|
Home
> Articles
By Issue > Energy
& Environment > Article April 2002
Recyling 2002:
A Primer For Fms
By
Michael Buono
 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.
Environmental Consultants
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.
—Michael Buono
Buono is the founder of Wall, NJ-based Environmental
Service Management Group, Inc. (ESMG). For more information
on recycling and waste alternatives, visit www.esmg.com.
|
