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Storing hazardous substances at ports – Challenges for loss prevention
Storing hazardous substances at ports – Challenges for loss prevention
© picture alliance / dpa / Zhang Yuanyuan
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    The disaster in Tianjin raises the question of how hazardous substances should best be managed at port facilities. A number of fundamental conditions must be met in order to prevent losses.
    Port facilities not only handle ordinary goods, but are also a hub for hazardous substances. The goods delivered by ship are stored temporarily in special warehouses for dangerous goods from which they are then collected for further distribution. This applies to dangerous cargo as well as to pier-to-pier container services (transport of loading units from the terminal in the port of loading to the terminal in the port of unloading). The advantages are obvious. Costs are significantly reduced, as the users of these single points of contact do not require their own warehouses for the hazardous substances, and transport from one storage facility to another is unnecessary. After all, the construction of a warehouse for hazardous substances costs two or three times that of an ordinary warehouse, due to the special requirements imposed for the building. Such considerable investments are only worthwhile if certain dimensions are achieved, but this is normally only the case for specialist cargo handling firms. In addition to storage, they provide a number of other services. These include sampling, fine commissioning, filling and cleaning containers, supply and disposal of packaging materials, and stowage of sea containers. As the following summary shows, special precautions are needed when handling hazardous substances.

    Loss prevention through compliance with statutory requirements

    The challenge when building dangerous goods warehouses in port areas is to connect a whole range of laws and directives on building construction, hazardous substances, water protection, explosives, epidemics, etc. The complexity of these legal standards makes it necessary to involve the authorities in an all-embracing, interdisciplinary planning process at an early stage. Both national and international standards must be observed.

    Different systems are applied worldwide for classifying and marking chemicals. As a result, a substance or mixture of substances may be classed and treated as hazardous in one country but not in another. This causes problems, not only for transport and trade, but also with regard to safety at work. To remedy the situation, a uniform global system for classifying chemicals has been set up under the aegis of the United Nations. The Globally Harmonised System (GHS), as it is known, was first presented in 2003 in the form of a “Purple Book” which is normally updated every two years. Classification according to harmonised criteria means that the same symbols, warnings and safety instructions can be used on labels and in data sheets across the world to draw attention to the dangers associated with chemicals.

    National regulations must be observed at all times when building and operating port facilities or industrial plants which handle, store or process hazardous substances. These regulations specify which facilities require mandatory licensing and consequently must meet certain requirements. Explosive, radioactive and infectious substances are often governed by more far-reaching regulations which normally also call for separate storage. Special requirements must also be observed when handling larger quantities of combustible and explosive substances. Strict compliance with the statutory rules and regulations is consequently the most important way of preventing losses.

    In this context, loss prevention begins outside the port, in maritime traffic: hence the global relevance of Maritime Safety Conventions (IMO– IMDG/ISM/IBC). International safety regulations governing the transport of dangerous sea freight in maritime shipping – acknowledged with more or less binding force, depending on whether they have been adopted on a national level – are prepared by the Maritime Safety Committee (MSC), Marine Environment Protection Committee (MEPC) and Legal Committee (LEG) of the International Maritime Organization (IMO). The central guideline is the International Convention for the Safety of Life at Sea (SOLAS) and the International Maritime Dangerous Goods Code (IMDG), which governs marking and packaging during stacking, storage and handling activities on board ships or in port, as well as the International Management Code for the Safe Operation of Ships and for Pollution Prevention (ISM), which sets general safety standards for maritime traffic, and the International Code for the Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk (IBC). Other codes include the International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk (IGC Code) and the International Code for the Safe Carriage of Packaged Irradiated Nuclear Fuel, Plutonium and High- Level Radioactive Wastes on Board Ships (INF Code). These codes govern the structural design and requirements for ships carrying dangerous goods. They are part of the SOLAS Convention. The entire system is part of the Global Integrated Shipping Information System (GISIS).

    Loss prevention through physical separation

    In order to take account of the specific risk conditions, certain minimum distances must be maintained in relation to residential and industrial areas, public traffic infrastructure and other storage facilities when storing or transporting hazardous substances in large quantities. This must be assured through suitable observation and surveillance measures when planning, licensing and subsequently operating such facilities.

