Waste Web

Michael Fickes

The trash mice are here. At WasteExpo 2000, a host of online businesses announced their presence in the solid waste industry offering waste haulers, disposers, recyclers and waste generators a variety of business-to-business (B2B) services. B2B is an e-business term for on-line companies that serve businesses - not consumers - in one way or another.

For example, a hauler can log onto a number of online B2B services and search for commercial customers, municipal contracts, used and new equipment, and even headlines of key developments in the waste industry. Waste generators can log onto the same sites and post their needs, simply or in a formal request for proposals (RFP). And recyclers and landfill operators can search services with areas devoted to equipment such as compactors.

While the services these new dot-com companies vary, many are developing software that solid waste organizations can use to improve management techniques. One company, for instance, plans to offer route optimization tools that can be used online. That means instead of buying and using expensive software, you simply subscribe to a service and use the software application that is up, running and waiting for you.

Of course, to get information, you have to give information. Recognizing users will want to ensure the confidentiality of their reporting, B2B providers are spending significant amounts of time to guarantee customer security. However, that doesn't mean all online B2B services are foolproof. You should investigate all claims carefully, researching security issues beyond what any particular provider tells you.

Despite the benefits online B2B services can provide, taking advantage of the services will require that you spend time clicking around from site to site so that you understand how each applies to your operations. You will have to force yourself to think in new and different ways about what you do and how these online services might contribute. You also will have to be patient - many sites have yet to implement all of their ideas, so they may have glitches.

But ultimately, if you watch for progress, you will discover opportunities. The new online companies are designed to increase your revenues with new sources of business, as well as to help reduce operating costs with more efficient supply and management techniques.

Here's a look at what 10 companies have to offer in the solid waste management B2B online arena.

Analine.com Boston www.analine.com Analine.com operates a reverse auction for haulers and waste generators, and provides a number of application service provider (ASP) [See "Defining Web Words" on page SS11] tools to help its users conduct business.

John McQuillan, president and CEO of Analine.com, describes the company as a commerce tool for the waste industry, the hazardous waste industry, the consulting engineering industry and environmental industries as a whole.

"According to the U.S. Department of Commerce, the environmental industry is a $200 billion market splintered into a number of spaces," McQuillan says. "The largest of these operate in the solid waste industry. We've built out products for the solid waste industry and a number of other categories.

"Our primary focus right now is on the very large purchasers of environmental products, services and technologies," he continues. "Our exchange is just the first of a number of planned applications or Internet-based tools that will help make a buyer's life easier. In short, this is an operating system that includes all the time and money saving applications that a buyer and a seller will ever need. It includes tools for enterprise resource planning (ERP) and customer relationship management (CRM) all together in one area."

The Analine.com exchange model offers a reverse auction service that, according to McQuillan, takes advantage of the Internet's ability to "put power into the hands of buyers and enables them to apply the strengths of free market economics to individual transactions."

In a reverse auction, a buyer posts a RFP, and sellers post bids designed to meet the RFP's requirements. Unlike a regular auction, bidders are suppliers, not buyers. In contrast to a regular auction, prices ordinarily fall during bidding instead of rising. At the end, lower bids are more likely to come out on top.

Analine.com's auction area offers two kinds of reverse auctions for buyers, who can choose the one most suited to their needs. First, buyers can request value bids in which price represents only one selection criteria. The buyer sees all of the bids posted in response to the RFP, as well as basic company information included by the seller in the proposal. Second, buyers can request a low-bid auction in which price is the only consideration. Buyers will see only the lowest bid and have no opportunity to select a higher bid.

Bidders can view the amounts bid by other sellers and may lower, but not raise, their bids until the auction closes. Sellers submitting bids must accept an agreement that underscores the legal impact of the offer. Buyers selecting a response to their RFPs enter into a binding agreement to pay the bid amount.

Analine.com generates revenues by charging fees to bidders on contracts worth more than $1,000. Additionally, Analine.com charges one-half of one percent (0.05 percent) of the total amount of the winning bid. Charges are billed to credit cards.

EWaste Atlanta www.ewaste.com Due on-line this summer, eWaste plans a three-phase introduction of its services to the waste management industry, according to company president Vince Bankoski.

Phase I will introduce a portal concept aimed at creating a community of users. "We're currently working with content partners to provide news and information important to waste management professionals," Bankoski says. "Our partners in this effort include magazine publishers, research services, government agencies and people with information resources in the real world."

Plans call for the portal to generate revenues through sales of banner advertising and marked-up fees charged by information providers.

