Global Fastener News

Darling at SFA: Freight Charges Compounding Cost Hikes

Jason Sandefur

While hikes in Asian steel prices get lots of media coverage these days, other factors are compounding cost pressures. In December 2007 the ports of Los Angeles and Long Beach approved a $35 TEU ($70 for 40 foot containers) cargo fee on containers entering or leaving the ports by truck, Bruce Darling of Porteous Fastener Co. told the Southwestern Fastener Association. This fee is being paid by cargo owners. The ports are keeping these funds in a Clean Trucks Fund to be used exclusively for new trucks or retrofits.
Then on January 8 the same ports announced an additional $15 per TEU fee to be used for costs of infrastructure projects. The ports’ commission also approved a $30 fee to go into effect January 1, 2009, and an increase to $36 per TEU to begin sometime in 2010.
Spikes in energy and transportation costs are adding to the burden. Around the beginning of 2008 both Nucor and Infasco raised prices between 4% and 10% related to rising energy and hauling expenses, as well as hikes in steel costs, Darling noted.
By mid-January Nucor advised its customers that the price of scrap had increased by $80 per ton in the last week. At that time CHQ wire rod had risen by $30 per ton since November 2007 and increases of $30 during the first quarter of 2008 were predicted.
Powers Fasteners announced a 4% increase in February, while Infasco’s prices rose 8%.
On March 17 Nucor announced its second price increase in as many months. The 6-10% increase was attributed to increasing costs of base steel, scrap steel surcharge, alloying elements, energy and freight. Scrap steel current price is $430/ton, its highest level since 2004.
“Costs continue to rise,” Darling stated. “While the amount could very by country, supplier, or importer, increases we’ve experienced in the last 3 months have been approximately 21% on low carbon hex, carriage and lag bolts; 17% on nuts, 20% on small screws and 34% on washers.” E-mail: bruced@porteousfastener.com �2008 FastenerNews.com