Transporting chemicals is a dangerous business, requiring maximum control of the processes throughout, visibility at every step and a secure, reliable safe mode of transport, however there is a lack of legislation around the sector. Riad Mannan writes
Across the Middle East, the increased use of chemicals in the production of goods has spurred a growing demand for chemical logistics. This includes the storage, pick-up, road transportation and delivery of hazardous, non-hazardous, organic and inorganic chemicals from suppliers, through distributors to end manufacturers and sellers.
In a recent report, Technavios analysts forecast the global chemical logistics market to grow at a compound annual growth rate of 5.48% in the five years to 2019. This creates huge opportunities for specialist logistics service providers (LSPs) in this region as a lot of chemical movements will be through and in-between the Middle East countries.
Unlike the transportation of other materials, the movement of chemicals has its own unique challenges. These would come under what is understood to be Dangerous Goods (DG) materials capable of posing significant risk to people, health, property or the environment when transported.
It is not just the movement itself; its the method of movement, the carriers, the knowledge of the drivers and the security of the load. Additionally the transportation of chemicals requires maximum control of the processes throughout, visibility at every step and a secure, reliable safe mode of transport. Underpinning all of these operational activities are national and international regulations, standards and compliance challenges.
As a result, chemical manufacturers and users have turned to specialist third party logistic service providers to store, handle and transport raw materials, intermediates and finished chemical products, in a safe a reliable manner. One of the key players in the market is RSA-TALKE, which is a 50:50 joint venture between Dubai based logistics company RSA Logistics and the German chemical logistics specialist ALFRED TALKE Logistic Services. In a recent interview with Logistics News Middle East, its chairperson, Richard Heath spoke about the key challenges of transporting chemicals around the region.
The standards in the region are, to a large extent, lagging behind other international regions especially when it comes to quality of equipment and safety on the road. A key element of this is the lack of unified legislation for the transportation of dangerous goods, which can range from being limited to certain areas, to being entirely non-existent in others, he says.
Another specialist chemical logistics provider, Agility Global Integrated Logistics, highlight two other challenging areas. Riccardo Tonelli, regional director of Chemical Logistics at Agility says: Challenges that we face often include ensuring we meet international safety standards, and border delays due to outdated customs processes. These are particularly challenging in emerging markets where policies and procedures are still being established and evolving in line with market growth and development. However these two areas are being critically looked at by authorities, producers and logistics services providers.
Safety challenges and assessments
Logistics companies have to work in an incredibly safe environment when freight forwarding, transporting, storing or handling chemicals. The safety risks are greater than when dealing with any other materials except those within the nuclear industry. Major risks include the risk of explosions, chemical reactions, fire and smoke, poisoning and accidental leaks into the environment. The major causes of these can be faulty tankers, material mishandling, driver error or a combination of them. The effects can be huge, not just on the immediate one, but costly ones too as penalties may apply to the transporting companies. Therefore it is no exaggeration to say that safety is the number one priority for companies involved in chemical logistics.
The Gulf Petrochemicals and Chemicals Association (GPCA) which represents the downstream hydrocarbon industry in the Arabian Gulf, have led a drive to improve the chemical logistics safety record. In 2014, they launched the Gulf SQAS (Sustainability and Quality Assessment System) initiative which is a system to evaluate the environmental, health, safety, security and quality performance of logistic service providers particularly in relation to chemical logistics. The initiative has gathered a lot of attention amongst the regional industry, regulators, transporters and Certification Bodies alike.
As Heath explains: The system offers chemical logistic service providers the opportunity to identify the gaps between their operations and best practices and create a continuous improvement plan that they can work on. It is supported by almost all major chemical manufacturers in the region and moving forward it will become a precondition to participate in tenders for these companies. We really encourage all specialist logistics service providers to do a Gulf SQAS assessment and make a mutual effort for the benefit of the industry.
Transporting chemicals and dangerous goods by road is predicated on having safe handling equipment, vehicles and well trained drivers. Indeed, drivers in the chemical logistics industry do much more then operate trucksthey also carry a responsibility for safety, failure of which can lead to catastrophic incidents. In fact, all employees responsible for storing, handling and transporting chemicals at all points along the supply chain must undergo stringent training.
Tonelli comments: Our operations are dependent on our staff and it is our responsibility that they are full trained and equipped with all the skills, knowledge and equipment. This starts first and foremost with the education of our staff who are responsible for driving our fleet of vehicles. In 2006 we established the Agility Driver Training Academy, since which time we have successfully reduced the accident rates and with them, the number of injuries, lost hours, vehicle and cargo damage and late delivery penalties.
