Mastering Compliance: Regulatory Requirements for 3PLs

3PL warehouses are under scrutiny for many regulatory requirements, including transportation, import/export rules, data privacy and security, environmental mandates, and more. Here, we share practical insights to ensure you enjoy smooth processes, uphold data integrity, meet environmental standards, and successfully master compliance.

Understand Certifications

Certification can attract clients in a specified industry. While expertise in a specific sector creates a niche, a business plan, training programs, and certifications are required to act as a 3PL for your clients. Working with certifying bodies helps you put the proper procedures in place to meet certification standards. This will avoid issues should an audit take place.

Shipping Documents for Transport of Dangerous Goods

The Transportation of Dangerous Goods (TDG) Act and Regulations legislate the handling, storage, and transportation of goods classified as dangerous. The most critical shipping clauses of the act for 3PLs include the following:

• Consignors must prepare and give carriers a shipping document before the goods are transported
• Carriers cannot transport goods without a shipping document
• Carriers are considered in possession of the goods from pick to delivery to the destination, during which time the shipping documents must be available
• If the carrier transports the goods to another carrier, the shipping document must be given to the new carrier
• Once possession is given to another carrier or receiver, the document identifying the type of dangerous goods must be given to the persons receiving the goods

The information on the shipping document must include all relevant information, including:

• The class with specifics related to the danger, such as explosive, toxic by inhalation, etc.
• The 24-hour contact information to reach in case technical information is required stating “24-hour number” to avoid violations
• The name and address of the place of business in Canada of the Consignor
• The Consignor’s certification

The description of the goods must be in the following order to avoid violations:

• UN number
• Shipping names (as listed in Schedule I)
• Class
• Packing group

Understanding Storage of Dangerous Goods and Hazardous Materials

Dangerous goods/hazmat fulfillment requires special handling and care when picking, packing, and shipping dangerous goods. Best practices for compliance include:

• Using a separate and approved hazardous material storage area with an appropriate fire rating and climate control based on specified requirements for the goods
• Safety signage warning of hazardous material storage
• EPA, OSHA, and specified regulatory containers designated safe for the product with appropriate labeling
• Storage a safe distance from sources of heat or ignition
• Avoiding specific risks such as direct sunlight, moisture, or fluctuating temperatures
• Temperature monitoring

Remaining Compliant with Product Disposal/Destruction

The disposal and destruction of goods stored in your facility are managed according to federal, provincial, and municipal regulations. As a result, you require a plan with oversight from the proper authorities to ensure you fulfill your legal obligations to manage these procedures effectively. For example, in the case of recalls, your team is responsible for properly managing disposal. A warehouse management system (WMS) makes the process easier, allowing you to enter lot numbers, find the storage area and remove the items from inventory for disposal or destruction.

Understanding Import and Export Controls

The rules and regulations surrounding import and export include several tariffs rates, quotas, and duties, including:

• Supply-Managed Tariff Rate Quotas
• United States Origin and Miscellaneous Exports
• Canada-European Union Comprehensive Economic and Trade Agreement (CETA) Quotas
• Section 321 Entry

Quotas allow specific quantities of products to receive preferential tariff treatment based on certain conditions. Also, regulations such as Section 321 Entry allow retailers to ship up to $800 worth of goods duty-free across the U.S. border daily. Ensuring you are fully aware of all applicable export and import control regulatory requirements ensures you remain compliant while potentially helping your clients save money.

Compliance for Data Privacy and Security

These regulations are particularly significant for 3PLs involved in direct-to-customer fulfillment for clients such as e-commerce companies. Federal, provincial, and territorial privacy laws apply, including cross-border transfer of information. Your main concern in this area is the Personal Information Protection and Electronic Documents Act (“PIPEDA”) mandating the management of customer personal information. It becomes even more complicated because Alberta, British Columbia, and Quebec have their own private-sector privacy laws. Repeals are also underway and can occur at any time, introducing new consumer protective legislation, including considering potential harm using artificial intelligence systems.

Deploying WMS for Compliance

Using a warehouse management system can help you remain compliant. Your system is your backup during audits, providing the critical information required for regulatory purposes. It also streamlines both inbound and outbound processes to improve accuracy for simplified monitoring and management, ensuring products are received and placed correctly in a compliant storage location. You can then find those items and follow the proper packing process with shipping documents completed per regulations. Recalls are also simplified by searching items by lot number to remove them from inventory as quickly and safely as possible.