"The goal of the portal is to build our brand name," Bankoski says.

Then, Phase II will launch in the fall of 2000. This phase will introduce an auction model designed to facilitate transactions between waste generators and service-providers. Fees have not been established, but Bankoski notes that auction services generally charge fees ranging from 1 percent to 10 percent of the transaction's value.

Bankoski holds high expectations for the auction software eWaste is creating. "It's a killer application," he says. "It's a dynamic auction instead of a static one. The price moves in an automated fashion, and the buyer and seller are empowered to close at any time. In other words, you no longer have to be the low bidder. In a conventional auction, you submit your bid and cross your fingers. In a dynamic auction, the prices change in front of your eyes, and when two parties are satisfied, they close. This is a new idea."

Bankoski expects the model to attract copycats but is banking on the brand-building efforts of Phase I to position eWaste as the identifiable service.

Phase III, scheduled to arrive on the eWaste site early in 2001, will provide what Bankoski calls back-end integration. "In this area of our service, partners called application service-providers will supply tools to help our users manage their businesses online," he says. "What this means is that you may not have to hire an Internet guru. You can come here for the tools you will need to manage relationships with customers and suppliers. You won't have to buy 50 software packages, integrate them into your business and train your employees. You simply subscribe to a service that understands your business. You can customize these tools to fit your look and needs. This makes everything more affordable and easier," he claims.

Fibermarket.com Atlanta www.fibermarket.com Fibermarket.com has created a market-maker exchange on the Internet to facilitate business relationships between buyers, sellers, brokers, dealers and intermediaries interested in fiber products.

"We think of our model as a fiber management marketplace," says Jeff Abbott, vice president, corporate strategy for the company. "In essence, we provide the digital tools to simplify the buying and selling of recycled fiber materials for paper mills, forest product companies, recovered fiber producers and aggregators."

Sellers include large national and small local recycling collectors, and plant operators. Buyers range from fully integrated paper companies to small independent mills.

Interested businesses may log onto the site at no charge. Users, however, must complete a profile that qualifies them as a buyer, seller or intermediary. Based on the profile, the site provides different functionalities, with screens and tools tailored to business needs.

Fibermarket.com generates revenues from fees related to transactions between buyers and sellers, as well as through value-added services, which are being added to the site and will carry what Abbott describes as a nominal fee based on the value it contributes to the transaction. For example, value-added services include transportation of the purchased materials.

Another value-added service covers transaction financing. The company plans to offer a settlement feature that will enable qualified buyers and sellers to transfer funds electronically.

More advanced services planned for the site include developing an Oracle Corp. global exchange platform. "This is an important development for us," Abbott says. "It will let us leverage Oracle's supply chain collaboration technology to enable a buyer or seller to connect their suppliers and vendors to the marketplace. For example, if I were managing a paper company and wanted to line up my manufacturing runs for the next month, I would have to evaluate the raw material inventory on one side, while simultaneously looking downstream at demand from my sales channels. With this information, I could project my production runs.

"In a traditional environment this would involve a lot of manual work. But in a collaborative online supply-chain environment with suppliers, vendors, channel partners and customers all connected, it becomes more efficient," he says.

Fibermarket.com went on-line in October 1999 financed by venture capital from investors such as Neocarta, Charthouse Group and J.P. Morgan. The company recently engaged Oracle Corp. as a technology partner and significant investor.

PaperExchange.com Boston/London www.paperexchange.com PaperExchange.com offers solid waste haulers and recyclers an online market, or exchange, for a variety of recycled paper products. The company deals with all product segments of the paper industry: container board and packaging, newsprint, printing and writing paper, publishing, pulp, towel and tissue, and recovered paper.

Sellers as well as buyers may log onto the site free of charge. Sellers may post their paper offerings, and buyers may search the site by product, grade or another specific feature that they're looking for. PaperExchange provides the conduit for buyers and sellers to negotiate their own deals, and PaperExchange takes a 3 percent commission on the total national value of completed sales. The seller pays the commission.

A recent upgrade to the site offers a service called Target RFQ or Request For Quote. With this new function, buyers can submit an RFQ to the service, which then will distribute it to preferred suppliers. Sellers may choose to bid on the entire RFQ or on separate items.

Additional services include credit approval, payment processing, and logistics for both buyers and sellers.

"We provide solid waste sellers the ability to play on a bigger field," says Kevin Preblud, executive director, recovered paper for PaperExchange. "We qualify buyers with a line of credit and we clear the transactions. That means the seller sells to PaperExchange and need not conduct a credit check."

