The Top HazMat Violations that Could Cost Your Company Thousands

The Cost of Complacency

If you’re running a business that ships hazardous materials and you’re not obsessing over compliance, you’re playing Russian roulette with your company’s future. It’s not a matter of if you’ll get caught, it’s when. And when that happens, it’s not just being on the Department of Transportation’s radar. You’re looking at six‑figure fines, lawsuits that can gut your company, and carriers cutting you off and canceling future contracts. The harsh truth is that most companies have no idea they’re doing things wrong until the penalty letter lands on their desk or, worse, when an accident occurs. The violations the DOT sees over and over again are mind‑numbingly preventable. Yet companies keep making the same mistakes, either because they don’t care or because they don’t know better. If you’re reading this, you no longer have that excuse.

We’re diving deep into the most common and most expensive hazmat violations—ones that will absolutely wreck your bottom line if you’re not careful. These aren’t obscure infractions buried in some 800‑page manual. They’re blatant. They’re obvious. And they are costing companies thousands, if not millions. This post is your wake‑up call. Because if you think compliance is expensive,  noncompliance is worse.

Training: The Easiest Thing to Get Right—and the Most Common to Get Wrong

When it comes to hazmat compliance, employee training should be the first box every company checks. And yet, it’s the most frequently ignored. The number one question any DOT inspector will ask is, “Show me your training records.” If you can’t do that, the audit might as well be over. You’ve already failed. Why is this such a big deal? Because an untrained employee is a liability waiting to happen. They won’t pack shipments correctly, label them properly, or even recognize what’s considered hazardous. 

According to the 2022 Annual Civil Penalty Report, PHMSA collected over $1.3 million in civil penalties from 103 enforcement cases and 188 tickets in that year alone—many of which stemmed from training lapses and misdocumentation. That’s not a statistic; that’s an epidemic. Companies either don’t train, or they forget that recurrent training is required every three years under 49 CFR 172.704. So many companies have been hit with five‑figure penalties simply because their documentation was sloppy or out of date.

Consider the case of a mid‑sized electronics distributor in Texas. They had never conducted formal hazmat training. When their packages were flagged during a random FAA inspection, the entire operation came under scrutiny. Not only were they cited for lack of training, but inspectors uncovered multiple mislabeling and packaging issues, all stemming from employee ignorance. The final tally? $74,000 in penalties. And that’s not counting the cost of downtime, legal fees, and damage control with their clients.

Skipping training doesn’t save money. It bleeds it. If your team isn’t properly trained, you’re not just non‑compliant, but dangerous. And DOT doesn’t look the other way when danger is involved.

To access useful training resources and publications, visit PHMSA Hazardous Materials Training Publications.

Undeclared Shipments: The Time Bomb in Your Supply Chain

If training violations are the most common, undeclared shipments are the most financially devastating. This is where the DOT stops being lenient and starts swinging the hammer. An undeclared shipment is exactly what it sounds like: a package containing hazardous materials that isn’t marked, labeled, or documented as such. It’s an invisible threat. And the consequences can be catastrophic.

Lithium batteries are a perfect example. They’re the most frequently shipped hazmat by air, and they’re also among the most volatile. When shipped undeclared, they’re a ticking time bomb. For instance, in 2020 the FAA fined U.S. e‑commerce sellers $1.1 million for undeclared lithium shipments. In another case, a Hong Kong company was penalized $160,500 for shipping lithium‑ion batteries undeclared.

The reason these violations are taken so seriously is simple: communication is the bedrock of hazmat safety. If emergency responders don’t know what’s in a package, they can’t respond appropriately. In the air transport sector especially, the stakes are astronomical. A single box of undeclared lithium batteries could compromise an entire aircraft.

Experts note that the most frequent cause of undeclared shipments is simply a lack of knowledge of proper requirements. One misstep can wipe out a year’s profit. The cost of a few labels and a shipping declaration is pocket change compared to what’s on the line. 

Civil Litigation: When Fines Are Just the Beginning

Think government fines are the endgame? Think again. The real financial kill shot comes from civil litigation. If your hazmat violation causes injury, death, or significant property damage, you’re not just writing a check to the DOT. You’re lawyering up and bracing for a legal battle.

Civil cases don’t come with caps. There’s no ceiling on the damages a jury can award. And in a world where juries are increasingly sympathetic to injured parties and hostile to negligent corporations, the numbers skyrocket fastt. Just look at what happened to a battery manufacturer in California. They shipped lithium‑ion batteries in non‑compliant packaging. One caught fire during transit, causing an injury to a warehouse employee at the distribution hub. DOT handed down a $58,000 fine. But that was just the beginning. The injured employee sued. The jury awarded $1.2 million in damages. All because the packaging didn’t meet the spec.

Civil litigation often dwarfs enforcement penalties. DOT might want you to fix the problem. But a civil court wants payment. And they’ll get it, especially if you’ve ignored training, labeling, or packaging standards. You don’t just look negligent. You are negligent. And the legal system treats you accordingly.

For more on how much courts can levy, check out FAA proposed penalties overview.

Carrier Cutoff: The Silent Killer of Your Business

Here’s a penalty no one talks about until it’s too late: being blacklisted by your carriers. FedEx, UPS, DHL—they’re not obligated to keep picking up your packages if you keep screwing up. And when they cut ties, it’s not with a fine or a warning. It’s with silence. One day they just stop showing up.

Carriers are legally on the hook if they accept non‑compliant hazmat packages. So if you become a risk, you’re done. For example, one company shipped improperly labeled corrosive liquids. After repeated warnings and a failed corrective action plan, their primary carrier dropped them. No negotiation. No appeal. Just gone. That company spent six months scrambling to find a replacement and never fully recovered its shipping capacity.

This is the unofficial enforcement mechanism, and it’s tough. Because when carriers cut you off, your supply chain grinds to a halt. Customers don’t get their products. Deadlines are missed. Contracts are lost. And good luck explaining to a client that you couldn’t deliver because you got booted by FedEx.

This is a penalty that doesn’t show up in PHMSA stats, but it’s every bit as serious. You can recover from a fine. You can settle a lawsuit. But when your logistics pipeline collapses, that’s a death sentence for a company. Don’t give your carriers a reason to walk. Because once they do, the damage is done.

Get Compliant or Get Crushed

Hazmat compliance isn’t some bureaucratic hoop to jump through. It’s survival. The violations we’ve covered—training, undeclared shipments, civil litigation, and carrier shutdowns—aren’t rare. They’re rampant. And they’re financially lethal. Companies that treat compliance as an afterthought are gambling with everything they’ve built. The DOT doesn’t care about your excuses. Civil courts don’t care about your intentions. And your carriers don’t care about your promises.

The smartest companies aren’t the ones that never make mistakes. They’re the ones that take those mistakes seriously, get out in front of them, and build systems to ensure they never happen again. If you want to avoid the thousand‑dollar fines or the million‑dollar lawsuits, you need to treat hazmat compliance as a core business priority, not a nuisance.

Because when the fallout hits, it doesn’t just cost you money. It costs you credibility. It costs you business. And if you’re not careful, it could cost you the company.

Do you have questions about your compliance practices or training? Schedule a call with an expert today!