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Monday, August 17, 2015 4:21 PM

Huge Shipping Delays for Toyota, Deere, Walmart, etc. in Wake of Tianjin Warehouse Explosion

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In the wake of the gigantic Tianjin warehouse explosion on August 12 (See Massive Fireball Explosions in Chinese Port City of Tianjin Kill 17; Video Footage, Images, Logistics, Reader Anecdotes) repercussions are still being felt.

Reader Tim Wallace writes "This could have an interesting impact. Peak shipping season should be going full bore right now out of China. Companies impacted will include Walmart. Diversion to other ports always costs more money. Fortunately I ship out of Yantian and HK."
3PLs Eye Alternatives

SupplyChain 247 writes 3PLs Eye Alternatives Due To Severe Road Access Limits Following Tianjin Explosion.

Third-Party Logistics providers and shippers are looking to re-route cargo to other Chinese ports following Wednesday’s devastating explosion at the port of Tianjin.

The vessel access channel to the port is now open again to two-way traffic, one terminal operator confirmed to The Loadstar, but attention has now turned to access roads that have remained closed or subject to diversions, which lead to the port’s numerous box terminals.

Several forwarders reported that they expect the nearby ports of Dalian and Qingdao, some eight to nine hours away by road, “will bear the majority of the burden”.

One major 3PL confirmed that “all ocean export and import operations via Xingang/Tianjin are suspended, which may last for a week or longer”. The source added that it was anticipating news of cargo damage and was in close contact with customers, and had a contingency plan in place.

“3PLs and shippers are looking at alternative ports such as Dalian and Ningbo, which will be costly as we need to truck these boxes on roads which are closed. “It may take three to four weeks to resume to normalcy.”

One of the biggest problems, reported one company active in the city, is that the one-stop logistics centre was heavily damaged. “It’s where everyone got their paperwork done.

“That’s where the whole community – forwarders, hauliers and the rest – were doing all the other administrative activities. It was very efficient, and now companies have to go directly to their respective individual terminals to get this done.”

There remains doubt as to whether the individual terminals have the administrative infrastructure to deal with the upsurge in paperwork in the interim period.

Companies affected included Volkswagen and Toyota, which lost cars waiting to be shipped. The Wall Street Journal reported that GSK, Airbus, Wal-Mart and Deere & Co were among multinational companies that operated factories or distribution centres in the area.

At least 50 people died in the blast, while hundreds were injured.
Confusion Mounts Over Ownership

The Financial Times reports Confusion Mounts Over Tianjin Warehouse Ownership.
China is awash with confusion over the true ownership of the hazardous goods warehouse that exploded in Tianjin last week even as the Communist party seeks to assure the public there will be no cover-up.

Identifying owners of businesses in China has been complicated since exposés of the family wealth of the Communist party’s most powerful leaders led to greater restrictions on corporate ownership registries.

The task is further complicated by the practice of individuals legally holding shares on behalf of other, unnamed but more powerful, people, often on the basis of a verbal agreement.

Adding to the speculation, Tianjin’s online corporate registry database was inaccessible for four days after the blasts. When access resumed on Monday, a search for Ruihai Logistics yielded a curious gap.

The company was registered in 2012 but its current legal owners only bought their shares in 2013. The historic list of changes that should have reflected the previous owners did not appear.
Spectacular Explosion

Link if video does not play: Tianjin Warehouse Explosion

Mike "Mish" Shedlock

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