High demand in US road haulage sector raises costs for metals industry

The tightness in the road haulage in the United States is unlikely to ease before the end of the year, indicating that the elevated costs being seen in the metals industry will probably continue for the foreseeable future, according to industry experts.

“We’re right at 100% utilization. Maybe by the end of year it’ll drop to 97% or 96%, but that’s still very hot compared with the past three or four years,” FTR Transportation Intelligence’s vice president of trucking research, Avery Vise, has told American Metal Market. Indeed, many metal market participants said that freight demand is consuming capacity and pushing prices upward on the spot market. “Freight rates have literally doubled in the past two months,” one aluminium alloy supplier said. “In an industry that works on a [slim] margin, additional freight costs are eating up margin very quickly.” One base metals trader said that he “was forewarned” about the tightness in trucking, “but not to the extent that we’ve experienced.” He noted that trips that usually only take one or two days are now taking five days, because of a shortage of vehicles. The strong US economy is the main driver behind the tightness...

Published

January 18, 2018

18:40 GMT

New York