In the wake of the Tianjin explosions, Jason Jiang looks at China’s hazardous cargo sector.
On August 12, Tianjin Port International Logistics Center suffered massive explosions, which killed at least 145 people and caused severe damages to the surrounding area. The explosions, which were visible from space, originated from a chemical storage facility operated by Ruihai International Logistics, a logistics provider for hazardous cargo.
The blasts have exposed the poor supervision of the highly lucrative trade in hazardous chemicals. Chinese prosecutors accused 11 senior officials from the municipal transportation commission, the port operator, work safety agencies, the local planning administration and the Tianjin customs office of negligence over the deadly blasts.
Several other chemical plant blasts and fires occurred shortly after the Tianjin explosion, including two in nearby Shandong province on August 22 and August 31 that killed 14 people. Both Shandong blasts took place in newly developed local chemical parks.
Following the explosions, safety concerns have been raised for the hazardous cargo storage sector. In response to these concerns, China’s State Council has pledged to launch a nationwide inspection of businesses engaged in dangerous chemicals and explosives and ordered local governments at all levels to strictly enforce regulations in the safety zones around industrial projects handling hazardous materials, and to firmly implement regulatory measures for highly toxic chemicals.
Miao Yu, minister of industry and information technology, said at the end of August that nearly 1,000 chemical plants across the nation are planning to improve safety, possibly involving RMB400bn ($62.8bn) of relocation costs.
Shanghai Gangcheng Hazardous Substances Logistics Company, a subsidiary of Shanghai International Port Group (SIPG), has moved its main storage yards from Pudong to the less populated Luchao port area in September.
Supply chain technology company, Elementum, said the potential relocations of chemical plants in China could push prices up for chemicals and make them more scarce.
According to a report from another supply chain technology firm, Resilinc, the Tianjin explosion could create logistical delays and other supply chain problems for months to come, even as operations at the port itself return to normal.
According to an official from China Chemistry Industrial Association, some chemical product prices have gone up following the Tianjin explosions, and the situation is expected to last for several months.
According to Chai Baoshen, secretary general of the China Association of Warehouses and Storage (CAWS), China has become the second largest country in the world for manufacturing hazardous products, however, the market is not well regulated.
Chai says hazardous cargo storage is a highly profitable business, and the current hazardous cargo warehouses are not enough to meet market demand, which has lured lots of logistics firms which have little experience in handling hazardous cargo into the sector.
“There isn’t state-level professional certificates for the workers in the hazardous storage sector, each region makes their own standards but it varies a lot,” Chai says.
“For now, the pressing matter for the authorities is to establish standards in all the segments of the industry, including production, distribution and storage,” Chai warns.
This article first appeared in the recently published latest issue of SinoShip magazine. Readers can access the full magazine for free by clicking here.