The devastating explosions in the Chinese port of Tianjin last week have highlighted risks associated with the trend for bigger container ships, according to the International Union of Marine Insurance (IUMI).
The IUMI said the disaster, which claimed the lives of at least 114 people and injured hundreds, represented an increase in “accumulation risk”, where a single event causes an exceptionally large group of related losses.
“In the marine sector the continuous growth of this type of large-scale risk is being driven by the trend for bigger container ships and the construction of extensive freight and handling storage facilities,” said the IUMI.
The IUMI said more than 10,000 motor vehicles were destroyed by the blast, while insured losses have been estimated at potentially more than $1.5 billion (£958 million) by Fitch Ratings.
IUMI president Dieter Berg said: “This extremely sad and regrettable incident demonstrates the persistent growth of accumulation of values in port and storage areas, particularly in highly industrialised regions.
“Recent examples include the floods in Thailand in 2011 and Hurricane Sandy on the East Coast of the United States in 2012 that caused the biggest marine catastrophe loss ever.”
The explosions took place on 12 August in a warehouse for dangerous materials owned by Rui Hai Company, located at the Tianjin Port International Logistics Centre. A massive clean-up operation is currently under way.
In a statement Tianjin Port Development Holdings, which operates the port, said based on a preliminary assessment it did not expect the incident to cause any material loss to the group and “currently the port operations of the group are normal”.
Inchcape Shipping Services said most tanker operations at the port have been put on hold due to restrictions issued by the Tianjin Municipal Transport Commission as part of a crackdown on the handling of hazardous materials, while vessels carrying non-hazardous goods are using the port as normal.
Expert Analysis on Tianjin Blast
Dr Jean-Paul Rodrigue, Global Studies and Geography Professor at Hofstra University, New York, has appeared on English-language Chinese State broadcaster CCTV America to discuss the impact of the recent Tianjin Port explosion in China.
In the interview, Dr Rodrigue states that Tianjin’s terminals have not been impacted, while a huge logistics area at the port – which mainly stores containers and automobiles – has been badly affected, meaning Tianjin has lost significant logistical capability.
An early ramification of the explosion is companies removing their operations at Tianjin for the foreseeable future.
Dr Rodrigue also argues that it is too early to review the full damage caused by the blast and that it will take weeks before we can fully take stock of the situation, mainly due to myriad supply chains being connected to the port which take time to unravel.
Sourced from http://www.porttechnology.org/news/list/
Anatomy of a Port Disaster: The Tianjin Port Explosions Featured
- Written by JEAN-PAUL RODRIGUE
- Published in Members News
- Read 200 times
Successive explosions at the port of Tianjin, the third largest in the world in terms of tonnage and the 10th largest in terms of container volumes, resulted in deadly blasts in the Chinese port city.
PortEconomics member Jean-Paul Rodrigue, describes the anatomy of the disaster - and provides his input during an inverview on the national Chinese national television (CCTV) on August 17 on this topic.
Anatomy of a Port Disaster: The Tianjin Port Explosions
by Jean-Paul Rodrigue
"Ports are significant consumers of land involving terminal operations as well as port-centric logistics activities, which are generating large volumes of cargo flows and the need to store this cargo temporarily. The port of Tianjin is the third largest in the world in terms of tonnage and the 10th largest in terms of container volumes. It is a massive industrial and petrochemical complex accounting for about 40% of all Chinese vehicles imports and exports. On August 12 2015 two subsequent explosions at the Ruihai Logistics facilities dedicated to the storage and handling of hazardous materials took place, resulting in the complete destruction of adjacent facilities and their stored cargo (mostly container yards and automotive storage facilities that involved close to 10,000 destroyed or damaged vehicles). Significant damage within a radius of 1 km (or more) also took place depending on how the infrastructure was positioned in relation to the explosions (such as blasted windows and damaged roofs). A rail transit station on the other side of an adjacent major highway was also severely damaged and the transit line it serviced was closed. More than one hundred people were killed by the blast, including firefighters that were on site trying to extinguish the fires. The port terminals were not damaged by the explosions, which took place in an area dominated by logistical activities (particularly empty container depots) as well as automotive storage. Port activities were shut down for a day but resumed afterwards.
The industrial incident triggered serious concerns because of large amounts of sodium cyanide being stored on site at the time of the explosion, which involved the risk of contamination and permanent evacuation for nearby residential areas. Several compounding factors have exacerbated the severity of the incident to the level of a transportation disaster.
- Improper handling of the cargo before and during the incident. The cause of the fire that triggered the explosion is most likely the outcome of a failure in properly handling hazardous materials. The situation may have been exacerbated by firefighters not well informed about the chemicals stored on site.
- Lack of knowledge by the authorities of the nature and extent of the hazardous materials being stored on site. The land where the hazardous materials were stored is leased from the port authority of Tianjin and subject to standard regulations and reporting related to industrial land use. However, it appears that Ruihai Logistics did not fully comply to such regulations which in turn were not fully enforced by local authorities. The port oversees thousands of tenants operating very different activities and the fast growth of the port of Tianjin in recent years (as well as for Chinese ports) has made port management increasingly complex.
