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Scrap shipping costs set to rise at Gerdau mill

Keywords: Tags  ferrous scrap, steel, Gerdau Long Steel North America, Sayreville NJ, scrap prices, Amtrak, weight limits, Sean Davidson

NEW YORK — The cost of shipping scrap metal to Gerdau Long Steel North America’s mill in Sayreville, N.J., is likely to climb after the mill announced it would not allow trucks to exceed state-imposed weight limits.

The mill said it would restrict all trucks entering or leaving the mill to a maximum gross weight of 80,000 pounds due to New Jersey State Police activity at its scalehouse and on the approach road to the plant, it said in a letter to truckers and dealers/suppliers.

Police "have focused in on the overweight trucks entering and leaving our facility. Due to the serious safety concerns we have with the overweight trucks dumping scrap in our yard and also the violation of the law, we will continue to restrict all trucks entering or leaving the Gerdau Sayreville mill" to the maximum weight in cooperation with local and state police, ensuring compliance with state Department of Transportation regulations, the mill said in the letter.

Scrap deliveries to the mill have slowed over the past two weeks due to the added police presence, according to market participants in the region. One source said that some suppliers have opted to take their scrap in containers to export docks because they can move more scrap in a single box.

Suppliers to Gerdau can now ship less than 40 short tons, or 35.71 gross tons, per truckload, while suppliers loading containers to export docks can achieve at least 10 percent more on average. "(Export) containers can hold more because the net weight of a truck, chassis and container is much less than a tractor and dump trailer," a second source said.

"Sayreville is a problem because of this (weight restriction)," the first source said. "It will force Gerdau to pay increased prices for scrap to import by rail. The local trucks and those not local will be forced to the docks."

A third source said that in addition to the 80,000-pound limit on trucks, the mill also has issued a 263,000-pound gross weight limit on rail cars because they travel on Amtrak rails. "(This) will make transportation of scrap more costly into Gerdau Sayreville. These weight restrictions on scrap deliveries coupled with strict scrap quality standards will only further restrict their scrap supplier base," he said.

Tampa, Fla.-based Gerdau would not comment on the weight restriction or the possible impact it could have on prices for scrap delivered to Sayreville.

A state police spokesman said the monitoring was part of routine police work and did not specifically target Gerdau. The spokesman did not disclose whether any trucks had been caught carrying excess weight.

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  • Apr 18, 2013

    I find it aggravating that over the last 30 years, the safety and effeciency of tractors and trailers has dramatically increased (think of a 2013 Peterbilt vs. a 1983 tractor), but many of our DOT laws continue to embrace antiquainted ideas. Modern rigs are capable of safely running at 100,000 lbs. and the restriction to 80,000 GVW costs the US economy BILLIONS of dollars in ineffeciency. It saddens me to see a forward thinking, innovative company like Gerdau capitulate to the harrassment of over zealous enforcement drones.

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