The National Solid Wastes Management Association (NSWMA) is a 47-year-old trade association representing collectors and haulers of waste and recyclables.
The group estimates that some 27,000 private companies and government agencies are involved in waste and recycling collection, with about 55 percent of these being government departments. NSWMA draws from the 45 percent in the private sector for much of its membership, though it has public sector members also.
The group says its members operate in all 50 states and consist of both large publicly traded companies and small and medium-sized private firms.
The NSWMA says its mission is "[to] promote the management of waste in a manner that is environmentally responsible, efficient, profitable and ethical, while benefiting the public and protecting employees." It offers educational and training programs, conducts research and advocates at the federal and state level to undertake this mission.
During and after the secondary commodities downturn of late 2008, NSWMA members have been among those trying to manage through a dramatic market shift. Many of the group’s members are collecting and processing recyclables under contract while markets for the materials have shriveled.
The NSWMA and its members are among those trying to ensure those involved in municipal recycling throughout the chain—government contracts, collecting, processing and consuming materials—work together to keep programs viable.
NSWMA’s President and CEO Bruce J. Parker is helping to guide the association and its members through the challenges. He was interviewed in December 2008 by Brian Taylor, editor in chief of Recycling Today, and provided some insight and his views (not officially those of the NSWMA or its individual members, he pointed out) as to how municipal recycling programs can move forward.
Recycling Today: What have you been hearing from your members regarding their recyclables inventory situations?
Bruce Parker: I have talked with both MRF (material recovery facility) operators and haulers who collect residential and commercial recyclables. Due to the collapse in the commodities markets, some members are storing recyclables, space permitting. However, storing recyclables is not without its problems. You need to store some recyclable materials inside because they cannot be exposed to the elements. If paper, OCC (old corrugated containers) and some plastics are stored outside, they have to be covered to prevent deterioration due to sunlight and rain.
As you are probably aware, companies are still moving recyclable materials, although some firms have had contracts cancelled by Chinese mills that are working through existing inventories.
One point I want to underscore is that in the daily news coverage of this global recycling downturn, I have not read
one story where commodities were landfilled, although this fate is sometimes mentioned.
The haulers and processors with whom I’ve talked have said this is not an option, and I think that’s so for several reasons.
First, some municipal contracts and regulations prohibit disposal of certain recyclable materials.
Second, in many communities, especially in the mid-Atlantic and Northeast regions where tip fees are high, the avoided cost in recycling rather than disposing of recyclables as trash is still less expensive, even with added transportation fees or surcharges.
Third, with increasing public knowledge about climate change concerns, recyclers understand that their reputations are at risk.
RT: How can MRF operators respond when inventory begins exceeding storage capacity?
BP: They can try to find storage facilities not located on their property, but this may be easier said than done.
For example, recently a member told me he was looking to store his recyclables in an empty military garage, but insurance and rental costs were very expensive.
Some processors are working with their shippers. The economic slowdown has resulted in tens of thousands of trucks being pulled off the road by long-haul truckers, which are sitting idling in yards. Some processors have approached their shippers and asked this question: Will you provide me free, empty trailers to store bales? When orders rebound, they can use that trucker to take the material to the mill.
Paper mills, which commonly provide trucking to pick up bales from suppliers, also are working with their truckers to use empty trailers for storage.
Hopefully, storage becomes less of a problem because the slowing economy means fewer recyclables are being generated, and as I mentioned earlier, materials are still moving, although not as much or as quickly.
RT: Do you believe municipal recycling programs had begun to rely on a commodities payback?
BP: Some, if not many, municipal recycling programs have relied in varying degrees on revenue from the sale of recyclables to cover at least part of their program costs, and in some cases to provide other waste management services.
Until mid-to-late October 2008, when the value of virtually all commodities crashed like an elevator whose cables snapped, local government recycling programs had been enjoying the benefits of high commodity prices over a four-to-five-year span.
But the current situation is putting a big strain on municipal budgets throughout the country, and how a municipality, town or solid waste authority handles it varies. For example, some municipalities have fixed floor price agreements with their recycling contractors, meaning that if the recycling revenue falls below a specific amount, the municipality may not make as much money as if recycling prices were higher, but it won’t lose money either.
In other arrangements, the municipality pays the hauler a collection and processing fee and then has a revenue sharing provision based on a local or national market index.
RT: Have haulers, MRF operators and recycling coordinators begun to communicate about the sudden drop in demand for secondary commodities?
BP: In several states, collectors, processors and public agencies have been meeting and exploring options.
In California, for instance, the Sustainability Committee of the California Integrated Waste Management Board (CIWMB) is holding monthly meetings on market development. I suspect that is occurring on a less formal basis throughout the country.
RT
: What are some of the potential scenarios you foresee if demand for secondary commodities remains sluggish?BP: If the demand for recyclables remains sluggish, which I interpret as "as is," I’m sure we will see more of the same adaptive actions that are happening now, such as solid waste districts charging haulers and residents to drop off recyclables that previously were paid for; recyclers and municipal programs laying off employees and reducing work schedules to cut costs; the imposition of collection surcharges as was done when the price of oil skyrocketed; and seeking contract adjustments.
These are the same options being employed by other businesses—recycling is no different. Perhaps we will see the re-emergence of state recycling market development programs.
On a less positive note, the Wall Street Journal recently reported that Smurfit-Stone Container Corp. might file for bankruptcy due to declining sales and cash problems if they fail to get financing to continue operating until they restructure debt. We could see similar scenarios.
RT: What does the NSWMA recommend in terms of near-future dialog or action?
BP: We are actively working with other trade associations representing recyclers and end users to try to develop federal legislation that will stimulate demand for recyclables, such as recycled-content requirements, tax credits and building domestic recycling infrastructure to reduce our dependence on China and India.
The most important dialog is to keep on reminding ourselves that as challenging and scary as this current market is, it will get better—it always does.
Now is not the time for municipal recycling programs to shut down, because they are extremely hard to restart.
Recycling is the right thing to do: It saves energy, reduces greenhouse gas emissions, conserves our natural resources and saves landfill space.
Explore the February 2009 Issue
Check out more from this issue and find your next story to read.
Latest from Recycling Today
- Alumetal of Poland issues EPD
- Bolder Industries receives grant for European project
- Regenx says US facility back online
- Cliffs has money-losing Q3
- BIR Autumn 2024: Supply challenges poised to grow
- Befesa reports double-digit adjusted EBITDA growth in Q3
- Companies partner to standardize build of chemical recycling plants
- Solarcycle to add recycling plant to Georgia campus