Environmental Services Update-September 2018
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.
China Announces 25% Tariff on Imported Recycling
Starting August 23, 2018, China started imposing a 25% tariff on $16 billion of certain U.S. goods, including scrap. The tariff is in response to the U.S. enacting a 25% tariff on $16 billion of Chinese goods effective on the same date. China’s new tariff covers multiple recycling items including cardboard, paper, plastics and a number of scrap metals. The implementation of the tariff will undoubtedly add to the current turmoil in the U.S. recycling markets caused by the previously enacted product bans, tightened inspections and stricter contamination rate implemented by China’s National Sword policy.
Below is a summary of China’s National Sword policy to date.
- –In July 2017, China announced its plan to ban 24 types of solid waste and recyclables and that it would impose a nearly impossible to meet .3% contamination rate. The announcement was greeted with some skepticism since China had a heavy dependence on the imported recyclables.
- –However, on January 1, 2018, China placed a ban on 24 select categories of scrap as part of a promise to move away from all scrap imports by 2020.
- –On March 1, 2018, China banned additional items and enacted a .5% contamination rate on the recyclable items that it continues to accept. China also enacted Blue Sky 2018 as a 10-month long period of ‘special actions’ against foreign garbage smuggling as the latest evidence that they are serious about keeping foreign garbage out of the country.
- –On May 4, 2018, China announced that is has halted all US scrap imports for one month in a surprise move.
In case you did not see it, Edge’s May 2018 Environmental Services Update covered the effects of National Sword in detail. Click here.
China’s new tariff adds yet another cost to an already struggling US recycling industry which will undoubtedly impair the already reduced scrap exports to China. Reducing the exports will have ripple effects of more stockpiling of material and probable reduced rebates.
Watch for future quarterly updates for a report on the added effects of the new tariff.
Driver Shortage continues to be a Top Issue for Waste Haulers and Recyclers
Over the past few years, waste haulers and recyclers have been finding it more difficult to find CDL applicants that want to work in the waste industry. During a recent Professional Recyclers of Pennsylvania (PROP) meeting, haulers and recyclers discussed the shortage and how the electronic logging device (ELD) mandate that took effect late last year added to the problem.
In December 18, 2017, the Federal Motor Carrier Safety Administration (FMCSA) implemented a new electronic logging device (ELD) mandate. One of the main purposes of using an ELD is to automatically record a driver’s driving time and other hours of service data. Where a manual logging system leaves some room for tweaking the numbers in order to run extra hours, the new devices are forcing companies and drivers to strictly adhere to daily hour limits that in affect have a negative impact on some driver’s pay. Unfortunately, the side effect is an added deterrent for some current drivers or future candidates.
With unemployment at historic lows, employers are dealing with stiff competition for workers in general. Mechanics, dispatchers and welders are also in high demand. As a result, companies are developing retention programs to retain their highly valued employees.
In a May 28, 2018 article in The Washington Post, the American Trucking Association estimates that about 51,000 more drivers are needed to meet the demand of companies like Amazon and Walmart.
The signs of the driver shortage are everywhere:Billboards show immediate openings for drivers.
- –The first banner ad on Advanced Disposal’s home page reads “DRIVERS WANTED…Apply Today!”
- –A quick look at the job postings on a few of the major haulers websites showed each advertising for hundreds of driver job openings. Many openings advertise signing bonuses of up to $5,000.
- –Audubon, PA based waste hauler J.P. Mascaro recently asked a township to allow longer operating hours for its landfill so that drivers are not using their allotted daily time sitting and waiting for the landfill to open.
- –P. Mascaro also recently opened a recruitment and training center in Pottstown, PA to act as a hub to hire and educate career seekers.
Autonomous vehicles may help with the driver shortage at some point in the distant future but the National Waste & Recycling Association (NWRA) expects the situation to get worse before it gets better.
Because of the driver shortage, haulers in certain areas of the country have had to adjust their operations, postpone certain collections, and in some cases even turn away customers.
Action News Jax recently reported on August 10 that Jacksonville, FL issued fines to its three service providers after ongoing complaints of missed collections (over 42,000 so far in 2018 compared to 46,500 for all of 2017). According to Waste Dive, when contacted by Action News Jax for the article, Republic Services cited higher than expected collection volumes and an ongoing labor shortage.
Edge is monitoring this situation and continues to help customers with any service issues, some of which are possibly related to the driver shortage.
Many major retailers are switching to the more descriptive How2Recycle labels on their products.
The How2Recycle website states that its mission is to get more materials in the recycling bin by taking the guesswork out of recycling. The labels they introduced identify what parts of the packaging can be recycled and how each part should be prepared for recycling. Many major retailers like Aldi, Wegmans, Kellogg, and McDonald’s announced that they are switching to more descriptive recycling labels or have already switched.
How2Recycle began in 2008 as a project of the Sustainable Packaging Coalition. Although the How2Recycle label completed a soft launch in 2012, only a dozen or so major companies started to use the labels and only on select products. As of December 2017, the program consists of over 65 member companies that place the How2Recycle label on packaging.
Many major retailers like Aldi, Wegmans, Kellogg, and McDonald’s announced that they are switching to more descriptive recycling labels or have already switched.
The labels have four parts as indicated below (top to bottom):
- –how to prepare each component for recycling
- –icon showing typical recycling availability
- –type of recyclable material
- –recyclable parts of packaging
Below is a sample label for a multi-component container.With all of the changes that are affecting the recycling industry, it is now more important than ever to watch what goes into recycling containers. Hopefully this change will help consumers and businesses to ‘Recycle Often, Recycle Right’.
For more information on recycling labels, visit :