FENC holds transport operations to the highest standards and only teams up with the most reliable logistics operators and international organizations to further its commitment to social and environmental sustainability.
Shipping of raw materials and products at FENC involves land and marine transport. The Company wishes to ensure safety during transportation while minimizing GHG emissions and pollution. Whether shipping internationally or domestically, through land or sea, any mishaps could lead to disastrous damage to the environment and the Company. Therefore, the Company holds transport operations to the highest local and global standards and only teams up with the most reliable logistics operators and international organizations to further its commitment to social and environmental sustainability.
Selection and Management of Transport Contractors
Prior to commencing any shipping activities, FENC makes careful selection of reputable transport suppliers with clean records that identify with the commitments in Supplier Code of Conduct and Corporate Social Responsibility Commitment Statement. The Company also conducts annual reviews to evaluate contractor operation.
1. Marine Transport FENC establishes partnerships with reputable international suppliers that are soundly managed and abiding by the principles of International Maritime Organization (IMO). Evaluation and management over the marine transport contractor are conducted on a regular basis.
Control Mechanism and Action Plan for Marine Transport Contractors
Control Mechanism
Action Plan
Selection
All transport suppliers shall comply with local and international regulations.
Marine transport suppliers shall be selected carefully with environmental protection, energy conservation and carbon reduction as priority considerations. It is crucial and demanded that suppliers comply with environmental regulations under each jurisdiction regarding loading, gas emission, fuel consumption and waste fuel disposal.
The Company works with transport suppliers complying with the rules under IMO 2020. The entire fleet shall limit the sulphur content in fuel oil to under 0.5% m/m sulfur, use alternative fuel or adopt emission reduction mechanism that achieve equivalent effect. Such measure reduces sulphur pollution by 80% compared to the regular fleet. FENC also pays for the low sulphur surcharge (LSS).
Management
The Company conducts monthly reviews on transport suppliers. Contracts with individuals, ships or corporations listed on the international sanctions list or Specially Designated Nationals (SDN) list by Office of Foreign Assets Control (OFAC) will be terminated immediately.
The Company makes quarterly reviews on the records of long-term contracts with transport suppliers. Immediate improvement measures are required for any misconducts, and the outcome will be taken into consideration for future contracts.
The Company examines violations committed by transport suppliers through public information platforms such as National Enterprise Credit Information Publicity System, TianYanCha.com and Credit Publicity Platform of Import and Export Business of Customs of the People’s Republic of China.
2024 Performance
All marine transport contractors have satisfied the above selection criteria in 2023. There were no transport disputes or occupational safety issues. Nor were there any incidents that pose negative environmental and social impact.
2. Land Transport Vehicles involved in land transport may directly impact public safety. Therefore, in addition to meeting minimum capacity, transportation safety is a priority concern during contractor selection. The Company compiles case studies and conducts regular training for the transporters and dispatchers on the contractor’s end to improve their risk awareness and response, creating win-win in occupational safety between FENC and the contractors.
Control Mechanism and Action Plan for Land Transport Contractors
Control Mechanism
Action Plan
Selection
Transport suppliers must ensure that all vehicles comply with local emission standards. Suppliers with current Company contracts must phase out dated vehicles.
Based on the goods transported, transport suppliers must obtain required permits and licenses in accordance with governmental regulations and the weight limit.
Contractors are evaluated on existing environmental measures, the level of incorporation of environmental technologies and waste reduction plans. Priority status is given to contractors with low environmental risks.
Management
The audit team led by executive managers visits major transport contractors to conduct annual on-site audits and reviews.
Random safety inspection: Areas inspected include the gas consumption by transport vehicles; investment progress on environmental protection facilities; empty containers screening criteria; dispatching equipment facilities; container storage environment; pollution treatment; staff compliance with occupational safety standards; plant regulations. Improvement plans should be proposed for deficiencies.
Monthly discussions are held with contractors to examine delivery planning, new occupational safety regulations and deficiencies during the transport process. Meetings are held when appropriate.
Conduct a minimum of one annual transport safety and health review meeting with transport carriers and plant representatives. Transport suppliers must prepare review and improvement reports addressing non-compliance. The Company also ensures that suppliers implement control over vehicle equipment; driver behaviors; GPS speedometer reading; personal equipment; loading and unloading operations; prevention of driver fatigue.
