Contained Growth

While secondary commodity markets have experienced slow but steady growth over the past several months, throughout much of 2009, recyclers of many materials struggled to make ends meet as lay-offs, facility closures and consolidation across the recycling industry were common. Fortunately, it appears that the economic forecast heading into the new decade is cautiously optimistic.

Whether recyclers are trying to strengthen their businesses or simply trying to survive to see brighter days, adding or refining the efficiency of a container service can be an effective way to attract new customers and maximize the amount of material coming into their facilities.

“As an independent recycler, if you have the capability to put in a container service with compactor containers, roll-off containers and open-top containers, you get an advantage over another company that won’t go and make that expenditure,” says Blair Brown, vice president of operations at All-American Recycling,  based in Columbus, Ga.
For recyclers seeking to gain that competitive advantage, becoming familiar with the most efficient operating and maintenance practices associated with running an industrial container service can help recyclers maximize revenue from their existing operations, or can serve as a good first step toward helping recyclers determine whether adding such a service makes sense for their businesses.

CONTAINING CUSTOMERS
When operating an industrial container service, recyclers advise giving careful consideration to the size and type of container that is placed at a customer’s manufacturing plant or facility. Calculating the appropriate size and type of container is dependent on several factors.

“Recyclers should consider the material to be put in the container–length, weight and volume,” says Scott Melton, president of ACI Plastics, based in Flint, Mich. “They should also take into account the space available in a customer’s plant, the weight of the container versus the weight of the material in the container and the truck that will be used to pick up the scrap.”

While the appropriate size of container is certainly dependent on the material handled and the customer’s site layout, often just as important to the recycler’s bottom line is the customer’s service schedule, or how often a full container will be rotated with an empty one.

“Obviously the larger the container we can put into any customer’s facility, the less frequently it will have to be serviced, which means the more efficiently it will be able to be serviced because you’ll be able to haul more weight at one time,” says Chris Ockenfels, northern division manager for City Carton Recycling, a paper and plastics recycler based in Iowa City, Iowa.

Managers of container businesses agree that they prefer to conduct regular, scheduled container service because it allows them to operate more efficiently.

“Some customers generate X amount of material per day, every day and it is very consistent,” says Ockenfels, citing commercial printers as an example. “Those are very easy to put on a schedule. Other customers will be busy one week and then dead the next two weeks, so it is a bit more challenging.”

Many recycling service providers indicate that they also serve customers with specialized container needs in addition to routinely scheduled clients. Although unscheduled container service may not be the most efficient or cost-effective method of managing container inventory and vehicles, the ability to customize service brings value to the customer, according to Jonathan Abrams, executive manager of operations for Medford, N.Y.-based Gershow Recycling.

“There are times that a customer may have a certain, specific need that has to be met at that time,” Abrams says. “As a business, we’ll go out and make sure that we take care of that.”

Brown offers this example. “I am clearing out a warehouse in Auburn (Ala.) and I went and inspected it. They said they needed five 40-yard open-top containers there, and that’s what we did. Those will constantly be swapped until we get everything out of there. That’s kind of a specialized part of our business.”

Given the sporadic frequency of specialized jobs such as Brown’s warehouse cleanout, container providers can sometimes become overwhelmed with the amount of service they are scheduled to perform. In such instances, Maryann Gonzalez, director of operations for Los Angeles-based metal recycler Alpert & Alpert, suggests using automation to achieve maximum efficiency.

“It’s a very inexact science. It’s almost like feast or famine, more so in the last year because the market has been so fluid,” says Gonzalez. “When it’s more of a steady, constant market, it is easier to predict when containers will be full. You want to take more of the guesswork out of it and make it more automated. You cannot respond to all of your customers on the same day and, as a result, we try to anticipate. But you also want to go with a full truck. You don’t want to go pick up a box that is half empty.”

MAINTAINING CONTAINERS
Because of the irregular ebbs and flows in demand for service, recyclers must ensure that they always have enough containers in inventory to meet the needs of their customers.

“We do keep a minimum inventory and we do order when that inventory gets below the number that we are comfortable having,” says Ockenfels.

Brown adds that it is more likely that All-American Recycling will suffer from a shortage of drivers than a shortage of containers because of a spike in demand for container service. “We have the containers, but it’s a matter of getting them there,” he says. “In addition to our scheduled service, right now we have a job that is 45 miles away, and I’ve got a driver out this week, so we are trying to figure out how we are going to get it all done. But we’ll figure it out and make sure service gets done because it is important to our customers.”

An additional factor to consider when managing a container business is whether to have specific containers for specific customers or whether to rotate the available inventory among customers as needed. Container providers agree that the normal practice is to rotate containers among all customers, picking up containers full of material and replacing them with empty ones of the same size and type. However in certain instances, whether because of specialized needs or a customer request, certain containers may be designated for specific clients.

“I’d say it is about an 80 percent/20 percent split, where 80 percent of our containers can be used anywhere and 20 percent are very specific to a customer, because of, for example a contaminating fluid that requires containment,” says Gonzalez.

Ockenfels adds that at times clients will request specific containers of a specific color or with their logo displayed for aesthetic reasons. “If a customer wants a specific size and style of a container for aesthetics, we’ll usually accommodate them as long as we can adjust pricing to make it worth our while,” says Ockenfels.

Gonzalez adds that for customers requiring specific containers, Alpert & Alpert typically has more than one container of that specific type and simply picks up the full container, replacing it with an empty container of the same specialized type. “Everything is so space-constrained so we typically minimize any and all handling or sorting on site,” she says. “You just get in, pull the full container out, replace it with a similar specialized container and leave.”
Working with a constantly rotating inventory, companies may struggle to find time to perform maintenance on their containers. “A big challenge for us is just finding the time to rotate equipment in to do spot-welding, painting and beautification,” says Gonzalez.

However, recyclers must consider several maintenance issues to prevent downtime and to keep their customers happy.

“First and foremost your containers have to be clean and respectable-looking. They basically need to look new at all times,” says Abrams. “Another important thing with containers is to fix any holes that may form, possibly on a demolition site or in the field. [Maintenance] is something that requires an extensive amount of work.”  

Many container providers say that the average lifespan of an industrial metal container for collecting recyclables ranges from five to 10 years depending on the application. However with routine maintenance and adequate care, Abrams estimates the life span of a container may extend further, allowing recyclers to maintain their inventories and to continue providing quality equipment and service to their clients.

“Stay on top of your equipment; that’s the most important thing,” Abrams says. “How’s the saying go? An ounce of prevention is worth a pound of cure.”