Times are changing in the scrap industry. Gone are the days when a peddler could sell a truckload of catalytic converters for cash without question. Today, that same peddler must present a form of ID, such as a driver’s license, and possibly even submit to a fingerprint scan before receiving payment in many states.
As scrap prices reach record highs, some state and local governments are doing everything they can to stop the rise in material theft. This includes requiring scrap yards to comply with certain regulations. But the variety of data these laws require scrap yards to capture is making it difficult for recyclers to keep up.
By purchasing industry-specific software, recyclers can save time, reduce costs and meet their obligations under local and state laws. For most recyclers, learning software can be just as time-consuming as understanding government regulations. Fortunately, software providers can help.
FOLLOWING THE RULES
Many recyclers still record data concerning scale-house transactions by hand. And law enforcement agencies have added long lists of reporting requirements in some states geared toward reducing material theft.
"For example, in Dallas, recyclers are not allowed to pay cash for scrap unless [the seller] is an approved cash customer or vendor," says Dave Kane, co-founder, 21st Century Programming, Long Beach, Calif. He adds that reporting requirements vary by state or locality. "Texas recyclers have to report to the state, while recyclers in Mississippi report to LeadsOnline, and Arizona recyclers report to the Rocky Mountain Information Network."
Law enforcement agencies can require recyclers to keep detailed reports of each transaction, including the seller’s name and address, the date of the transaction and a description of the material being purchased. Recently, these agencies also have been requesting scans of the seller’s driver’s license and fingerprints as well as photos of the incoming material.
With the regulatory pressure mounting, more recyclers are turning to software to improve their current recording process. "With software, recyclers are able to keep up with regulations and speed up their recording process at the same time, says Scott Brenner, CEO of Recy America, Scottsdale, Ariz. "Our customers also get a solution that complies with all the rules and doesn’t negatively impact customer satisfaction," he adds.
"We are saving customers tons of time and are making their lives easier when it comes to the police," says George Kane, co-founder of 21st Century Programming. "Now, if the police ask for information, recyclers can print out that particular transaction," he adds.
For recyclers who are not facing local regulations, such as Scott Gezymalla, CFO, Lincoln Metal Processing, Erie, Pa., purchasing software is a proactive step. "Software helps us better identify both customers and their material for law enforcement officers," Gezymalla says. "It also gives us a much better record of what we actually purchase." Software also prepares Lincoln Metal Processing for what could be coming down the road.
NEW BILL CRACKS DOWN ON COPPER THEFT U.S. Congressman Bart Stupak (D-Mich.) has introduced legislation in the U.S. House of Representatives that would make it easier for law enforcement officials to investigate copper theft cases. The bill, House Resolution 6831, the Copper Theft Prevention Act, would require scrap metal dealers to document copper transactions and would prohibit cash transactions of more than $500. Stupak and U.S. Congressman Jim Ramstad (R-Minn.), co-chairmen of the Congressional Law Enforcement Caucus, introduced the legislation with the support of the Coalition Against Copper Theft. "The Copper Theft Prevention Act will help protect consumers, businesses and our nation’s critical infrastructure," Stupak says. Since 2006, metal theft has been on the rise largely because of the surge in global demand for scrap metal. The price of copper has more than quadrupled from about 83 cents per pound in 2000 to more than $4 per pound in 2008. Tight supplies have led to an increase in copper recycling, which has created a market for used copper and has made copper an attractive target for theft. Law enforcement agencies around the country have seen copper stolen from utility substation transformers, utility poles, railroad signaling wire and foreclosed homes. Under Stupak’s proposed legislation, scrap dealers would face civil penalties of up to $10,000 for failing to document transactions or engaging in cash transactions of more than $500. Scrap dealers would be required to keep records of copper transactions, including the name and address of the seller, the date of the transaction, the quantity and a description of the copper being purchased, an identifying number from a driver’s license or other government-issued identification and, where possible, the make, model and tag number of the vehicle used to deliver the copper to the scrap dealer. Scrap metal dealers would be required to maintain these records for a minimum of two years from the date of the transaction and make them available to law enforcement agencies for use in tracking down and prosecuting copper theft crimes.
