NEW YORK New trucking
regulations scheduled to come into effect in 2013 have some
ferroalloys market participants concerned about logistics.
"It will take a lot longer for
material to arrive at a destination," one trader said.
The Federal Motor Carrier Safety
Administrations new regulations, which go into effect
July 1, include a requirement that drivers take a mandatory
30-minute break every eight hours, according to the
agencys website. This follows on the heels of regulations
that prohibit drivers from working more than 14 hours,
including time spent loading material.
"They (truck drivers) used to be
able to drive 14 hours," the trader said, with drivers
previously listed as off-duty when loading material.
The regulations led at least one
top logistics executive to conclude that trucking costs are on
the rise. "Right now, the industry is in the eye of the storm.
There are a lot of fundamental changes going on in motor
transport," Jim Ruiz, senior vice president of Pittsburgh-based
PLS Logistics Services Inc., said at AMMs Steel
Success Strategies XXVII conference in New York (
amm.com, June 19).
Fuel surcharges will continue to
be part of the logistics story, although some sources are
seeing a slight respite from rising prices. "There are rumors
that fuel prices by January could be below $3 (per gallon)," a
second trader told AMM.
But a third trader expressed
skepticism that trucking costs would fall even if fuel prices
declined. "Theyre going to put it to us no matter what,"
While trucking costs might
remain high, shipping rates are steady at low levels due to an
oversupply of vessels. "The market is in a total surplus," the
second trader said. "Too many vessels came on-stream and
theres not enough freight. We can get full vessels from
China to the U.S. Gulf for $30 (per tonne) or less."
"Youve seen the Baltic Dry
Index (an assessment of the cost of moving goods by sea)
plunging," the first trader said.