2006 Paper Recycling Conference: Avoiding Transportation Rage

The PierPass Program, now nearly a year old, is still challenging West Coast paper professionals trying to move their product overseas, according to Scott Horne, vice president of governmental relations and general counsel for the Institute of Scrap Recycling Industries Inc. (ISRI).

Horne addressed attendees of the 2006 Paper Recycling Conference & Trade Show as part of a panel on transportation issues facing the industry. PierPass, a program instituted last July with the intent of decreasing shipping at the ports of Los Angeles and Long Beach during peak hours, is still a hot topic among those in the paper industry, he said.

The $100 fee for 40-foot containers shipped during peak hours has had a disproportional affect on recyclers exporting materials because of the relatively low value of scrap, Horne said.

Since the implementation of the PierPass program, as much as 30 to 35 percent of traffic has moved to off-peak nighttime hours. But nighttime shipping has proven problematic because some steam line offices are not open or staffed at night to address problems.\

In addition to the PierPass program, the strict 23-ton weight limit on containers bound for India is another sea transportation issue facing paper exporters, said Horne.

Climbing rail and truck rates are also contributing to shippers “transportation rage,” according to panelist Michael J. McInerney of Celtic Logistics Inc.

Addition challenges facing the rail industry include rail car weight restrictions and the fact that car design has just about reached maximum capacity. “You can’t make them much bigger,” said McInerney. Aging infrastructure is also taking its toll on transportation by train.

Constantly rising fuel and insurance costs are challenging the trucking industry. In addition, drivers face new laws that restrict the hours they can drive, according to McInerney. He added that the industry is also facing a driver shortage.

He advised that shippers think not in terms of cost reduction, but to make cost control their goal. Understanding the product being shipped and the logistics of the supply chain is an important first step in controlling transportation costs, he said. He recommended looking at alternatives like coupling transportation for inbound raw materials and outbound finished products and modal options like river barges or soft-side trailers.

Jesse Bowen of KTI Inc. identified rising insurance costs as a key challenge in the trucking industry, noting that insurance costs have nearly doubled in the last 35 years.

Knowledge is power, said Bowen, who advised shippers to be as educated as possible about their freight choices to help gain more control over costs.

He also said clear communication is a key to getting the best service from a freight carrier. “Know where your freight is at all times,” he said, adding that many companies, including his own KTI offer Web-based tracking.