Brenner says 50 percent of his current customer base has purchased additional hardware that integrates with the Recy America application in preparation of regulations to come.
THEFT PROTECTION
Software providers and their customers are forever modifying and fine-tuning their systems to stay ahead of state and local regulations.
In most cases, enforcement agencies only recently began requiring recyclers to record transaction data, such as customer name, type of material, price and amount paid. "Today, these agencies are calling for more detailed information about each customer and the products purchased from that customer," Brenner says.
For Recy America, this meant updating its software to include high-speed fingerprint, signature and driver’s license scanners and cameras integrated with scales and ATMs. And to make retrieval and reporting easier for its clients, Recy America’s systems can also upload or e-mail reports to agencies when necessary.
Features of 21st Century Programming’s software also include driver’s license and fingerprint scanners as well as a camera system that takes unlimited pictures per transaction, including gross weights, tare weights, license plates and pictures of who got paid at the ATM or by check. "The software also features an electronic reporting system that sends purchasing information to the various reporting agencies," Dave Kane says.
Maryland-based Paradigm Software also provides its solid waste and recycling customers with an easier way to report information. "If a state is requiring a certain customization, we can modify the program to assist them in capturing that specific data," says Jackie Barlow, vice president of Paradigm Software.
For example, one of Paradigm’s customers can only accept so much of a certain material on a specific day. "The software tracks how much of that material has come into the facility throughout the day," Barlow says. "The customers can also request alerts to be sent to them via e-mail or text message."
Lincoln Metal Processing has recently added driver’s license scanner and material surveillance features from The Shared Logic Group Inc., Holland, Ohio, to its system. The scanner provides the company with detailed information, including customer name, address and driver’s license image. "And the surveillance system effectively takes pictures of material at the same time the gross weight is entered into the system," says Gezymalla.
Customer training is a vital part of the installation process. “The recycling industry is a service-orientated business, so we have to make sure we offer the best in terms of service,” Dave says. Software providers offer a number of training options, including classroom training and pre-training classes. Many providers also have a help desk department available to answer customers’ questions. 21st Century’s software also comes with a remote control feature. “If a problem occurs, a technician can log into the system and walk the customer through the problem,” Dave says. “Around 90 percent of our customer phone calls are handled in this manner.” When Lincoln Metal Processing purchased its software system, Gezymalla says he was most concerned about the training process. Lincoln Metal Processing decided to train the staff internally, and Gezymalla says he was surprised at how quickly the company’s employees adapted to the new features. “It was less challenging than I initially thought,” Gezymalla says. Software providers do not see recyclers’ interest in software dwindling in the future, as more government agencies create and enforce new regulations. “Unfortunately and fortunately we are only at the tip of the iceberg when it comes to regulations imposed on the recycler for theft,” Brenner says.
PRICE TO PAY
Navigating The Learning Curve
"The price recyclers can expect to pay for a software system and its features really depends on the company’s size and type of business," says Dave Kane, as well as whether the recycler currently has a computer system. The starting price for a software system from 21st Century Programming can range from $25,000 to $30,000.
Brenner says it’s important for recyclers to consider the cost of peripherals, too. "For example, a single driver’s license and fingerprint scanner, along with an IP camera, can cost in the neighborhood of $2,500," he says. "This would be on top of the price of our software, which takes the information from the devices and marries it to transaction detail."
Dave Kane advises recyclers not to choose a system based on price alone. "Recyclers that go with the least expensive software are not going to get the support and flexibility they’ll need if regulations change."
The installation time frame varies depending on the recycler’s size and the project’s scope, with two to three months being common, George Kane says.
Software providers do not see recyclers’ interest in software dwindling in the future, as more government agencies create and enforce new regulations.
"Unfortunately and fortunately we are only at the tip of the iceberg when it comes to regulations imposed on the recycler for theft," Brenner says.
The author is assistant editor of Recycling Today and can be contacted at kmorris@gie.net.
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