How does the product move from seller to buyer? "Logistics is another component of what we offer," Preblud adds. "Suppose a seller offers product Freight On Board (FOB) delivered. In that case, the seller pays the freight charges. A seller might offer FOB origin, which means the buyer must pick it up at the sellers door and handle the shipping."

In either case, PaperExchange will arrange for shipping if the buyer or seller requests it.

As an incentive for buyers and sellers to visit the site, PaperExchange also offer content including job listings, schedules of industry events, news headlines and a resource directory.

A number of the company's key executives have several years of experience in the paper industry. For example, President and CEO Kent Dolby comes from Andersen Consulting, where he served as global managing partner of the company's global natural resources practice, which included forest products.

PaperExchange went online two years ago in 1998. Investors include The Kraft Group, Internet Capital Group, Madison Dearborn Partners, MSD Capital L.P., Staples, International Paper, Asia Pulp & Paper, Terrapin Partners LLC, David Wetherell and Roger Stone.

The company recently filed its intention to make an initial public offering and go public.

RecycleNet Corp. Guelph, Ontario, Canada www.recycle.net Founded in 1995, much earlier than most emerging waste dot-coms, RecycleNet Corp. operates an information and trading exchange for buyers and sellers of all kinds of recycled materials. "We operate a free and open trading exchange," says John Robb, sales manager for RecycleNet. "We put buyers and sellers together, but we do not stand in the middle of the transaction. A selling company might post a listing to sell so many pounds of scrap plastic on our site. The offer might be for a one-time deal or an ongoing series of transactions. A buyer using our site will see the listing and contact the company. The two parties negotiate the transaction between themselves."

Because RecycleNet does not get involved in the transaction, the site differs significantly from auction, brokerage or other sites that act as intermediaries.

The company generates revenues by selling advertising, value-added services and tools designed to make the system work more efficiently.

Robb declines to describe the value-added services or software tools in detail, saying only that the chief value-added service is a lead referral system. Software tools enable users to enhance their offerings with photographs, he says.

The key to the site, according to Robb, is the idea of creating a marketplace on the web for recyclers.

"Where do recyclers go?" he asks. "A recycling center negotiates a transaction with a seller, but how does the seller know what the prices are? Prices for recycling materials bounce around because the system is transaction-based. As a free trading system, we provide an overview of the marketplace. That's the benefit we offer."

Robb also emphasizes the need for easy use. "I see a lot of new websites with cool technology," he says. "But our users may not be able to use those sites. In many instances, there is a gap between the business concept and the technology. To be successful, you have to close that gap, making sure that what you are doing is about the business and not the technology. Recyclers, after all, don't love technology. They want to move cardboard."

WasteBid.com Inc. Fairfax, Va. www.wastebid.com WasteBid.com comes to the Internet market as the brainchild of Gershman, Brickner and Bratton Inc., a Fairfax, Va.-based solid waste management firm. The business-to-business company aims to become an intermediary between buyers and sellers of solid waste services and new and used equipment. Site users include traditional waste hauling companies, recycling plants, disposal operations, equipment sellers and waste generators.

"Our site will stress recycling and will devote areas to recycled-content materials," says Robert Brickner, chief marketing officer for the company. "Most of us got into the business in the 1970s based on personal commitments to waste reduction and recycling. From that point of view, we want to give equal time to recycling."

When joining service-providers and waste generators together, Brickner emphasizes that his site does not function as a reverse auction or as a waste broker.

"Our site aims to mirror the way the industry works," he says. "Service-providers register with us to offer their services. Waste generators sign up by filling in forms describing their service requirements. Then, WasteBid.com solicits bids from the registered service- providers. Whoever makes the lowest responsive bid gets the contract."

Brickner notes that the general advantages of making deals online include speed for both buyer and seller, and the elimination of sales calls for the buyer.

WasteBid.com earns money on commissions when transactions are completed on the site. Who pays the fees depends on the transaction, according to Brickner.

While Gershman, Brickner and Bratton Inc. formed WasteBid.com, Brickner says that the relationship between the two companies formally remains at arms length.

wasteclick.com Orange, Calif. www.wasteclick.com Wasteclick.com is a vertical industry portal, or vortal, designed to provide information, products and services to the waste management industry.

The site, which began in spring 2000 as an extension of TransComp Systems Inc., offers waste industry news, research, discussions, newsletters, online tools, searchable job listings, career aids, a number of other informational sources and electronic commerce services.

