- The recycling industry, which is heavily dependent on road transport, is feeling the effects of the current trucking shortages and high costs, Plastics Recycling Update reported.
- Pending ELD enforcement, a driver shortage and ongoing weather challenges, such as recent hurricanes and the polar vortex, have also had an impact on transport availability.
- Spot rates and contract markets are also playing a significant role in limiting cost effectiveness and value.
The tightening of the transport market has far-reaching effects that go beyond delivery of new goods to businesses and consumers.
Even last autumn, before the trucking mandate came to the fore, truck availability was shrinking, as evidenced by farmers in Washington state unable to move produce east as needed. Though eligible drivers were reaping rewards, the number of applicants accepted remained low, leading to a perpetual shortage and rising rates.
Now the recycling industry is facing the transport shortage with even less margin for error.
"Recycling materials, whether for sale or purchase, are not very high in supply chain need," Avery Vise, V.P. of trucking research at FTR, told Supply Chain Dive. "In times of crisis, it's just not up there with perishables, like produce."
Additionally, Vise suggests that the economics of the recycling market also make a difference. "This is a low-margin industry," he said. "That makes it sensitive to cost, which could lead to a reconsideration of shipping, particularly since most vendors and buyers are likely to have access to storage, meaning there's little reason to rush."
"However, the issue of delayed shipping does become problematic when the cost of storage begins to eat into profits, and/or equal the price of transport. That's when decisions have to be made," he concluded.