With signs of stability emerging in the metal industries,
producers are finally looking to get their products on the
move. But getting product from point A to point B is not as
simple as it may sound.
Orders are beginning to pick up and financial positions are
stabilizing, but increased metal demand for manufacturing and
fabrication is straining an already-taxed trucking
infrastructure. This means suppliers can expect to see a
growing incidence of delayed shipments in the immediate
Among the worst hit on the upstream side of the supply chain
are service centers, which form the intermediate link between
producers and consumers. The biggest issue has been
availability, sources said, noting that even the largest
carriers aren't always well equipped to respond to shipping
"The service from major carriers is a shadow of what it was
a couple of years ago," one copper and brass service center
The traffic manager at a Texas-based service center said his
company is having a difficult time contracting flatbed
trucking, noting that common carrier service has deteriorated
over the past 16 to 18 months. In particular,
less-than-truckload shipments are difficult to schedule. "If we
don't have 40,000 pounds to load, the flatbed guys won't show
up," he said.
The wait time isn't unique to those distributing copper and
brass. "We're having to wait longer for trucks, especially for
less-than-truckload shipments," a traffic coordinator at a
Midwest scrap metal processor told AMM. The trucking
issue isn't restricted just to flatbed trucks, either. "I would
say that we're having difficulty with full vans
(especially)-we're seeing spot rates up now," he said.
Some of the country's largest distributors have insulated
themselves from broader trucking capacity issues by having
their own fleet of trucks, which allows them to more closely
align their shipping schedules with actual demand and even
lease their trucking capacity to outside users when demand is
"I'll bet it's probably less than half that use their own
trucks, but as far as actual numbers, as far as volume is
concerned, I'd say those that own do 75 percent in volume," the
copper and brass service center source said.
However, the proportion that doesn't own its own carriers is
finding it difficult to place shipments from producers and to
And with carriers running under tighter cost structures,
some in the service center industry say they're concerned about
the impact of delays and security concerns on their
"We've seen an increase in freight claims from common
carriers; people are trying to do more with fewer people," the
service center operator said.
The problems have been exacerbated by financial difficulties
that still face the trucking industry. "A lot of capacity has
been taken out of the market. A lot of trucking operations have
closed," the Midwest traffic coordinator said.
Indeed, while the rate of trucking company bankruptcies has
cooled since its peak in late 2008 and 2009, companies are
still going under and capacity is still being reduced.
At the same time, however, shipments from distributors have
ticked higher, exacerbating the problem. Steel shipments by
U.S. and Canadian service centers totaled more than 3.7 million
tons in June, up 30.5 percent from a year earlier, according to
Metals Service Center Institute figures, putting the five-month
tally at nearly 20.5 million tons, up 18.7 percent from the
same period last year. Likewise, shipments of 136,100 tons of
aluminum products from U.S. and Canadian service centers in
June were up 34.9 percent from a year earlier, and the
year-to-date total of 684,400 tons was 16.1 percent higher than
in the first five months of last year.
These shipments mirror a broader increase in industrial
production and demand for shipping. Production in nearly all
major sectors rose in May, with 1-percent growth in the
production of consumer goods boosted by sizeable gains in
primary and fabricated metal products.
As manufacturing continues to lead a nascent economic
recovery, a shipping infrastructure that was deeply damaged
during the recession struggles to keep pace. While service
centers continue to juggle inventories, sources say that
getting the metal to the next stage of the production chain
might be a bigger headache.