s entrance that spells out safety requirements: wearing hard hats and safety glasses, moving a safe distance from the truck during unloading, and avoiding other potential hazards. At the scale the company reminds drivers to use the required safety equipment, and if they don’t have hard hats and safety glasses, it provides them. The scale ticket should be enough incentive for the driver to return them, a company spokesman says.
“We’ve not had any problems with customer safety thus far,” he adds, “but hearing that others have, we are revisiting our visitor policy.”
At Mervis Industries, “when a peddler arrives at the scale, he is told to get his safety gear before he proceeds to unload his scrap,” Bateman says. “When he returns to get paid, he deposits the hard hat and glasses in the container next to the cashier’s window.”
Despite locations with large customer volume across the scale every day, Mervis doesn’t lose much safety gear, Bateman says. Even if the firm did, he takes a pragmatic view. “If a peddler was stealing from us, we’d deal with it immediately and decisively. He would not be back,” he says. “Our goal is to treat safety issues in the same way: No exceptions.”
Customer safety education can extend beyond posting and enforcing safety regulations on site. If you work with industrial customers who are in your yard regularly, you can train them and expect them to conform to your rules and requirements, says John Hayworth, national environment, health, and safety director of Metal Management Inc. (Newark, N.J.). “You have a lot more assurance that they will obey the rules, and if they don’t, you have other routes to apply additional pressure,” he says.
Separate for Safety
Some operations further distinguish industrial customers from over-the-scale peddlers in their level of access to the scrapyard. “Industrial customers have a lot more experience and safety sense,” Bateman says, “because they are in the yard more frequently, know what to expect, [and] understand the hazards and where to go and where not to go.” In contrast, he says, “peddlers are often in our yard for the first time and don’t really understand our operation, so we want to put them as far away from the hazards and the industrial traffic flow as possible.”
One Mervis operation divided the unloading areas for industrial customers from those for retail customers or peddlers about a year ago. “The guy with the pickup truck with no tailgate is unloading his scrap in a completely separate area from the big trucks unloading adjacent to our equipment,” Bateman says. This strategy can have multiple benefits, McNally notes. “Having peddler traffic all in one place makes it easier to enforce controls,” she says—and “it can make the scrapyard more efficient.”
Bateman agrees. “At first we had some concern that it was taking a lot more time and we were going to be double-handling scrap,” he recalls, but “we found that the separation resulted in a more efficient flow of the industrial scrap and a much safer environment in the peddler area, more than making up for what little extra handling we had to do on the retail side.” Prior to this separation, he says, “it would take as long to unload a single junk car being hauled behind a pickup as it would to unload a full semi of crushed cars.”
Adapting to Fit
Of course, making that kind of separation depends on the size of the yard and the availability of land. Bob Kaplan, vice president of Metals Reduction Co. (St. Paul, Minn.), acknowledges that his is a small yard, thus it has a different approach to keeping its customers safe. “Because we’re so small and we have so much going on, we have to put a lot of time and effort into being organized, clean, and safe—and it works,” he says.
“We have four unloading spots, and the spot to which a customer is sent is determined by the material on the truck,” he explains. “At each of the four areas we unload one truck at a time and have designated waiting areas at each location. Our yard foremen direct traffic and keep everyone in line.”
Metals Reduction prefers that peddlers unload their trucks by hand, but Kaplan says the company will use a crane if an item is big. When that happens, it requires the peddler to move a safe distance from his truck. “We’ve had only one customer accident in 15 years,” he says, “and we learned a lesson: Regardless of the situation, keep drivers away from their rigs when they’re being unloaded.”
Because of the vast differences in scrap operations, each facility will need to find its own combination of strategies to ensure customer safety. “If each yard were the same, it would be easy to establish a best practice,” says Metal Management’s Hayworth. “I’ve got 50 yards, and no two of them are the same. None of them accept and handle peddler scrap in the same way. Even though we try to standardize our operations, there’s still the element of an individual location adopting what works best.”
Boynton has come to the same conclusion. “A year ago I thought we could create a best practice so that every yard could [control customers] the same way,” he says. “Today I don’t think that is possible. Each yard needs to adopt the approaches that work for it. There are numerous ways to solve the problem; the big thing is, you have to do something. You have to step up and commit to tighter customer controls.”
Employee Training
Even the best warning signs and safety procedures can’t take the place of alert, trained employees who are willing to speak up when they see customers engaging in unsafe behavior. “We stress the need to watch out for our customers, particularly the new ones who have no idea where they’re going or what they’re doing,” Bateman says. “Our folks have to take the time and make the effort to direct those people—to let them know you can go here, but you can’t go there.”
A new ReMA DVD, Working Safe and Smart: Visitor Control, can help companies teach employees about customer control. The video “stresses that regardless of who you are and what your position is within the company, you are accountable for customers,” Boynton says. “If you see a customer wandering away from where he should be, stop what you’re doing and handle the situation immediately.”
To reduce customer injuries, “scrapyards are going to have to have a customer control plan in place and owners are going to have to insist that their employees enforce it,” McNally says. It will take “a change in mindset for owners,” she says, from “business as usual—letting customers do what they choose”—to customer control.
This shift “may cause some consternation with some customers in the beginning,” she says, “but at the end of the day, they will be safer on your premises. You can educate the customer as to the importance of his safety, and in the end, everyone is going to win.”
Keeping Customers Safe
Barney Boynton, ISRI’s director of safety outreach, offers these recommendations for protecting scrap customers:
Establish and post rules. Hang a prominent sign listing the rules and requirements at the entrance to your facility. Upon entry, give each customer a copy of the rules, a site map illustrating unloading areas, and an acknowledgement-of-risk statement. You might need to make this available in more than one language.
Track entrances and exits. Scrap processors have been sued for damages when they weren’t sure the incident occurred on their site. Have customers sign in as they arrive and sign out as they leave. If an employee observes an injury and/or vehicle damage, make sure to document the details.
Direct the flow. Make it obvious through signage where customers should go to unload, or use employee escorts to direct customers to the right areas in the plant.
Restrict dangerous areas. Ensure such areas are well-marked with signs and warnings that identify and prevent access to them.
Separate customers and equipment. This is the most important step a scrapyard can take to protect customers. Create a separate area for them to unload their scrap, and keep that area free of material handling equipment during business hours. If you must use such equipment to unload heavy items, get occupants out of the visitor’s vehicle and into an enclosed area.
Jim Fowler is retired publisher and editorial director of Scrap.
Publisher’s Note: ISRI’s new DVD Working Safe and Smart: Visitor Control was scheduled for release in late April. ReMA is mailing a complementary copy to each member. You can purchase additional copies from the ReMA Store (www.isri.org) for $50 (ISRI members) or $150 (nonmembers).
For more information on ReMA safety resources, contact John Gilstrap, director of safety, 202/662-8515 or johngilstrap@isri.org; Barney Boynton, director of safety outreach, 207/428-3928 or barneyboynton@isri.org; or Anne Marie Horvath, safety program manager, 202/662-8511 or annemariehorvath@isri.org.
The growing numbers of customer injuries—and related liability suits—mean it’s time to get serious about controlling visitors in the scrapyard.