Modified, safe and clean vehicles
Additionally, the vehicles themselves have to be road worthy for transporting chemicals. By the very nature of different chemicals, road tankers used for each journey have to be appropriate for the liquid being transported. For example corrosive liquids (such as sodium hypochlorite and sulphuric acid) make it difficult to use traditional road tankers due of their aggressive nature. Therefore many variants and modifications have to be made to vehicles depending on the chemical or hazardous liquid being transported.
Ensuring they are also cleaned appropriately and regularly tested is essential to the safe delivery too. The cleaning of tankers and dry bulk trucks, as well as of containers and intermediate bulk containers, is instrumental in assuring supply chain efficiency because if vehicles are always cleaned promptly, they can be used more efficiently in precisely timed transport chains.
As Tonelli points out: We regularly inspect vehicles for road safety. For example, monthly safety tests are conducted and they are inspected for operability before use and we ensure all vehicles pass NOx tests every six month.
Safe storage and handling
Safety runs throughout the whole logistics process when it comes to chemicals not just the transport part.
Hazardous chemicals must be stored and handled carefully according to specific and strict instructions, which vary for different substances and location of storage. Due to the challenges, it can be difficult in the Middle East region to ensure this happens, as Heath explains: The largest part of our operations in the GCC are in fact around storage and handling of chemicals and we have seen in the past a distinct lack of suitable warehouses for chemicals, especially for dangerous goods.
Tonelli nots: Effective chemical goods storage is underpinned by strict adherence to safety standards, and in particular for dangerous goods, segregation of cargo according to their hazard class and strong response protocols for emergencies.
Warehouses for chemical storage are not that readily available in the region, but things are getting better. In Dubai South, RSA-TALKE has built and now operates a state-ofthe-art chemical warehouse for dangerous and non-dangerous goods. This facility was unique for the region and it raises the bar as far as standards here are concerned, notes Heath.
Their next step is the opening of a specialised depot for ISO-tank containers, laden or empty, in JAFZA. The first phase of this facility will be opening very shortly and will include a cleaning station for ISO-tanks.
Talking about the future plans, Heath says: In the next phases, we will add maintenance and repair, drumming of liquid chemicals and more dangerous goods warehouse capacity.
Ensuring appropriate storage and handling within the warehouses is also critical.
We have clearly defined standard operating procedures to minimize double handling and associated opportunity for incidents, Tonelli says, adding: Depending on the goods stored, its important to consider how flexible the warehouse configuration can be. For example, racking is a great maximiser of space but may not be the most convenient solution for products that can be safely block-stacked.
Customs clearance and compliance
Fast and flexible customs clearance is essential in the chemical supply. When manufactures are working just-in-time operations, the delivery of raw and finished chemical products immediately before their use is key. Logistics companies have to have the right understanding of local policies and procedures to ensure they can transport the chemicals on time. Additionally, unlike other materials being transported around the region, the movement of chemicals requires extra paperwork to ensure compliance to counter security threats.
Tonelli explains: Relationships are key when working with customs around the world. We have to stay up to date on daily changes to processes and procedures that can save considerable time during a project. Particular areas where this is especially key is in chemicals transportation when shipping dangerous goods here an intimate knowledge is required to ensure our teams have up to date knowledge to meet customs requirements.
Heath concludes: Depending on the requirements of our customers, different customs clearance options can be utilised to ensure the most efficient solution for the individual requirements of each business. The key element is to fully understand the different procedures, with their respective rules and regulations, to ensure highest compliance on our side and on the side of our customers.
When chemical transportation and storage goes wrong
In 2015, two huge explosions in a warehouse at Tianjin Port killed more than 100 people, resulting in a string of arrests including those of staff from the logistics firm which owned the warehouse, Tianjin Dongjiang Port Ruihai International Logistics.
It was discovered that hazardous and flammable chemicals, including calcium carbide, sodium cyanide, potassium nitrate, ammonium nitrate and sodium nitrate, had been stored there illegally.
Before the explosions, several firefighters were already at the scene trying to control a blaze. There have been suggestions that water sprayed on some of the chemicals could have caused the chemical reaction that led to the blasts.
The incident led to calls for many reforms, not only in the storage and transportation of hazardous goods, but in the laws surrounding their declaration and even in the planning of the city, which had three residential apartment blocks within a 1km radius of the warehouse.