    Loss prevention through structural measures and plant engineering

    Dangerous goods warehouses are designed and built according to a simple principle: the warehouse must be sealed in all directions, i.e. in relation to the soil and groundwater, as well as in relation to the atmosphere. The reason for this is that hazardous substances must be prevented from leaking into the environment following an accident and emergency services must be able to reach the scene of the accident safely. In particular, this means that, where possible, the roof, walls, foundations and doors must be resistant to fire and the different hazardous substances must be separated by permanently installed isolating bulkheads. The floor must be sealed in such a way that hazardous substances cannot escape into the ground. Leakages, for instance, are diverted into sumps from which the fluids can be removed by external pumps. Equipment also includes forced ventilation, fixed fire extinguishers, smoke and gas detection systems as well as explosion-proof devices.

    Loss prevention through information and tracking systems

    A transparent logistics chain is essential in order to maintain a constant overview of the type of hazardous substances in any one place and their quantities. With this information, the substances can be stored safely and without dangerous accumulations as well as without exceeding permitted storage levels. In the context of port storage logistics, a distinction is often made between “packaged hazardous goods in dockside facilities for temporary storage during transport”, “transit and direct transshipment of packaged hazardous goods” and “hazardous goods as bulk goods”. The goods’ location and transport are best recorded and managed with the aid of an information and tracking system. When using telematic systems, it is advisable to distinguish between port telematics and forwarding telematics in the port facilities. Port telematics might combine a communications interface and special application software. The interface (Electronic Data Interchange or EDI system) allows information to be exchanged via a direct link between the customer, handling firm and port management. In combination with special software systems, it can be used for such industry-specific tasks as customs documentation, port administration, ship data or forwarding management. The most important job of forwarding telematics is to ensure a transparent transport process. Close-range delivery can be planned in good time by providing consignment data in advance. At the same time, the goods can also be located during transport. The entire distribution business is simplified by using suitable wireless data systems, and management of the consignments of hazardous goods becomes more transparent.

    Loss prevention through increased controls

    In the majority of cases, public authorities are responsible for monitoring compliance with the relevant regulations governing hazardous substances and particularly their marking. Incorrectly declared cargoes, which could result in dangerous accumulations, or combined storage in warehouses for dangerous goods, can thus be identified in this way. IT-based controls can also be performed using a cargo management screening process. In 2014, Hapag-Lloyd’s watchdog system raised the alarm in 162,000 cases, including 2,620 cargoes which were identified as incorrectly declared hazardous goods. Another possibility is the Cargo Incident Notification System (CINS) set up by container carriers to exchange information on cargo-related accidents. CINS findings that 25% of the accidents are attributable to incorrect declarations underscore the need for stringent controls.


    There is an urgent need for port storage facilities specialising in hazardous substances to keep up with the rapid growth in global trade. Given their large capacities and the range of potentially hazardous substances they contain, such warehouses are governed by special safety regulations, particularly as regards the distances to be maintained and the loss prevention measures required in respect of both structural and plant engineering measures.

    Provided that such measures are enforced, they can prevent losses and limit the magnitude of a loss. Information and tracking systems help to make movements of hazardous substances in port areas more transparent and permit identification of dangerous levels or cases of combined storage. In addition, such systems also make it possible to check and verify compliance with the required marking and approved storage quantities. In an emergency, it is essential to have fast access to data on all relevant hazardous substances (for instance in material safety data sheets) to ensure that emergency services have all the information they need regarding the substances’ location, type and quantity, as well as on the safety precautions taken to protect people and the environment.

    Suitable emergency and business continuity plans permitting a swift resumption of operations are just as important as compliance with the regulations on dangerous goods. The decisive factor is to develop scenarios which also take account of exposure to multiple risks, such as fire/ explosion, natural hazards, terrorist attacks and cyber risks.

    Munich Re Experts
    Alfons Maier
    is a senior loss control consultant in Munich Re's Corporate Claims Division.