Working in an agreement through the Far East Shipping Corporation, most of the shipping lines increased their prices for the transport of containers from October 1. There was a short term hiccup in trade as some exporters opted not to send material abroad but later in the month more exports of recovered paper and plastics were made.
The fact that shipping lines are not making as many containers available is starting to cause some disruption with the export trade.
David Symmers, IWPPA
The higher prices were paid by the export sector, typically US$600 a container or about £12 per tonne, but this was mitigated by some absorption of the extra costs by traders and overseas buyers.
However, now the UK trade says it is feeling a pre-Christmas squeeze by the shipping lines with them not only forcing prices up for moving containers to ports in the UK, but also with the lines offering a slower delivery of containers for loading with shortages in some areas.
Merchants, understandably, do now wish to speak publicly about the action of the shipping lines. One said that because the lines appear to acting on a common agreement to put prices up, the matter should be referred to the European Commission.
Another explained: “The squeeze is on this month, particularly with inland prices to move containers within the UK increasing. This is hitting northern merchants who are facing higher fees for transport of material to ports such as Felixstowe and Southampton.”
Some merchants were surprised that domestic cardboard mills did not drop their buying prices for used cardboard in October. However, there are now signs that prices may fall in November although the beginning of the month has started with prices only about £2 down on last month and some mills still paying October prices.
“Difficult”
David Symmers, chief executive of the Independent Waste Paper Processors Association, said: “It is a difficult situation. The fact that shipping lines are not making as many containers available is starting to cause some disruption with the export trade.”
Prices for higher grades – office material and whites – have not been facing the same pressure as the weaker grades with demand said to be very good. Material has been flowing into Germany and India is also taking office grades and other material, although some reports suggests that Indian mills are beginning to find they have good stock levels.
Prices for used newspapers have weakened within the UK with domestic mills said to be well supplied and the industry also considering that there is plenty of newsprint available for the newspaper publishing sector.
The sector is facing a possibly tougher time on the export market than board exporters with some overseas users of newspapers and magazines more reluctant to help pay towards the increase in freight costs.
Shipping lines have argued that they need to charge a realistic price for use of the containers. A spokesman for the trade and marketing department of NYK Group Europe Ltd – one of the members of Far Eastern Freight Conference which represents the shipping lines – said: “We have stuck to the revised ocean freight tariff and waste paper shippers have stuck with that and continued to make bookings. It seems to be going quite well.”
He added: “There are reports of various factories in the Benelux region full up as they are not shipping [waste materials] – but not in England. We are experiencing the same levels as we had previously. From our perspective the price increase is working. We are not suffering.”
Register for free to comment