April 2019 | News | Vertical Focus

VERTICAL FOCUS | Steel

Tags: Supply Chain Management, Automotive Logistics, Supply Chain

The body of the 2019 Kia Forte is made up of 54% AHSS.

Auto Industry Steels the Show

As the automobile industry moves to keep up with shifting consumer expectations, safety regulations, and Corporate Average Fuel Economy standards, certain types of steel use are expected to grow considerably. They include:

  • Advanced High-Strength Steel (AHSS), which allows automakers to give consumers the body strength they want in their cars and help the environment at the same time. Studies indicate that applying AHSS throughout vehicles nationwide could reduce greenhouse gas emissions from automobiles by 12%.
  • Cold-rolled steel, which is used in exhaust, boss mounts, and door hinges, among other elements.
  • Cold-drawn steel, which is pulled through dyes at room temperature during the forming process, typically includes components involved with fuel injection or for exhaust systems. In some cases, cold-drawn steel is utilized in seats and one-way clutches.

—ThomasNet

3 Quick Questions

Transporting steel requires specialized expertise. To get the lowdown, IL spoke to Ben Goldberg, president of JIT Warehousing and Logistics, a Savannah, Georgia-based logistics services provider.

1. What are the different types of steel shipments?

Steel imports move via break bulk, and exports or domestic shipments are transported by rail. Both imports and exports move in containers.

2. What are the best practices for securing various types of steel?

The best practices depend on the type of steel and its final use. As an overview, though, you can secure steel shipments with chains and binders, ratchet straps, blocking and bracing, coil racks, load lock bars, and straps.

3. What specialized equipment is needed?

Most steel shipments are transported via flatbed trucks. In these cases, use coil racks, chains, and binders to secure the cargo, and use tarps to cover and protect it. Softer products require edge protectors and ratchet straps. Van loading requires load lock bars, wooden floor bracing, and straps for security.

The Future After Steelmaggedon

With U.S. steel capacity set to increase by 20 percent around 2022, the pending "steel glut" will push down prices for steel commodities. The result? A situation Bank of America Merrill Lynch has coined "Steelmaggedon."

As the industry tries to restart capacity that was shuttered during the 2008-2009 downturn, a second wave of additions and upgrades is predicted to hit as steel mills continue to expand.

Steelmaggedon will likely impact the transportation industry in a major way. To understand what those effects will be, it's crucial to remember not all materials are created equal.

Producers need to be put into categories. One contains older, larger, integrated mills that are designed to maintain higher inventories of finished goods. The other contains newer, smaller, electric arc furnace mills, also known as "mini-mills." These produce a narrower range of products and utilize more efficient technologies.

Though all mills will likely be impacted when excess capacity hits, experts say the U.S. steel industry will likely emerge with a smaller, more efficient footprint as mini-mills take over.

If this new capacity is successful, some steel producers will be forced to take potentially aged and inefficient capacity offline. This purge of capacity will ultimately drive a leaner, more streamlined steel industry.

Flatbed and specialized transportation shippers count on carriers to move their products effectively. Many manufacturers have been through multiple pricing fluctuations. If businesses structure their supply chains to be efficient, regardless of pricing environments, they'll feel less of an impact associated with the looming steel commodity swings.

—Andrew Houser
Vice President of Business Development
Daseke






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