International logistics standards as platform for global economic integration

1. International logistics standards as platform for global economic integration Chung Tam, CTL Chief Representative, ASTL-China 2nd Global Shipping Summit Nov., 23, 2007 Shenzhen, China

2. Logistics has developed from a local industry to a global industry. Since the opening up, the Chinese economy has developed from a local economy (where goods are sourced and sold locally) to a truly global economy where raw materials are sourced from all over the world, processed in China then sold to consumers domestically and overseas.

3. This global economy is made possible by a very complex global logistics network.

4. Imagine if every country had different regulations and standards… What meets the requirements of one country, doesn’t meet those in another. This would slow these processes down, add unnecessary cost and may even stop the flow of goods all together.

5. International logistics standards and regulations are necessary to ensure a safe, efficient and secure global supply chain.

6. International Maritime Dangerous Goods (IMDG) codes The International Maritime Dangerous Goods (IMDG) Code was developed by the International Maritime Organization (IMO) as a uniform international code for the transport of dangerous goods by sea covering such matters as packing, container traffic and stowage.

7. The IMDG Code is intended to: • Prevent injury or damage to ships and cargoes • Prevent harm to the marine environment • Enhance the safe transport of dangerous goods • Facilitate the free unrestricted movement of such • goods

12. History of the IMDG Code • Recognition of need - 1929 (SOLAS) • Classification of goods - 1948 (SOLAS) • Report on classification, listing, labeling, documentation -1956 (UN Expert Committee) • Rule development -1960 (SOLAS) • IMDG developed and recommended to governments -1965 (IMOs MSC) • MARPOL 73/78 initial development - 1973 • Scope of rules developed - 1974 (SOLAS) • Revisions and amendments - 1986, 1992, 1994(M), 1996(M), 2000 • Mandatory - 2004 • Future - Continued revisions

13. Today at least 150 countries whose combined merchant fleets account for more than 98% of the world's gross tonnage use the IMDG Code as a basis for regulating sea transport of hazardous materials. The U.S. Hazardous Materials Regulations authorize use of the IMDG Code as a means of compliance with the HMR when at least one segment of transport involves sea transport.

14. China has become a major exporter of dangerous goods with the growth of its chemical and fireworks industries. But its compliance with international dangerous goods transportation requirements has not kept up.

15. Problems: • Accidents • Heavy fines • Increased inspections • Poor international reputation • Increased transportation cost

16. International Cooperation U.S. – China agreement on Hazardous Materials Transportation ASTL – US Dept. of Transportation cooperation on Hazardous Materials transportation in China

17. Conclusion Conformance with IMDG codes will serve as a platform for Chinese producers and shippers of dangerous goods to grow and develop a global market. To become a true global logistics player, you need to comply with global requirements. By following International Logistics standards and regulation, you will gain a business competitive advantage not a cost disadvantage.

18. Thank you !