Page 215 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

International Trade Procedures and Documentation

Notes Illawarra S&N Enterprise saw an opportunity for reusing a viable resource rather than
considering it as a waste product. The company estimated it could process the waste
dunnage and resell it back to clients for approximately half the cost of supplying new
dunnage.
What are the Environmental Gains?

From August 2002 to October 2003 AAL Shipping purchased 486 cubic metres of recycled
dunnage back from Illawarra S&N Enterprise.
This equates to approximately 50 trees not having to be cut down to supply virgin dunnage.
Approximately 12 cubic metres of metal strapping, cables and wire has been recovered
from vessels and recycled as scrap metal. This would normally be dumped at sea along
with the dunnage.
What are the Costs and Savings?
Current market costs for virgin dunnage range from $248 to $285 (+ GST) per cubic metre.
This compares to one standard price of $190 per cubic metre for recycled dunnage supplied
by Illawarra S&N Enterprise.

Using the example from AAL Shipping of 486 cubic metres for 14 months:
virgin softwood @ $248/m 3 $120,528 + GST
virgin hardwood @ $285/m 3 $138,510 + GST
3
recycled dunnage @ $190/m $92,340 + GST
This demonstrates potential savings for AAL of between $28,000 and $46,000 for the
14-month trial period (not including GST).
Where to now?
There is now acknowledgement throughout the industry that dunnage recycling is a
viable service that warrants ongoing industry support and recognition.
Indeed, during the trial it emerged that the demand for reused dunnage outweighed the
available dunnage supplied by AAL vessels. Alternative dunnage sources need to be
identified and secured from across the broad shipping, freight forwarding and stevedoring
industry.
Industry Acceptance
“As a result of the Illawarra S&N Enterprise dunnage recycling program, AAL Shipping
has noted an obvious environmental advantage. We will continue to use Illawarra S&N
Enterprise recycled dunnage and have taken additional steps to implement similar recycling
methods in Hobart.”
Question:
Discuss the environmental gains of the adoption of reuse concept in this case

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