Scrap Expo 2024: Meeting evolving customer expectations

During the session New Frontiers to Drive Growth during Scrap Expo 2024, panelists discussed evolving customer expectations and how their traditional metal recycling businesses have evolved in response.

“Customers still care about a lot of the same things, but the ante has really been upped,” said Anna Tompkins, nonferrous commercial director, Mid Atlantic, at Sims Metal. Tompkins is based out of Maryland for Jersey City, New Jersey-based Sims Metal, a division of Sims Ltd. of Australia. She said customers care about environmental and social justice as well as metal recyclers’ own sustainable practices.

It’s not enough for metals recyclers to refer to themselves as “the OG [of] sustainability,” she continued, adding that companies need to exceed regulations, not just meet them.

Additionally, Tompkins said, Sims Metal customers want technology that makes their lives easier from the beginning to the end of the scrap buying process, whether that’s a mobile app through which they can make dispatch requests and see where their truck is in real-time to portals where they can see their shipments, how Sims graded their incoming materials, any deductions that were made and payment information.

“Another thing that I’m seeing, specifically with industrial accounts, is this concept that I’m going to call ‘circular supply chain.’ I know we hear a lot with those three words together and used in a lot of different ways. But it’s this concept that upstream stakeholders, like mills, ultimately want to see their scrap, their metal, come back to them through the recycling stream. So, what they are doing is incentivizing their customers, who are our suppliers, to make sure that happens.”

That could lead to uncomfortable questions to scrap processors about where they sell their metals, Tompkins said. “We have to be open to those conversations.”

Kari Bliss, principal, Sustainability, at Michigan-based Padnos said, “Transparency is the first step to building trust with a customer.”

She added that “sustainability” has different meanings to different customers. Even with terms as specific as Scope 1 and Scope 2 emissions Bliss said, people’s understanding of these terms can vary considerably.

“I think it’s important that we engage and truly try to understand the information that they are trying to capture and we think about the result they are trying to get,” she said. “You’re helping them be able to tell their own story and feed it back to their customers. Ultimately, the result that they want is to be able to sell more of whatever their product is. And the more you are able to help them do that … the more you are going to build that stickiness and continue to have that lasting relationship."

When it comes to delivering data for customers to use in their sustainability reports, Tim Ridderbos, general manager of Circular by Shapiro at St. Louis-based Shapiro Metals, said his company has found success by helping clients understand the data they have initially.

“We had a customer headquartered in St. Louis with plants across the United States, Mexico and Canada. At the corporate level, we were asking them, ‘Give us your data first. Let us understand your scrap amounts and what else you’re recycling.’ And the process to get that data took about 12 months. And it was very poor. … It was really discombobulated,” he said.

The company brought on that account because it could give that manufacturer the ability to see its data in a single portal and help train its employees to properly handle scrap materials and create documentation to train new employees.    

“Once you get that data, you can help them tell the story,” Ridderbos added.

He told the story of a customer in Georgia that approached Shapiro because it was having issues with its trash company as it worked to go zero-landfill. Shapiro's initial reaction was, “That’s not our game. We’re a metal company," he said. "For a long time, we had blinders on if someone said ‘plastic’ or ‘trash.’”

However, Shapiro worked with a partner to deploy two compactors and a baler at the manufacturer, reducing its total annual trash pickups from 500 to about 50, Ridderbos said, with the program saving roughly $150,000 annually and earning Shapiro preferred supplier status.  

Moderator Stuart Kagan, co-founder of Buddy, a marketplace that connects scrap metal buyers directly with sellers, said, “You need to look at [sustainability] in a way that it is going to add value for your customers. … If they can see you as somebody who is trying to add value as a service provider, you’ll have a long fruitful relationship.”

Bliss said in reporting data to customers, recyclers should include the tonnages of the materials recycled for them as well as the waste, adding that it’s OK to push back a little and educate them about recycling when they deliver unrecyclable material. “If we don’t spread that information … then we’re allowing them to greenwash.”

The old mindset of avoiding customer education no longer applies, Tompkins said. “If you don’t, someone else will. It’s a huge way to win business. Couple education with providing solutions.”

Bliss advised recyclers to reward customers for the good material they supply by noting the associated environmental benefits, adding that associations like the Recycling Materials Association (ReMA) have data to help with that.

“Our biggest expense is freight,” Ridderbos said. Therefore, Shapiro reports average payloads to its customers to encourage more efficient transportation and greenhouse gas reductions. As a result of that reporting, he said, “If we get a 10 percent bump in our average payload from our customers … that’s a huge win for us.”

“Reporting doesn’t have to be cute,” Tompkins said, “but you do need to have quality data.”

The panelists agreed that while partnerships could be required to provide all the recycling services or to cover the geographic scope of a customer’s operations, it's best to be the company managing that client relationship and delivering the data.

Ridderbos said that while customers want all their reporting from one place, that doesn’t mean a single company needs to do it all. “If you are controlling the data, it's harder to commoditize your business.”

He added that Shapiro is upfront with customers about its use of partnerships. “We are not hiding any balls. … I have no problem with any of my partners being in front of my customers.”

Tompkins said manufacturers are “definitely looking for a one-stop shop,” adding that the other companies a recycler partners with to service accounts are key. “If you feel that nimbleness is not a strength for you, partnering with someone who is can be a great strength for you.”

Scrap Expo 2024, hosted by Recycling Today Events, was Sept. 17-18 in Louisville, Kentucky, at the Kentucky Exposition Center. The conference will return to the same venue in 2025 from Sept. 16-17.