The recycling industry has been plagued by transportation issues, whether attempting to convey materials by truck, rail or ship.
In the trucking sector, rates have tripled in some lanes and some recyclers have had to contend with unreliable service. As one executive with a scrap processing company based in the Midwest told me, “Going somewhere for a penny a pound simply doesn’t exist anymore.”
The issues with trucking have been amplified in part because of the pandemic, but the industry’s issues with rail service go back further in time. Recyclers have expressed concerns for some time about increasing demurrage charges, changes in demurrage rules that reduced the time to load or unload before charges begin and increasing rates, to name a few.
“Whether an executive order will help address issues with ocean and rail shipping remains to be seen.”
In April of this year, the Institute of Scrap Recycling Industries (ISRI), Washington, claimed a victory for the recycling industry when the Surface Transportation Board (STB) adopted a Final Rule Establishing Minimum Information Requirements for Class I Demurrage Invoices that had long been sought.
ISRI President Robin Wiener said at the time, “The STB’s rule recognizes that the communication of correct information can help prevent many misunderstandings between rail shippers and carriers.”
However, many recyclers say issues with the Class I railroads persist. Mark, Jason and Brad Lasky, co-owners of Sadoff Iron & Metal Co., the subject of this month’s cover story, mention transportation-related challenges they face, “whether it’s rail and the desire for the railroad industry to keep serving our industry or lack of finding qualified drivers,” Jason Lasky says. The company is looking into buying or renting rail cars because of servicing and availability issues.
In the ocean shipping sector, while profitability is up for 11 of the largest shipping lines, which combined yielded more than $16 billion in earnings before interest and taxes in the first quarter of 2021, according to an assessment of earnings reports by Denmark-based consultancy Sea-Intelligence, the recycling industry has found rates increasing and containers and bookings difficult to secure in certain areas of the U.S.
Whether an executive order President Biden signed in early July will help address issues with ocean and rail shipping remains to be seen, but ISRI responded favorably.
“We applaud President Biden for issuing this important executive order that recognizes the systemic disruptions to our nation’s manufacturing supply chains and directs his administration to take all appropriate actions to help improve our transportation networks,” Wiener said.
She added, “This executive order helps our essential industry fulfill its mission of supplying specification-grade commodities that save energy, protect the environment, conserve natural resources and help combat climate change.”
The proper functioning of global supply chains requires timely and cost-effective transportation. Perhaps this executive order is a step in that direction.