Environmental Services Update-February 2019
Edge Insights’ experts are constantly monitoring the Environmental Services industry in order to help ensure the best possible pricing and contract terms for our clients. The following report lists some of the recent news in the Environmental Services industry.
The U.S. Recycling Model Is Broken
With a contamination rate of well over 20%, the current U.S. recycling model is costing the system time and money as well as creating safety hazards for workers. Well-intentioned consumers who are trying to do the right thing by recycling everything they think could or should be recycled are causing more harm than good by placing inappropriate items in their recycling containers. Although the current recycling model seemed to be working for decades, China’s stricter regulations on recycling imports that got enacted last year exposed the fact that the current U.S. model is broken.
As highlighted in previous updates, China’s change caused havoc in the recycling industry by banning certain materials and implemented tight restrictions on others. The change accentuated the U.S.’s high contamination rate, caused commodity rebates to plummet, and recyclers to reevaluate their processes. Regrettably, with recycling costs continuing to increase, commodity values expected to remain low, and packaging becoming more complex, recycling in the U.S. will undoubtedly get harder before it gets better.
In response to the current state of the recycling market, many haulers and recyclers have recently reduced the number of items that they will accept in their single stream recycling. The typical change is to remove items that have low value and/or high processing costs while maintaining the more profitable items. As with any change, communication and implementation are key.
In order to try to educate customers on the changes, some haulers are including flyers with their invoices using simple messages like “Know What to Throw”, “Keep It Simple” and “Recycle Right”. The flyers combine these catch phrases with concise large pictures of the main items that can and cannot be recycled. Republic Services has even created an entire website to attempt to clarify what should and should now be recycled. The challenge for the haulers is to get their material into the right hands and to get consumers to read and follow the new instructions.
Fortunately, there is some good news on the horizon for the U.S. recycling industry. Product manufactures, haulers, and recyclers all agree that there are problems with the current recycling system. All three industries are now working together at being proactive, instead of reactive. They are actively participating in efforts to “rethink the stream” in order to correct the current problems and to address future issues before they occur.
The other good news for the U.S. recycling industry is that numerous domestic recycling facilities are currently under construction or in the planning stages. The new facilities should have a positive impact on the commodity prices for recycled items in the coming years.
In order for the U.S. model to improve, everyone needs to do his or her part. The best thing that consumers and businesses can do to help is to make sure they are recycling the correct items. The new rule is “When in Doubt, Throw It Out”. Please reach out to one of Edge’s experts if you have questions as to what can be recycled in your area or contact your hauler directly.
The Evolving Ton
At the Northeast Recycling Council’s (NERC) Fall Conference this past October, quite a few presentations focused on recent product packaging changes and their effect on the waste and recycling industry. Primarily driven by the growth of e-commerce, companies have been shifting towards more lightweight, convenient, and break resistant packaging. As a result, a ton of recycling material arriving at a Material Recovery Facility (MRF) today is a very different combination of materials from a few years ago. The waste industry refers to these changes in the recycling stream as “the evolving ton”.
It is a well-known fact that the shift to online shopping, usually referred to as the “Amazon Effect” because of Amazon’s early and continued dominance, has caused an evolution and disruption in the retail market. It is a lesser-known fact that it has also had a substantial impact on the waste and recycling industry.
Online shopping has caused a dramatic increase in the amount of boxes and packaging materials sent to consumers’ homes. MRFs are now processing much more of these materials than in the past because many of these items are now ending up in curbside recycling. Unfortunately, many of these boxes get rejected as trash because they are smaller than what the MRFs sorting equipment was designed to handle. As a result, these boxes are actually adding to the MRFs processing and disposal costs instead of its increasing revenue.
Manufacturers are also now using more diverse materials in their packaging design in order to save on shipping costs and to lessen damage in transport. As an example, goods like tuna fish, petfood, and dish soap are sometimes packaged in multi-layered pouches instead of metal cans. Although the materials in these pouches can technically be recycled, most MRFs cannot recycle the material because of the complex layering. Additionally, the design of a MRFs sorting process may actually result in these pouches contaminating other types of recycling if they are sorted incorrectly.
As another example of recent packaging changes, plastic bottles and aluminum cans are now much thinner than in the past. Although almost all MRFs were designed to recycle these materials, many more bottles or cans now need to be processed in order to produce a ton for resale than just a few years ago. Once again, the effect of having to process the extra material is adding to the MRFs processing costs.
Items other than packaging changes are also affecting “the evolving ton”. For instance, MRFs have seen a dramatic decrease of newsprint over the last couple of decades. This decrease, primarily caused by a shift to using online media, has been a major factor in the decline in newspaper subscriptions as well as other print media.
The Dumpster of the Future is Here
Several companies are now offering devices that can be mounted onto dumpsters in order to provide container fullness and content monitoring. These futuristic gadgets use wide-angle cameras and ultrasonic sensors to feed real time data to web-based software for viewing and reporting. The devices also contain a tipping sensor and GPS to verify that the containers are serviced on time and to track their location. Some devices also apply sophisticated logic to determine a contamination score.
The sensors in these units are enclosed in an extremely durable housing and need to be mounted in a certain position on the container to provide accurate data. The devices come with a long life battery that lasts approximately five years and their target market is for both generators and service providers.
Service providers can use this technology to help right size customer’s containers, optimize routes, divert contaminated recycling containers to landfills, charge customers for the contaminated loads, and to assist with customer training.
Generators can use the devices to right size their containers, manage contamination at the source, identify areas for improvement, and to train staff on best practices. The sensors can also be used to measure recycling rates, improve sustainability, detect illegal dumping, and to verify service schedules.
Although these devices have quite a few benefits, everything typically boils down to return on investment and cost savings. Upfront costs include the purchase of a minimum quantity of devices, as well as installation and training costs. Recurring costs include monitoring fees and costs for ongoing maintenance. Two additional drawbacks to the devices would be to get the haulers to agree to allow the devices to be mounted onto their containers and then managing container swap outs.
When taking Edge’s current customer base into account, Edge’s initial evaluation of this technology is that the costs currently outweigh the benefits. However, Edge will continue to monitor this maturing technology and continue to weigh the benefits against the costs for current and future customers.
Severe Weather Service Alert
When severe weather strikes, some waste customers may experience delays to their service schedule.
Although haulers attempt to maintain their service schedules, safety is their main concern and operational decisions are based on the conditions in each area. When a storm is in your area, please be aware that there may be delays and be sure that snow and ice is cleared from the area around the containers to allow access.
Annual Recycling Reports
Many local municipalities have implemented mandatory annual recycling reports for commercial customers in order to track the amount of waste material that is being recycled and in some case to apply for grants. As part of Edge’s service to our environmental services clients, Edge will help customers obtain the needed information and provide assistance to complete the associated forms. The reports vary by municipality, range from being simple to very complex, and are typically due early in the year. Many municipalities have implemented these reports to comply with state requirements such as Pennsylvania’s Municipal Waste Planning, Recycling and Waste Reductions Act (Act 101). Please contact Edge if you need any assistance.
At Edge, we constantly monitor the market for ways to help our customers improve their sustainability efforts and reduce costs. Please feel free to reach out to our experts should you have any questions related to the above articles or the environmental services industry.