Discussion forums and e-mail will allow members to ask for information and choose products and services from the site's electronic commerce offerings, according to the company.

Wasteclick.com also hosts a number of electronic commerce businesses. Sellers operating storefronts on the site offer products such as containers, vehicles, equipment, components and supplies.

Buyers or shoppers can compare specifications and prices, place orders, make payments or establish credit, and then arrange to have the product drop-shipped.

Additionally, the site conducts auctions and reverse auctions for used and surplus equipment, commodities and recyclables.

Membership and use of the information on the site is free. The company generates revenue by charging fees to create storefronts and Internet marketing strategies for waste industry businesses.

"We're a consultant," says Patrick Sweeney, the company's general manager. "We'll show companies how to use the tools at our site to implement an Internet strategy. If you manufacture compactors, for example, you may want to market that product on the net. You can pay to do this internally or you can contract with us to create a storefront on our site."

According to wasteclick.com literature, the company also plans to offer operations management solutions to waste management organizations. With this set of tools, companies reportedly can handle tasks such as accounting, route optimization and scale-house management online, without purchasing and maintaining those software systems in-house.

TransComp Systems Inc. is a software developer and provider of professional services specializing in financial and operations management applications for the waste and recycling industries.

wastedepot.com Columbus, Ohio www.wastedepot.com Wastedepot.com went online in April of this year as a business-to-business exchange. Founded by the Columbus, Ohio,-based The Ecology Group, wastedepot. com offers a reverse auction format focused on matching local haulers with local commercial waste generators.

Wastedepot.com buyers and sellers may be part of large national companies or small independent haulers or businesses. Nevertheless, the company has developed its electronic commerce model around the oft-repeated observation that the garbage business, like politics, is local.

"We're nuts and bolts guys," says Nick Nicholson, president and CEO. "We help the pizza joint with a dumpster and the grocery store with a roll-off find a company to haul their trash. Of course, the pizza restaurant might be part of a national chain, and the hauler might be a local division of a na-tional company."

Nicholson believes Wastedepot .com's results during its first quarter of operation point to the appeal of the company's business model.

"I would estimate that our service facilitated about 500 deals so far," he says. "Right now, we have about 53,000 locations that will go up for bid over the second half of 2000. These are buyers that have registered for our auction."

If Wastedepot.com continues to attract buyers at its current rate, Nicholson speculates that the company will eventually bid out 20,000 locations per month, worldwide.

To those who think that sounds wildly optimistic, Nicholson notes that it is only 10 percent of the worldwide market.

Wastedepot.com generates revenues by charging haulers a commission for contracts won in the bidding process. Haulers also pay a monthly fee of $39.95.

"After discussing our service with a small, local hauler, that company decided to postpone hiring a sales person," Nicholson says. "Using our service, they won $18,000 of business in 18 minutes online and decided that our commissions were cheaper than a salesperson."

Another intended benefit of the localized Waste depot.com strategy is that it aims to attract large waste generators with numerous locations.

"Suppose a very large client with many locations across the United States and Canada came to us," Nicholson says. "Our software offers a way to put up their bid locations in a batch, all at once. They transmit the data to us, and we put it up on the service. The same principle works for a small restaurant chain with five or six locations."

However, the chief benefit of the concept, as with all Internet services, appears to be speed.

"We're facilitating business transactions that might take a month to complete over the telephone and through the mail," Nicholson says. "With our service, it normally takes a week."

Looking forward, Wastedepot.com's top management plans to develop its site by adding an exhange for waste haulers offering both new and used equipment in the third quarter of this year.

Farther down the line, the company plans of other services from facilitating bill paying to cost management.

The Ecology Group is a management company. [See a related story on The Ecology Group, "Consolidations of Another Kind," beginning on page 54 in this issue.]

WoodFuel.com Houston www.woodfuel.com WoodFuel.com buys and sells wood fuel online. The company also forms alliances with equipment, transportation and financing companies to enhance its services to buyers and sellers.

"We are not an exchange that simply puts buyers and sellers in contact with each other," says Scott Mactier, a partner with WoodFuel .com. "We actually purchase the woodfuel material and resell that material to our customer base."

In time, Mactier expects "to be the largest gatherer of woodfuel material in the world." He adds: "Providing a centralized source of information also will be an important aspect that our site provides to the industry."

Currently, the company targets woodfuel suppliers such as grinding operators, mills, municipalities, wood waste generators, public utilities, power line trimmers, landscapers, pallet distributors and solid waste collectors.