Training: FENC requires regular health checkups for the employees of transport suppliers. The Company also provides annual safety training with safety awareness campaigns and audits from time to time.
Incentivization: Transport suppliers incentivize drivers who conserve fuels and FENC incentivizes transport suppliers with early green vehicle adoption by allocating additional shipment.
Freight consolidation: Light-weight products for different customers are consolidated into one delivery vehicle to reduce the number of vehicles and trips.
Increase in transportation capacity: The warehouse capacity is expanded with additional loading and unloading points as well as separated loading zones to improve efficiency.
Smart route planning: Delivery routes are optimized for vehicles to pick up recycled packaging materials on the return trip and avoid truck deadheading.
2024 Performance
Key discussions at the 2024 review meeting for transport, environment, safety and health at each production site:
When poor container conditions may pose potential safety hazards, the drivers shall report such conditions immediately and take the container to the maintenance shop for repair.
Transport suppliers shall maintain and inspect all vehicles, containers and tanks on a regular basis as required by FENC to ensure zero occupational disasters.
Operators shall be notified of precautions during loading and unloading within the plant and the severe penalties for contraband. Requests have been made for the transport suppliers to enhance training.
FIGP established a new logistics team in 2024 to conduct weekly discussions on issues related to transport management.
All land transport suppliers met the above screening criteria in 2024, and the results of all inspections are in compliance.
To ensure contractors’ commitment to safety, all transport contractors must incorporate risk indicators into the emergency response in addition to regular management practices; review and evaluate past disasters; analyze possible risks; continue improving safety management system. There were no traffic accidents in 2024.
Risk Indicator and Control Mechanism for Land Transport Contractors
Item
Risk Indicator
Control Mechanism
Qualification and Behavioral Review
Vehicle operators exhibit behaviors that violate traffic safety regulations and traffic signals, such as speeding, drunk driving, running red light and not maintaining safe trailing distance.
Vehicle operators work overtime and experience driver fatigue.
Professional vehicle operators must provide required license for vehicles operated, and permit for transporting hazardous materials to carry out such operations.
Pre-work training and trial runs are provided for suppliers.
Working hours are subject to local labor regulations.
Transport Equipment
The selection of comprehensive transport equipment.
The use of chemical tankers for chemical materials.
The use of environmentally friendly vehicles to reduce CO2 emissions.
Regular maintenance and exhaust check at the inspection station.
Inspections are conducted before, during and after the transport.
On-site route planning and inspection are conducted in advance to ensure the safety and efficiency of land transport. Vehicles are required to follow the planned routes to reduce the distance traveled, fuel consumption and carbon emissions.
The GPS system is installed to monitor vehicle conditions.
Heavy duty diesel vehicles in compliance with the governmental emission standards are used to minimize the emission of hazardous materials and microparticles (black smoke).
External Environment
Weight limit.
Road maintenance.
Poor weather conditions that affect visibility.
Dusty conditions and environmental pollution.
Vehicle capacity shall comply with the weight limit set forth in traffic regulations.
Safety is priority. Transport operation shall be postponed during poor weather or road conditions.
When transporting breakbulk cargo, lead with sprinkler truck to reduce dust.
3. Plant Control Contractors are required to comply with all rules and regulations regarding safety and transport at each plant to ensure transportation safety and management. Transport contractors must require that vehicle operators thoroughly understand the safety requirements established at each plant prior to entering the premise to minimize occupational disasters.
Control Mechanism for Safe Transport of Hazardous Objects
Transport suppliers shall comply with all regulations set forth in Regulations Governing Transport of Dangerous Goods.
All signage shall comply with local regulations on Identification of Vehicles Transporting Dangerous Goods.
All operators and passengers on vehicles carrying hazardous materials shall complete professional training and physical examination per regulatory requirements and shall carry adequate personal protective equipment on the vehicle.
Governmental permits are required for delivering hazardous materials and transportation routes shall comply with local regulations.
Regular inspections shall be conducted over the vehicles and canisters carrying hazardous materials..
FENC ensures supplier compliance with safety regulations concerning the transport of hazardous materials through random inspections and regular review meetings on transportation environmental safety and health.
2024 Performance: There were no incidences involving leakage of hazardous chemicals and materials during the transport of raw materials and finished products for FENC.
