DENHAM, N.C. (Jan. 31) — Dow Reichhold Specialty Latex L.L.C. will apply a variable surcharge on the price of any product containing butadiene in North America effective Feb. 15.
The surcharge will range from 1 cent to 4 cents per wet pound of latex shipped.
Dave Gartshore, Dow Reichhold's director of sales, said the additional charge is aimed at offsetting increased freight costs associated with shipments of butadiene, which is a prime raw material used in production of the firm's products. The company said it expects the surcharges from rail carriers for shipments of butadiene to the firm's production sites to total millions of dollars in 2007.
The range of the surcharge amount will reflect the percentage of butadiene used in the finished product, the firm said, adding that it will advise customers of the exact amount based on the specific product ordered.
While the surcharge will be implemented in mid-February, the company said it will monitor the situation and make changes, including reductions, when it´s appropriate.
Gartshore said that in December, the U.S. Department of Homeland Security proposed regulations requiring rail carriers to better track and protect shipments of certain hazardous and toxic materials. "The costs to rail carriers associated with the proposed regulations," he said, "coupled with disproportionately high insurance costs for shipping these materials, have resulted in a surcharge on every pound of butadiene delivered to our company."