"For example, we have a contract with Novus Wood Group in Houston, one of the largest gatherers of wood material in Texas," Mactier says. "The company gathers about 500,000 tons per year, and the contract commits a large portion of the product to us."

Buyers include energy and utility companies, paper mills and saw mills. Donohue Industries Inc., Sheldon, Texas, for example, operates a newsprint and market pulp plant that has contracted to purchase approximately 250 tons of woodfuel per day from Wood Fuel.com. Donohue uses the wood as an alternative to natural gas to fire its boilers.

Mactier believes that the Wood Fuel.com premise will work by consolidating sellers.

"Buyers are usually large companies with large bulk needs. Suppliers are many and fragmented," he says. "What makes our idea work is consolidating a source of supply for buyers. We also help to enhance the quality of the product. For example, we will meet with suppliers, analyze their operation and provide advice about how to enhance their procedures to raise the quality and value of their product."

The site also offers links to equipment manufacturers that may be important to suppliers.

As of mid-June, the WoodFuel. com website offered little in the way of information resources, but Mactier says he plans to begin centralizing a database of articles about the industry for future access.

Online since April 2000, Wood Fuel.com received its initial capital from eight private investors who have taken an active role in the business.

Wwwaste.com, Inc. Miami www.wwwaste.com Wwwaste.com Inc. came online in February of this year. Developed by several executives of the Miami, Fla.-based Star Service Group and Delta Recycling, a solid waste company and a recycling company, this website is betting that its take on the world of electronic commerce will ap-peal to other solid waste haulers and recyclers.

Despite these key relationships, Wwwaste.com stands on its own as a separate company not related to Star or Delta, according to Jack Casagrande, the company's founder and vice president of the recently introduced service.

In its first few months, the wwwaste.com site primarily served as a source of information about the waste industry. It provided news, feature articles, live stock market quotes for waste companies, a chat room and bulletin boards for job listings and equipment sales.

"Another area we're currently developing will post full listings of bid opportunities as they arise for municipal, state and federal contracts," Casagrande says of the website's progress. "Our goal is for a hauler to key in a service area, say two or three county names, and be able to review bidding opportunities and get all the information necessary to develop an RFP."

Plans also call for providing hauler listings that waste generators can search.

Casagrande describes the overall business concept as a directory or information site. Revenues will come in the form of advertising or user fees yet to be firmly established. For example, "a local hauler might pay $100 per year to be a member," Casagrande says.

"The membership fee entitles the hauler to full access to the site and an advertisement. But anyone can come to the site and purchase services. It will cost about $10 to post a contract listing and $10 to view a listing," he adds.

As of the time of publication, access to the site remained free for both buyers and sellers, because Wwwaste was focused on building an identity for the service.

ASP: An application service provider or ASP pools together a number of electronic tools to create an operational platform for interested users. Amercia Online, for example, is an ASP that provides a variety of tools, from Internet browsers to financial market tracking, for its members.

Auction: A transaction process in which sellers solicit bids from buyers, with a product or service going to the highest bidder. See Reverse Auction.

B2B: An online operation providing services that link two or more businesses.

B2C: An online concept in which a business sells products and services to consumers.

Exchange: An online service that creates a forum for exchanging information, products and services for which fees may or may not be charged. There are two primary categories of exchanges: information and market. An information exchange facilitates the free exchange of information among users and generates income from the sale of services to companies with storefronts or advertising on the site. A market-maker exchange provides an electronic forum for doing business. A key element of a market-maker is that the exchange never takes title to a product. The exchange occurs solely between the buyer and seller, with the market-maker possibly earning a commission.

Intermediary: A company that brings buyers and sellers together, charging fees to both sides. The concept distinguishes an intermediary from a broker, whose fee structure may imply loyalty to one or another party to a transaction. Depending on the fee structure, an intermediary and market-maker may perform similar services.

Portal: An Internet site providing news, research, statistical summaries, discussions, newsletters, online tools, online stores and a variety of other information and media for exchanging information for visitors. A portal may offer its services free to users and generate income from advertising and commissions charged to companies set up to offer products or services to customers for fees.

Reverse Auction: In a reverse auction, a buyer posts a request for proposals (RFP) for products or services, and sellers post bids to indicate what they would charge to provide those products or services. In a reverse auction, the bidders are the suppliers of the products or services, not the buyers. Another difference between a reverse and regular auction is that prices generally fall, instead of rise, as the auction proceeds. Therefore, lower bids are more likely to win in a reverse auction.

Vortal: A vertical-industry portal that provides information and resources over the Internet for a specific industry.