ISRI Convention: Paper Trail Now a Highway

Although electronic media and information transfer has put limits on paper consumption in North America, the fast-growing global economy continues to make recovered fiber a valued commodity.

In a session at the ISRI (Institute of Scrap Recycling Industries Inc.) 2008 Annual Convention, two recyclers and a railroad representative touched on challenges more related to serving markets than to any concerns about a lack of markets.

Kevin Duncombe of Western Pacific Pulp and Paper, Downey, Calif., noted that while Chinese ports have received massive investments to upgrade them, ports in the United States show severe strain from under-investment.

In California, this under-investment is combining with air quality laws to make ports difficult places in which to operate. Additionally, a recent trend of a 13 percent drop in imports combined with a 17 percent boost in exports means scrap paper exporters are facing a dramatically different situation regarding container availability and shipping rates, according to Duncombe.

Additional cost pressures include an increase in diesel fuel costs in California from $2.74 per gallon in early 2007 to $4.03 per gallon, making it also more expensive to get containers to the port.

Among potential solutions noted by Duncombe were the use of alternative fuel vehicles and the proposed construction of a maglev rail-to-port system in Southern California.

Recovered fiber broker Ranjit Baxi of J&H Sales International Ltd., London, remarked that more than 180 million tons of recovered fiber is being shipped to paper mills worldwide annually, with Asia importing some “5,000 40-foot containers every day.”

Outbound shipping costs from Europe have escalated even higher than what American recyclers are experiencing, according to Baxi, with a sudden boost in container shipping rates having occurred in Europe in October 2007.

Both Duncombe and Baxi urged increased dialog between North American and European recovered fiber exporters as a way to ensure that shippers do not “play” one market off the other.

On the ground in North America, Steve Potter of CSX Rail, Jacksonville, Fla., urged recyclers to consider shipping more by rail as a way of avoiding highway congestion and lost time that can be accrued when shipping by truck.

Potter pointed to J.D. Power & Associates study results that have shown CSX growing steadily in customer satisfaction between 2004 and 2008.

He also pointed to the fuel efficiency of railroads as a reason why rail should continue to grow in cost-efficiency. One gallon of diesel fuel carries a ton of freight 423 miles by rail, according to Potter. “If 10 percent of truck freight moved to rail, that would save one billion gallons of fuel [each year],” said Potter.

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