Tianjin Explosion's Impact on Supply Chain Management

Aybuke Gamze Karasu

Prof. York

October 24, 2015

HOW DID TIANJIN EXPLOSION IMPACT SUPPLY CHAIN MANAGEMENT?

In today’s world, almost anything we can think of can affect the business cycle – political issues, environmental problems, economical situations etc. Tianjin explosion was one of them. The Chinese city of Tianjin was covered by a huge black smoke in 12 August 2015. A series of massive explosions killed more than one hundred people and injured many more at the Port of Tianjin. According to BCC News, explosions took place at Tianjin Dongjiang Port Rui Hai International Logistics’ warehouse which contained hazardous and flammable chemicals. The explosion destroyed large shipping containers, a significant amount of goods at and around the port and several thousand cars. One of the world’s busiest ports was disrupted, and the explosion created so many supply chain problems

The deadly explosion that rocked Tianjin had the biggest negative impact on logistics. Thousands of shipping containers were damaged by the fire. Companies had to deal with their insurance agencies to claim their losses instead of receiving their goods to produce or sell. Other containers which were not damaged by the explosion directly were still affected, or the goods that were purchased and ready to ship were affected as well. Companies faced with long delays as a result of the explosion at the port. Also, some companies had to look for alternative ports to ship their containers because the Tianjin port were unable to operate for a while. Using another port might had led an increase the cost of freight for companies. For example, if a shipper company decided to reroute containers that were not damaged in the explosion and were already late, and had to use a further port, the company would have to pay all extra costs for trucking and customs at the new port, and maybe they would have to still wait longer for strict regulations at the new port. For those...