LONDON Trucking costs appear poised to rise yet again
next year for U.S. aluminum market participants.
In addition to a driver shortage and a potential rise in fuel
costs, sources are closely watching the low water levels of the
Mississippi River, arguing that this could eventually affect
truck availability and costs.
Low water levels in the northern part of the Mississippi have
already led to delays of steel raw material shipments (amm.com,
Nov. 28) and ferroalloys (amm.com, Dec. 7). Although the
majority of aluminum is shipped via truck or rail, sources say
that should the barge delays persist, it will ultimately have a
trickle-down effect on the aluminum market.
I have been watching the low river levels. ... Its
impacting large traffic (for other industries). Not a lot of
aluminum or alumina is sent (via the river). And if coal or
steel scrap cant go by barge anymore, they can only go
via truck or rail, a trader said. That will take
trucks away from aluminum, which could definitely impact the
price and availability of trucks (next year).
Theres not enough capacity to take everything from
the river and put it in trucks ... if that barge traffic is
converted to trucks in huge numbers, he added.
One producer agreed that the Mississippi River issue could pose
a problem for the aluminum market, and a consumer said he was
watching the situation closely, but both agreed that it has not
become a major issue yet.
Its a concern, but its not a fear yet.
Its a Defcon 3, not 5, the trader added.
The shortage of drivers and fuel costs that have continued to
rise show no signs of abating, sources said.
There are always (price) increases. Year after year,
its always a little more difficult. The main thing for
the trucking industry is to find drivers, the producer
said. Its not the most exciting job. And as a
parent, youre not going to tell your kids to go into
Obviously theres a driver shortage. And unless
youre addressing it, its going to have a major
impact on the (aluminum) industry, a service center
According to an OHL International report based on data from the
U.S. Bureau of Labor Statistics, the trucking work force
actually increased 0.27 percent month over month in October,
but the uptick was so minimal that sources are still reporting
a scarcity of trucks.
Freight is getting a little more difficult. Just seems
like its getting harder every day to find trucks and get
the metal moved, which is surprising considering what the
unemployment rate is. Youd think people want to work and
drive trucks, a second producer said. Im sure
people will have to pay more for trucking (in 2013).
One way to avoid rising trucking costs is to run your own
fleet, the service center source said.
We have our own fleet. It comes along with more headaches
than I want, but it guarantees that I am in control of my metal
units and its cost-competitive, the service center
source said. But (truck) pricing is going to keep rising
until driving positions become attractive to younger
Sources are also watching fuel prices closely, and they remain
mixed about which direction they will go after President
Obamas re-election in November.
I think if (Mitt) Romney got in, energy costs would come
down. Hes very much of the drill, baby, drill
mindset, the second producer said. But I think
Obama and the Democrats are smart enough to figure out that if
oil goes from $90 to $120 (a barrel), they have a problem. They
will do whatever (they can) to not get it to $4 (a
Average U.S. fuel costs the week of Dec. 10 were $3.35 a
gallon, according to U.S. Department of Energy statistics.