A DECISION to modify shipping arrangements to BlueScope Steel's Hastings plant may mean further job losses.

The changes come four months after the closure of the hot strip mill at the Hastings Long Island Point, which resulted in more than 250 workers and contractors losing their jobs.

Steel will now be transported as hot rolled coil rather than slab from the company's Port Kembla site to Hastings.

General manager supply chain and processing Ingilby Dickson said steel would be transported via rail rather than the current shipping arrangement.

"Effective late 2012 we will transport approximately 650,000 tonnes per year of hot rolled coil feed for the Western Port production lines from the Port Kembla hot strip mill via rail," he said.

"We have renegotiated the contract with our rail operations partner Pacific National to facilitate the changes."

Mr Dickson said the changes flowed from the hot strip mill closure. "As part of the structural changes to BlueScope's Australian businesses, progressively implemented during the past several months, the Western Port hot strip mill has been taken out of service and this has necessitated a change of feedstock for Western Port's operations," he said.

"The benefits of this change include savings of around $1 million per month over the current cost structure and improved material handling efficiencies at both the dispatch and destination ports."

Under the current arrangement, steel is shipped in slab form via the Iron Monarch ship, which has been specifically designed for that purpose.

"While the Iron Monarch and her Teekay Shipping crews have served us well over many years transporting slab from Port Kembla to Western Port, she is a modified roll-on roll-off vessel fitted specifically to carry slab," Mr Dickson said.

"At 38 years of age she is approaching the end of her serviceable life and is unable to carry hot rolled coil without costly modification."

The Iron Monarch is expected to be sold. Teekay Shipping declined to comment on the impact the change would would have on local jobs.