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Hurricane tightens truck freight for US Al

11 Sep 2017 23:06 (+01:00 GMT)
Hurricane tightens truck freight for US Al

Houston, 11 September (Argus) — Hurricane Harvey has significantly tightened availability of spot truck freight for most participants in the US aluminum market in the past two weeks.

Aluminum scrap buyers and semi-finished product sellers have noticed a deterioration in the availability of trucks following Harvey and are expecting conditions to worsen once rebuilding efforts begin after Hurricane Irma, which made landfall in southern Florida yesterday and has moved north.

Transportation of federal disaster aid supplies has siphoned many trucks out of the midwest to the Gulf Coast, exacerbating a moderate shortage that has existed for years. An aging driver population and a slow pace of replacement are the two major long-term factors causing truck scarcity.

One US seller of aluminum extrusion billet has noted a 33pc jump in truck freight rates over the past two weeks to as much as 6.75¢/lb from a former average rate of 4.75¢/lb. During Hurricane Harvey, which made landfall in east Texas on 25 August, some even received quotes as high as 14¢/lb.

A seller of secondary aluminum ingot said his company recently sent potential delay warnings to customers who typically receive just in-time delivery, because of limited truck availability.

Aluminum scrap buyers have also noted the shortage, but because some secondary smelters and rolling mills have high raw material inventories, the tightness has not had a dramatic effect yet for all.

Still, one consumer of used aluminum beverage can scrap has noted a tightness of intermodal rail containers, which are used to transport scrap from the coastal states to the midwest. Some facing reduced access to trucks have pivoted toward using more intermodal transportation, causing the tightness to spill over.

Buyers and sellers with access to dedicated fleets are less at risk of complications.

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