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ISRI Convention: Exporters Victims of Success

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Containers scarce, ports and rail lines crowded for scrap shippers.

April 14, 2008

Americans who worry about a trade deficit might be surprised to learn that the recycling industry in the United States is exporting at a level that is straining the shipping network.


In a session at the ISRI (Institute of Scrap Recycling Industries Inc.) 2008 Annual Convention, recyclers heard from shipping industry representatives just how much trade conditions have changed.


As scrap export markets ramped up earlier this decade, recyclers benefited from an abundant availability of shipping containers (at a low rate) that would otherwise wait in the United States for a long time or even leave empty.


That circumstance began changing late last year. “In general, places like Memphis or Chicago [are] low on containers right now,” said Mario Bruendel of the Newport Beach, Calif., office of freight forwarder Fr. Meyer’s Sohn North America, “and carriers are increasing their rates.”


Bruendel cited the weak dollar as having caused not only a booming export market, but also a decline in containerized imports. According to Bruendel, some vessels to China are being booked up six weeks in advance, and shippers are able to seek out higher-priced cargo.


Greg Dixon of the Staten Island, N.Y., office of ZIM American Shipping, confirmed Bruendel’s remarks and added another key observation: That when shipping lines saw forecasts that America’s consumer economy was slowing down, they repositioned containers to serve the European market.


“Last October, we began to realize at ZIM that a couple things were happening,” said Dixon, referring to “stagnant” shipping levels from China to the United States. “Based on that, we re-deployed more equipment and services for the China-to-Europe routes,” he remarked, noting that the container redeployment level may have been as high as 35 percent of capacity.


Dixon remarked that additional difficulties occurred when severe weather hit China just after the Chinese New Year, meaning that containers that would have started heading back to North America in February were delayed by two or three weeks. Speaking to ISRI attendees on April 8, Dixon said, “Today, for the first day in a month in New York City, I’ve got an overbalance of 40-foot containers.”


In a separate ISRI Convention session, attendees learned from attorney Jeffrey O. Moreno of Thompson Hine’s Washington office that recyclers who ship by rail have new options to appeal their rates through the Surface Transportation Board (STB).


New processes involve mandatory mediation and also have strict time limits such as 240 days to reach a conclusion.


The ISRI 2008 Annual Convention took place April 7-10 at the Mandalay Bay Resort & Casino in Las Vegas.


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