Simon Ellin, Chief Executive of The Recycling Association, spoke on the challenges facing the British recovered paper market in 2021.
Q: Mr Ellin, how has container shortage affected the recovered paper market so far? Are there signs that the situation might improve in January 2021?
A: At the moment, it is causing significant disruption. Members are getting daily cancellations and are having to re-book as far as 10 days ahead. Shippers are also reporting surcharges being added by carriers on top of current contracts. The shippers I have spoken to report that the situation should improve in January/February 2021 with fewer blank sailings planned. However, I still exercise caution as, despite the cessation of the Chinese route for recycling, it will still mean containers need to arrive back there and turned around quickly if the East to West demand continues.
Q: The registration scheme for exports to Indonesia will be in place from 1 January 2021. Have companies affected been able to finalize their registration in the UK and in Indonesia (via their customers)?
A: The registration process for Indonesia has been tortuously slow, but I believe all members who have submitted registrations are expecting to have everything in place to allow them to meet the 1 January deadline. What remains to be seen though is whether the Indonesian price justifies the extra work and administration members will have to undertake to supply the Indonesian market when easier options may well exist.
Q: Do you think there will be severe disruptions in deliveries to Europe in January?
A: I have some significant concerns here. As things stand, under a no-deal and even if there is a deal, it appears to be accepted that customs clearance requirements will mean delays at ports and the UK’s Road Haulage Association has predicted queues of 7,000 trucks at the UK side. We are in a just in time business and the one thing that is clear, is deliveries are unlikely to be on time in the early weeks/months!
Added to this, UK suppliers are going to see an increase in costs to cover the customs clearance and also to handle the VAT element post-transition period. We estimate that the costs of delivering from the UK to mainland Europe will increase by 20 – 25 percent from 1 January.
Mr Ellin, thank you very much for this interview.