It is difficult to know the precise cause of the explosion at a chemical warehouse at the Port of Tianjin, however to any logistician familiar with the business of hazardous materials it can hardly come as a surprise.
The chemical logistics sector in China has grown at a pace that parallels the dramatic expansion of the economy in general. It supports what is now a very large chemical production infrastructure composed of global manufacturers and to a lesser extent the major Chinese oil corporations, with the latter particularly focussed on up-stream bulk petro-chemicals.
As is often the case in China, the presence of global corporations is supported by local logistics providers. There are major global logistics providers present at locations such as Tianjin, for example Royal Vopak has a large chemical terminal at the port, however much of the handling of material landside is in the hands of local Chinese companies. In this case the company being accused of causing the accident – although at present there can surely be little evidence- is ‘Ruihai International Logistics’, which was founded in 2012 and is reported by the South China Morning Post as having a capitalisation of RMB100m (US$15m). It was licensed to handle hazardous material in 2014. There is some dispute over who owns the company with suggestions that the real owners are the family of the local police chief.
Chinese ports are not primitive places. They often have highly sophisticated port management infrastructure that draws on global best practice. Tianjin port is a centre of chemical production and logistics of national importance, surpassed only by the numerous production centres along the Yangtze Valley which is the core of the country’s chemical industry. However handling hazardous cargo is one of the most complex challenges that any major logistics facility can face and its management places huge demands on the infrastructure available.
Even the smallest warehouse must have a combination of dedicated storage areas for different categories of material which can be isolated, as well as in-house fire detection and suppression systems. It is also highly advisable that the facility is built on top of a clay ‘bund’ which will prevent any material spilling out of the facility. These capabilities alone are expensive.
In addition the management of the warehouse must have a detailed understanding of the materials they are working with, including matters concerning packaging, and the discipline to enforce the rules on them. The temptation to mix different types of materials or mishandle them during logistics operations is very great and is frequently the cause of major and minor accidents.
The port itself also has to have a highly developed hazardous material emergency response capability. This invariably includes a dedicated fire-brigade highly trained in handling chemical fires. Tianjin Port does possess a fire-fighting capability, however the staff appear to be have been untrained and have been described in some reports as “migrant workers”. It appears that many of the port’s firemen were killed by the explosion or the effects of the subsequent fire.
The history of logistics in the chemical sector in the West has been painful. Catastrophic explosions have accounted for thousands of lives since the industry’s establishment in the 1890’s. Many of them have involved chemical warehousing or transportation. This experience has led to the evolution of a sophisticated culture of materials handling. Such a culture takes time to develop. Of course China could have accessed such expertise by permitting a greater presence of global logistics providers in its markets. The price of not doing so can be seen at Tianjin.
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)