Rising freight rates are pushing up premiums across the commodities spectrum

Aug 01, 2010 | 09:08 AM |

Keep on trucking—in theory, at least. In practice, a trucking shortage is threatening to force metals industry players to pay big time for transportation services as competition for available trucks heats up.

Those wishing to make spot metal purchases from traders in the physical market—be it to ramp up production or to restock inventories that had been depleted during the economic downturn—face longer delivery times and higher premiums due to tightness in the domestic trucking market.

"There's definitely a shortage of trucks, and it's going to affect premiums probably for the rest of this year and into next year," one Midwest copper trader told AMM.

According to traders, getting their hands on trucks in recent months has been no easy task, and end-use consumers are caught footing the bill.

"Starting about two to three months ago trucking began to get extremely difficult," one primary aluminum trader said. "It's literally that bad, and it's not a fuel-related issue this time. Now it's just very much an issue of availability."....

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