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Logistics, not Covid, is main headache for recyclers

As nations and key businesses learn to cope with the Covid pandemic, recyclers around the world continue to be severely affected by logistical challenges and problems with supply chains. That was a key message from the latest online BIR ‘Challenge’ event.

The session was again chaired by Michael Lion who suggested to fellow panellists Mark Sellier (president, Global Metals Network) and Murat Bayram (md, EMR) that logistics problems had got worse since the previous Challenge three months earlier.

Bayram agreed, saying transport costs had risen sharply and recyclers faced higher demand for containers. ‘We can definitely say Covid-19, Brexit, trade barriers and regulations have shaken supply chains,’ he said. Sellier, who checked the latest rates before the event, felt price increases had stabilised and there was some availability. But he also noted a shortage of vessels with more incidents of re-routing and transhipment. ‘We have had containers in Barcelona, on a trans-shipment, waiting six weeks for another ship to get them to China,’ he pointed out. ‘Elsewhere, containers stacked and ready at ports are having to wait for three weeks.’

50 trucks, 40 drivers

Bayram spoke about a widespread shortage of truck drivers and quoted one company in Germany, where he was based, with 50 vehicles and only 40 drivers. ‘It’s hard to convince the youth of today to drive for a living,’ he remarked. ‘We have a challenge as an industry to convince the next generation that it’s great to join our industry and secure the materials of tomorrow.’

Lion noted that low-value consumable cargoes such as scrap would always struggle to find transport in such a market and thought that would hit recyclers’ cash flow.

Sellier felt that low interest rates and general liquidity meant cash flow ‘hasn’t raised its head to a massive degree yet’.

On the current impact of Covid, he thought trading had been ‘stop-start’ but recycling was widely seen as an essential industry and ‘I don’t see, apart from logistics, that things have been heavily impacted.’

‘Messaging is key’

The panel considered regulatory issues including the EU’s proposed Green Deal circular economy policy and tighter regulations in Malaysia. Members were joined by Dhawal Shah, president of BIR’s non-ferrous metals division and md of Metco Marketing in India, who called on recyclers globally to make a more concerted joint effort back their role in a greener future and stronger economies.

‘There has to be belief in what we do but [currently] it’s the other way round: we react to what comes our way,’ he said. ‘At a global scale we have never demonstrated the facts of the business we bring, the employment and the environment. All the stakeholders must come together. We need to glorify what we do – and go all out in the media.’ Shah concluded that BIR was in a good position to bring stakeholders together.

Sellier said it was all about messaging. ‘We have the information and we are the exports. We believe we are the solution not the problem.’ But he also warned about aligning with the political agendas of some environmental activists who did not share scrap industry belief in business and trade.

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