Letters. Rates on scrap iron. Reply to comments - Environmental

Rates on scrap iron. Reply to comments. Gerald Goldman. Environ. Sci. Technol. , 1974, 8 (1), pp 7–7. DOI: 10.1021/es60086a605. Publication Date: Ja...
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transportation of scrap. We are not convinced that we should impose such a pricing scheme upon the railroads and the shippers they serve, even if, as seems very unlikely, we had the authority to do so. Robert L. Oswald, S e c r e t a r y Interstate C o m m e r c e C o m m i s s i o n Washington, D.C. 2 0 4 2 3 (This letter represents t h e informal v i e w of t h e writer, a s stated to C o n g r e s s m a n D o n Fuqua, and i s not binding o n this Commission.)

Dear Sir: The statements by Mr. Oswald reflect neither an understanding on his part of the Institute's position on discriminatory freight rates nor the facts and evidence presented to the Commission. Although space does not permit a thorough rebuttal, it must be noted that Mr. Oswald's portrayal of the Institute's position that freight rates discriminate against the movement of ferrous scrap simply by a "surface comparison of rates," is totally incorrect. lSlS has maintained that the relationship between rates on scrap iron and iron ore should be equitable which does no1 necessarily mean equal. The lSlS position is based on expert metallurgical testimony before the ICC that scrap iron competes directly with iron ore and therefore the rates should be equitable, that is, based on iron units contained in the competing products. To the Institute's knowledge, no creditable evidence has been submitted to the ICC which contradicts this statement and, in fact, the railroads' metallurgical witness in Ex Parte 281 agreed, under cross examination, that scrap iron and iron ore are "trade-off" items and as such obviously compete. l S l S is not asking the ICC to hold scrap rates at "depressed levels." In fact, the ICC, in an order served October 10, 1973, in Ex Parte 270 (SubNo. 6 ) , stated that, "the 1969 burden study discloses that iron and steel scrap is one of the top 20 positive revenue contributors for movements within Official Territory" while iron ore is shown "to be one of the top 20 deficit contributors to railroad net revenues." These results are undoubtedly influenced by gross inequities in the existing railroad freight rate structure. l S l S is not asking the ICC to hold down the rates on scrap iron so as to burden other commodities. Government statistics show that scrap iron is apparently subsidizing the move-

ment of other commodities. Evidence before the ICC has clearly established that scrap iron rates are disproportionately high and should be properly adjusted downward. Based on the record, there can be no other conclusion but that present railroad freight rates discriminate against and restrict the movement and recycling of scrap iron and steel, the major recyclable commodity, to the detriment of the environment. Gerald S. Goldman, D i r e c t o r of Transportation Institute of S c r a p I r o n and Steel, I n c . Washington, D.C. 20006

Dear Sir: The article "Transportation: bugaboo of scrap iron recycling (ES&T, May 1973, p 408)" was interesting. Reading the September Currents, which quotes a Council on Economic Priorities report that suggests a token interest by the steel industry in consumer-used scrap for steelmaking, I believe more is involved in the inability of the scrap industry to sell their product to the steel industry than transportation rates. Steel has a tremendous investment in iron ore mines and ore boats. Steel enjoys stable iron ore prices and low transportation rates, the latter of which is attainable through shipload and heavy unit train shipments. Conversely, steel has a very small investment in consumerused scrap. Shippers of recycled scrap ship from a great number of locations and in small quantities of freight cars. Scrap prices fluctuate and are not as stable as iron ore prices. I believe scrap iron recyclers will achieve marketing success only after they understand the heavy investment made by the steel industry in natural resources, provide a reasonably priced product in quantity to match iron ore costs when a steel manufacturer is considering new investment in natural resources and/or ships, and then prove to the railroads that they will ship heavy tonnages continuously from a recycling plant to a steel mill. All of the metallurgists you can muster before the ICC to plead a case of competition between iron ore and scrap iron are worthless if the steel industry cannot accept this in light of their heavy capital investment in natural resources, as well as an assured supply of resources at a steady and reasonable cost. Marcus S. Kostolich Akron, Ohio 44313

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V o l u m e 8, N u m b e r 1 , January 1974

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