Steel shipper highlights ‘Rastatt emergency’ logistics challenges

9/10/2017

Swedish steel company SSAB this week highlighted some of the logistics and supply chain challenges posed by the closure since last month of a key section of the Rhine Valley rail freight corridor in southwest Germany.

As reported today and multiple times recently in Lloyd’s Loading List, the disruption to supply chains from the closure of this key European north-south intermodal corridor has led to delays, cost increases, and in some cases shippers shutting down manufacturing processes.

Per Bondemark, VP and chief procurement officer at Swedish steel company SSAB, and also chairman of the Swedish Shippers’ Council, told Lloyd’s Loading List: “SSAB is shipping approximately 60 railcars per week to northern Italy. Due to the Rhine Valley rail closure, we currently have a total stop for railway shipments to our customers in Italy.

“We are working on finding other routes and other modes of transport to mitigate the situation. For example, we are looking for truck transports, but it is very difficult to find the capacity and if we find it, it will be expensive. We are also looking at sea transportation as an alternative, but again it is difficult to find the capacity with short notice.

“So far, we have not closed any of our mills due to the rail closure, but if we don’t find a transport solution shortly, we will be forced to reduce the output in some of our production lines, which of course will hit some of our customers and, at the end of the day, our business.”

And the disruptions are obviously not limited to Sweden’s steel sector. “I have talked to some other Swedish shippers, and it seems that the forestry and pulp and paper industry are the ones that mostly suffer from this,” Bondemark said. “Like us, they are trying to find other routes and other modes of transport to mitigate the situation. I also know that importing companies in Sweden suffer from the situation, for example when it comes to importing groceries.”

“In a broader perspective, I think it is important that the politicians highlight the importance of the trans-European transport network and increase the collaboration in order to make the transport system more robust and less sensitive to disturbances like this one.”