In a dramatic turn of events, a ship carrying hazardous cargo exploded at the Port of Ningbo-Zhoushan in Zhejiang province, China, around 1:50 PM local time. The explosion, which sent a massive fireball skyward and scattered debris across the port, underscores the urgent need for improved safety measures in maritime logistics.

Video footage from the state-run China News Network (CCTV) captured the fireball erupting and debris being flung high into the air. The shockwave from the blast was so intense that it caused the roof of a nearby company canteen to collapse and rattled bottles in surrounding stores. Thick black smoke was later observed rising from the cargo hold of the vessel.

The ship involved, the Dong Ming, is operated by Taiwanese container shipping company Yang Ming and was docked at the Beilun Port area. According to maritime search and rescue officials, the vessel was carrying organic peroxide, a highly reactive chemical classified under hazard class 5.2. This classification indicates that the cargo must be kept refrigerated to prevent combustion and the release of harmful fumes.

Reports suggest that the cargo’s water-cooling system was not operational, potentially due to Ningbo’s recent hot weather, which exacerbated the risk. The ship was en route from Shanghai to the Middle East when the incident occurred. Fire tugboats and response teams are on-site, and port officials are investigating the cause of the explosion. Thankfully, no injuries have been reported, but nearby residents are being evacuated as a precaution.

This incident at one of the world’s largest ports, which handles hundreds of millions of tankers, bulk carriers, and containerships annually, highlights the critical need for stringent safety measures and protocols in handling hazardous materials. The Port of Ningbo-Zhoushan’s explosive event serves as a stark reminder of the potential hazards in global logistics and the importance of ensuring robust safety systems and preparedness for such emergencies.

There’s been a lot of talk about “friendshoring” since Treasury Secretary Janet Yellen first used the term in 2022. This concept, which emphasises strengthening trade ties with allied countries to enhance supply chain resilience, marks a key distinction between the Biden administration’s approach and that of its predecessor. However, turning this idea into actionable strategy has proven challenging, partly due to a lack of detailed insights into the US’s own industrial capacity and that of its allies. 

Building Resilience Through Collaboration 

Recognising the necessity for deeper insights, the Commerce Department launched a Supply Chain Center last year to work with private sector partners on comprehensive supply chain mapping. This centre has now started trialling a supply chain exposure tool that analyses trade and customs data from the US and its allies, painting a detailed picture of supply chain risks and opportunities. 

The objective is to evaluate the robustness of supply chains in critical sectors like semiconductors, critical minerals, and consumer electronics. This tool helps determine how quickly critical inputs can be replaced from allied countries in the event of disruptions such as war, pandemics, or natural disasters. Additionally, it assesses dependencies on single nations like China or Russia. 

“We wanted to create a common operating picture and shared set of facts for supply chain discussions with allies in Europe or nations that are part of the Indo-Pacific Economic Framework,” says Grant Harris, Assistant Secretary of Commerce for Industry and Analysis. “Our baseline for those discussions too often had been, ‘we should all do more,’ and then things would stall because we didn’t have the data for a more detailed conversation.” 

Strategic Supply Chain Insights 

This effort represents the most granular attempt by the US government to map global chokepoints across various commercial sectors. According to several supply chain experts, no other nation — apart from China — is undertaking such extensive cross-border mapping. 

The Biden administration’s 100-day report on supply chains identified general vulnerabilities in areas like chips, critical minerals, and pharmaceuticals. Subsequent legislation, notably the Chips and Science Act, has aimed to address these vulnerabilities. However, this new tool offers more specific insights into vulnerabilities several layers deep in the supply chain. 

For example, while Indo-Pacific Economic Framework (IPEF) nations might collectively appear to have a secure 33 percent market share of a crucial electronics component, this tool reveals that the majority of this supply comes from a single country that imports most of its inputs from China. 

Despite limitations in real-time data and the complexity of creating a comprehensive map, the tool is a significant advancement in understanding global supply chain dynamics. Harvard Business School professor Willy Shih points out that supply chain visibility can uncover surprising dependencies, such as the concentration of roofing nail suppliers in Beijing. While these are less concerning than dependencies on electrical steel or broadband infrastructure, they underscore the importance of detailed supply chain mapping. 

The Role of Real-Time Data and Insights 

To ensure the success of such initiatives, implementing supply chain and climate impact visibility software is crucial. This technology provides real-time data insights, essential for Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) to make informed, business-critical decisions. For instance, real-time tracking of Scope 3 emissions from shipments allows companies to monitor emissions as they occur, enabling a more agile and responsive approach to sustainability goals. 

Real-time visibility not only helps achieve environmental targets but also allows stakeholders to navigate supply chain impacts more effectively. This ensures smoother operations and greater adaptability in a dynamic market environment. 

Advancing Friendshoring and Supply Chain Resilience 

The new supply chain exposure tool aims to identify major risk hubs, facilitating more strategic and effective conversations with trade partners. For example, can global demand for antimony ore, essential for battery alloys, be met by Australian supply? Can more laptop components be sourced from the Netherlands? 

Supply chain experts like Shih and Christopher Gopal, a member of the DoD’s Defense Business Board, see value in risk mapping. However, they emphasise that real demand signals are necessary to create economically sustainable shifts in global supply chains. Knowing where supply lies is one thing; making it economically viable to produce goods in rich countries is another. 

This is where friendshoring comes into play. Envisioning partnerships around electric vehicles or clean tech that involve sourcing critical minerals in Australia, leveraging Japanese production capacity, and utilising the power of the US consumer market can create competitive, sustainable products. 

As more is known about global production, a less nationalistic and more cooperative conversation about creating global supply chain resiliency may emerge. This goal has bipartisan appeal in the US, where the Promoting Resilient Supply Chains Act, which aims to codify risk mapping, passed the House unanimously. Eliminating chokepoints is a universally agreed objective. 

In conclusion, the new supply chain exposure tool and the emphasis on friendshoring are pivotal steps toward a more resilient, efficient, and sustainable global supply chain. These advancements, combined with real-time data insights, empower BCOs and LSPs to make informed decisions, ultimately enhancing the robustness of global trade networks.