2019 Recycling Industry Yearbook

ISRI.ORG 7 TRANSPORTING SCRAP The final processing step is preparing the scrap to be transported to scrap-consuming facilities. Some materials are compressed into bales; other loose materials fill sturdy sacks, cardboard boxes, shipping containers, truck beds, and rail cars. The recycler ships these specification-grade processed scrap commodities to facilities that have pur- chased them to make semifinished or finished products. Truck, rail, and barge are the three most common modes of transporting scrap within the United States. Of the three, trucks have the highest cost per ton. Rail can be less costly because rail cars have a greater tonnage capacity than trucks. More than 40 million tons of U.S. scrap materials originate on Class I railroads annually, according to figures from the Association of American Railroads. Rail shipping expenses have risen steeply in the past year, however, and those costs, as well as poor rail car availability and other barriers, have made this method of shipment less attractive. Barges and other waterborne shipments are the third major mode of domestic trans- portation for scrap. Although adverse weather conditions can significantly affect barge traffic, barges are often the lowest-cost option on a per-unit basis. Scrap export shipments move within North America via these three shipping modes as well as by oceangoing vessel. Although a large portion of U.S. scrap exports ship as bulk (unpackaged) cargo, container shipping has expanded the ability of recyclers to fill international market demand for recycled materials. GLOBAL SUPPLY AND DEMAND Recycling is a business driven by demand. Scrap-consuming facilities determine the quality and volume of scrap commodities they need and the price they are willing to pay. If recyclers can’t meet those requirements, the material does not close the loop and re-enter the manufacturing life cycle. Recycled commodities are a key global manufac- turing feedstock that meets about 40% of the world’s industrial raw material needs. Worldwide, manufac- turers consume about 900 million mt of scrap each year. About 20% of that volume, or nearly 180 million mt, is a result of global trade in scrap. You can find scrap almost anywhere on the planet you find manufactured goods: buildings, cars, boxes, bottles, cans, cellphones, and more. Global trade in scrap occurs because not every community has the infrastruc- ture and technology to collect and process recyclable material into specification-grade commodities. Further, local demand for a commodity might not match the local supply. For example, Turkey has the technology and capacity to produce many steel products, but it does not have sufficient domestic iron ore or ferrous metal scrap to meet its steelmaking needs. Steel producers in Turkey purchase ferrous scrap from around the globe, much of it from the United States, to make new steel products. This global trade in scrap recyclables makes U.S. recyclers less dependent on local markets to sell their scrap. It also makes U.S. scrap consumers less dependent on domestic recyclers for their supply of scrap.