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How to reduce logistics costs for containerized ferroalloys in Europe?

market insights

May 30, 2017

There is significant value in optimizing logistics for producers and traders of ferroalloys and metals. The key is to maximize the payload per container, which is the total weight of product and packaging loaded.

Easier said than done, here is a quick guideline to work it out:

First, you need to check the road regulations of all countries through which the cargo transits. For example, for vehicles with 5 axles and more, the maximum allowed total weight of a truck is 40mt in Germany, 44mt in Belgium and 50mt in the Netherlands.

Second, you need to work out the weight of the truck and the chassis. The weight of the truck and chassis can vary between 13mt and 15.5mt. Speak to your logistics partner to find out.

Third, you need to consider the weight of the empty container, the tare weight. To maximize payload, 20ft “heavy tested” steel containers can be used for transporting metals and ferroalloys. Their tare weight is typically around 2.4mt and they can be slightly more expensive than a standard 20ft container.

In a final step, you need to work out how the container can be packed. Most containerized ferroalloys cargos are packed in 1mt or 2mt big bags. Bag designs differ which can affect the loading options (poorly designed bags take more space). Depending on big bag design 10-15 2mt big bags can be loaded per container.

Now let’s look at an example. For a product stored in a warehouse in Rotterdam which needs to be trucked to a customer in Belgium, the maximum allowed payload in the best case is 28.6mt (44-13-2.4). There is zero margin of error in this calculation though. Assuming the costs to transport a container from overseas to a customer in Belgium are 2,000 $/container, 29 $/mt of product can be saved by using a payload of 28mt (14 big bags) rather than 20mt (10 big bags). A difference of 30%! In most cases, you will land somewhere in the middle between 20 and 28mt payload though. Also, keep in mind that above 20mt payload, the lashing and securing of the cargo plays an even more important role and can create some extra cost.

What are your experiences? We are curious to hear about your best practices!

Your metalshub team

Disclaimer: This blog is provided for information purposes only. While we do our best to provide you with the most correct information, metalshub cannot be held liable for any loss arising from any use of this information.

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