- Incompatible land uses in port area. Under normal circumstances, residential areas and freight intensive activities are not compatible and should not be located in proximity. As the above map illustrates, there are significant residential areas in close proximity to the hazardous materials site. This proximity appears in conflict with Chinese environmental law. The site was approved for handling hazardous materials only a few months before the explosion, implying that it has been operating informally beforehand.
Source:Basemap adapted from Google Earth
The economic consequences of this industrial accident are difficult to assess and are contingent upon the level of contamination and how extensive the contaminated area is going to be. As stated before, the port's major infrastructures were unaffected and the area where the disaster took place was dominantly devoted to container storage, stuffing and de-stuffing as well as automotive storage. These activities can be relocated relatively easily and are not particularly capital intensive (their major inputs are space and labor). Still, the port temporarily lost a share of its logistical capabilities since the contents of containers needs to be processed, an activity that does not take place within terminals, but in port-centric logistics zones.
More complex is the outcome on neighboring residential and commercial activities (including a civic center and a major sport stadium), which are likely to be seriously impaired and see their real estate value plummet. Traffic disruptions are also to be expected because of the closure of a major highway servicing the port area. It is possible that maritime shipping companies elect to divert some services and cargoes to nearby ports such as Qinhuangdao, Qingdao or Dalian. This will result in longer and more expensive inland transportations. The industrial accident underlines the complexity of port and logistical operations and the risk related to the storage of hazardous materials in such a setting."
Four New Fires At China Blast Site, Widespread Safety Hazards Found
Four new fires have broken out at the site where two huge blasts last week killed 114 people, state media reported on Friday soon after officials said safety hazards were found at almost 70 percent of firms handling dangerous chemicals in Beijing.
The explosions in a warehouse storing dangerous chemicals devastated an industrial park in the northeastern port city of Tianjin late on Aug. 12. More than 700 people were injured and thousands were evacuated because of the risk posed by chemicals stored at the site.
The official Xinhua news agency said on Friday rescue crews were rushing to the site after four new fires broke out. It said one of the “combustion points” was in a logistics site for automobiles near last week’s blast.
The other three were within the central blast area, it said without giving any explanation of the cause of the fires.
Credits: @RT_com/Twitter
State authorities have confirmed that more than 700 tonnes of the deadly chemical sodium cyanide were stored at the Tianjin warehouse that blew up.
Nationwide inspections of facilities handling dangerous chemicals and explosives were ordered by China’s State Council after the blasts last week.
More than 100 chemical firms across seven provinces have been told to suspend operations or shut down due to safety violations in the recent days, announcements by regional governments show.
That includes 19 companies in Hubei province, 26 firms in Anqing city in the southeastern province of Anhui, two in the capital, Beijing, and 39 in Zhejiang province.
In Beijing alone, an inspection of 124 sites that stored dangerous chemicals found hazards at 85 firms, Xinhua said late on Thursday, citing Beijing’s work safety bureau.
THOUSANDS OF DEAD FISH
The State Council said in a statement on Thursday that advanced equipment and the best expertise must be used to prevent major environmental incidents in the future.
Pictures taken by Reuters on Thursday showed workers scooping thousands of dead fish out of the Haihe river near Tianjin, a day after authorities had declared the city’s drinking water was safe.
Tianjin officials said the dead fish were caused by regular seasonal low oxygen levels in the water and were not related to the blasts.
Authorities however have also warned that cyanide levels in waters around Tianjin port, the world’s 10th-busiest and the gateway to China’s industrial north, had risen to as much as 277 times acceptable levels.
The blasts at Tianjin also prompted a nationwide review of China’s industrial safety record, which has struggled to keep pace with the breakneck speed of China’s economic growth.
China has struggled in recent years with incidents ranging from mining disasters to factory fires, and President Xi Jinping has vowed that authorities should learn the lessons paid for with blood.
Executives of Tianjin Dongjiang Port Ruihai International Logistics, the firm whose warehouse exploded, have said they used connections to obtain safety approvals. The site was found to be too close to nearby homes. {ID:nL3N10U37W]
Inspectors carrying out the safety reviews in Beijing found that security personnel at a branch of Sinopec Corp, Asia’s largest refiner, were unfamiliar with how to handle an oil tank fire, Xinhua said. Employees were also found smoking in dormitories near the facility, it said.
“Companies that fail our inspections will be ordered to suspend operations, and their warehouses will be put under 24-hour surveillance,” Xinhua quoted Qian Shan, vice-head of the Beijing work safety bureau, as saying.
Despite the infractions found at the Sinopec branch, Xinhua did not say that the facility would be shut.
Beijing has also suspended operations at firms that make or deal in highly toxic chemicals and explosives from Aug. 17 to Sept. 6 in preparation for a military parade and athletics event, Xinhua said.
On Wednesday, three oil and gas firms close to residences were told by authorities in the cities of Hangzhou and Shenzhen to halt operations.
(By Brenda Goh, Additional Reporting by Michael Martina in BEIJING and Sue-Lin Wong and SHANGHAI Newsroom; Editing by Paul Tait)
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