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Sonoco implements fees for tube and core scrap return based on OCC rates

Sonoco’s Tube & Core North America division is implementing a tube and core scrap return subscription service, effective July 1, 2020.

The subscription service is voluntary and will only be in effect if a customer chooses to return scrap tubes and cores to a Sonoco supplying facility.

Sonoco had been offering this service at no cost to customers, however the company says in a statement that fluctuations in the value of the returned materials, along with the rising costs of labour, freight and other processing costs, led to the decision.

Under the new program, when OCC is at or above $90 per ton, Sonoco will continue to offer a core scrap return program with no fees.

However, when OCC values drop below $90/ton (RISI’s – Southeast Region – High), a fee of $95 will be added to each invoice for new tube and core shipments.

At the point when OCC again increases over the threshold of $90 per ton, the service fee will be removed.

“Due to the recent experience with OCC volatility, Sonoco discovered that the value of our OCC bales was well below the processing costs associated with it,” says Mike Thompson, director of sales and marketing, tubes and cores for the U.S. and Canada.

“Sonoco, along with many other recyclers, has determined the necessity to set a protocol to manage costs with such a volatile commodity moving forward.”