By Michael Buono
Published in the April 2002 issue of Today’s Facility Manager
Only 20 years ago, fms began recycling in response to government mandates. At first, most generated an income stream from various recycled commodities. Then, hauling rates rose precipitously while the value of recycled commodities plummeted due to the spate of same. Landfill fees escalated, along with the administrative costs for staff hours spent on recycling and waste collection activities, accounting functions, and regulatory compliance. In short, recycling became both a monetary disaster and an administrative nightmare for many fms.
However, there are ways to improve recycling practices, both in terms of reducing waste and in lowering the costs of removal. By understanding the available options, fms can make the best choices for their organizations and reap significant benefits.
In-House Waste Expertise
Effective and efficient waste management requires industry knowledge and training. Simply issuing an RFP once a year for recycling and waste services is no substitute for knowledge. Fms would never purchase new HVAC equipment, for example, without familiarizing themselves with the intricacies of such a system and taking the time to research the market and comparison shop. To maximize savings and performance in the recycling/waste management area requires the same due diligence.
Most state Departments of Environmental Protection (DEP) offer programs designed to acquaint members of the business community with the current practices in recycling. Frequently, this includes ways to comply with applicable federal and state regulations.
Fms should consider joining one of the many nonprofit organizations that focus on business sustainability so they can take advantage of the specific recycling and waste management programs those groups offer from time to time.
Unfortunately, there are no short cuts to developing expertise in recycling waste management. But the time invested in obtaining the knowledge necessary can result in significant savings.
Outsourcing Waste Management Needs
As previously stated, many fms simply do not have the time to become waste management and commodities experts and do not have the budget to add such individuals to their staff. In those circumstances, the best option is to outsource those activities. There are several different ways to do so, each with a specific focus.
Waste management service brokers attempt to offer significant savings to large scale companies with multiple service locations and a steady stream of recyclables and mixed waste. Retail chain stores, multi-location supermarkets, and other such large businesses are the core of brokers’ clientele.
In those arenas, brokers parlay the huge scale and constancy of such waste streams into heavily discounted services from waste haulers, often by combining several clients in a particular region and having haulers compete (in terms of price) for that contract area’s many service locations. They work with the largest recycling centers in a region to obtain the best prices for materials.
The disadvantage of outsourcing with a broker is the loss of both direct control and of site specific cost data. Choice of haulers, frequency of collections, recycling practices, and quality of service issues are exclusively within the brokers’ purview. Site specific cost data, necessary to many fms, is usually unavailable, since brokers bundle all locations to receive the lowest price from haulers and recycling centers.
Individual businesses operating from a single location will usually find that brokers are not willing to represent them unless they have other large clients in the same immediate locale. However, by carefully choosing a waste hauler, savings can still be realized on an independent level.
Throughout the country, some municipalities franchise out service areas on a contractual basis to waste hauling companies and often limit the choice of recycling centers as well. A business in a franchised service area has no individual choice of hauler, but by working with the franchisee’s representative may be able to negotiate better-than-average rates.
If a company is not in a franchised area, the fm can approach recycling/ waste management services like any other business need—market research, bid solicitation through RFPs, and other standard practices.
It is important to bear in mind, however, that haulers do not get involved with how a company produces recyclables or how those materials are handled on site. They exist only to cart away the recyclable materials and other refuse once it has been placed in a dumpster or compactor.
All of the aspects of working with the hauler—service visits, quantities of each recyclable generated, current commodities prices, separate tracking of landfill refuse, equipment maintenance and repair—will need to be monitored by the fm, whose in-house accounting department will be responsible for invoice oversight and payment.
This monitoring is critical, since most haulers bill in advance of providing service and many have switched to third party billing providers. Invoices may not reflect actual services, as the billing company may not be able to reference actual driver records and may know of any changes in service.
Credits to most invoices must be obtained promptly, but will not appear for a calendar quarter or more in most instances. To ensure that services billed are actually those received, fms choosing an individual hauler will need to keep accurate records of performance and compare them carefully against invoices, deal with the billing companies, and follow up with any credit issues.
Qualified environmental consultants will begin by assessing the materials stream on site. That investigation enables them to customize programs and practices for an individual company’s particular recycling needs.
Their assessment will include up-to-the-moment commodities pricing and may even propose alternatives to the recycling center. Many in the food and beverage industry, for example, no longer send organic waste to landfills. Environmental consultants found that such waste is a valuable addition to the diet of swine and other livestock. Today, by-products of the food manufacturing and brewing industries are sold to farmers and ranchers across the country.
This practice of creating a new use for what was formerly trash (whether a recyclable or not) is referred to as waste diversion. Fms experience it as a steady stream of income produced from what was formerly garbage.
The best environmental consultants provide on-site training programs to change how a company’s employees handle recyclables, which can radically affect the cost of recycling. They will engage in competitive bidding with haulers, formerly only available to multiple location businesses. Most importantly, they provide a single point of contact that frees corporate staff from administrative and accounting functions.
As is true for any other industry, fee schedules and billing practices vary for environmental consultants. It is possible to buy one individual service—a waste stream audit, for example—from a consultant at a specific fee, or an entire program combining the many aspects of recycling and refuse.
What Lies Ahead?
The market prices for recyclables (normally calculated per gross ton) dropped for all major categories throughout calendar year 2001. As almost every state has asked both the public and private sectors to increase source reduction, recycling, and composting, there are no immediate price improvements in sight, according to industry analysts.
The National Recycling Coalition (NRC) held its annual conference at the beginning of this year. Highlights from this report on the state of the industry and an environmental benefits calculator are available at www.nrc-recycle.org. The calculator is based on models developed by the U.S. Environmental Protection Agency (EPA) and the Northeast Recycling Council, and it provides detailed information on energy savings, reduction in greenhouse gas emissions, reduction in emissions of air and water pollutants, and conservation of natural resources.
What lies ahead? The EPA is holding public hearings on a recent “draft white paper” prepared by the agency’s Resource Conservation and Recovery Act (RCRA) Vision Work Group, Beyond RCRA: Prospects for Waste Materials Management in the Year 2020.
In a nutshell, the report urges the EPA to rewrite the Act to adopt the goal of zero waste by 2020. Clearly, fms have their work cut out for them and will need to find creative solutions for meeting the recycling challenges to come.
Buono is the founder of Wall, NJ-based Environmental Service Management Group, Inc. (ESMG).
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