Final Takeaways from WasteExpo 2018

In a session called “Commodity Predictions: What’s Headed Our Way,” Dan Cotter of Cellmark, Jordan Tony of Moore Recycling and Laura Hennemann of Strategic Materials discussed glass, plastics and paper markets, with some of the news on glass more optimistic than what has been said before. The session explored how recyclers might get more “bang for their bucks” from all three material types, which commodities are already feeling the blow of China’s crackdown on imports and what other challenges commodities markets face.

“We expect glass to be relatively unaffected by China’s policy,” said Hennemann. “But material recovery facilities (MRFs) may slow down production of materials [that they were once sending to China], and glass will sit longer, increasing mold and contamination. So, the value will go down,” she said.

On a good note, she said, “We also are seeing more corporations wanting to include glass in their sustainability programs. I think a lot of consumers would be more likely to buy a brand if it had a stamp saying it was made from recycled glass.”

The glass container market is stable or down, while fiberglass, used in insulation, is up, and indications are the fiberglass market will remain strong due to high demand in housing construction, said Hennemann. She anticipates an uptake in highway beads, embedded in roadmarkings to increase night visibility, because of investments in infrastructure.

“But there are still lot of ways we can work together as an industry to bring glass recycling further,” she said, adding there are plenty of challenges to address.

The material is heavy, sharp and tears up equipment. And glass is being removed from programs and being landfilled.

“We are trying to educate MRF’s on how they can get more value from this material,” she said.

Another interesting trend she noted is that a lot of glass is coming into the U.S., especially glass made in Mexico that may have no recycled content. Some is being sent back, but glass recyclers hope for a glass tariff to help address the issue.

There has been an overall reduction in paper volumes, which will likely continue mainly because of the move from paper to digital systems. The only paper showing growth is packaging grade used for shipping, said Cotter.

In 2016, there was a 2.5 million metric ton reduction of paper exported to China. In January, there was a 44 percent drop, and overall we expect a 30 to 35 percent drop in paper exported to China, he told WasteExpo attendees.

“A tremendous amount of cargo has been rejected from China due to the new contamination threshold of 0.5 percent. They won’t take anything from a U.S. mixed MRF, and that’s a significant volume of material,” commented Cotter.

Meanwhile, he said, about 20 percent of commodities collected domestically comes from residential streams, “and we have to figure out new markets around the world.”

India picked up a lot of what China pushed away, and paper recyclers expect more than a million tons will go to that country.

“India paper mills bring this in because they were fighting their local collectors over high prices. But if prices climb, they won’t take it so we still have to deal with what to do on the processing and collection side to produce what the rest of world will take,” said Cotter.

There will be new markets, but finding new homes for paper going to MRFs may require looking at different ways to collect it to get contaminants out. But the simple solution is not to contaminate in the first place; it’s about how to change the system,” he said.

Paper requires a huge investment in machines, and he projects it will take three to five years to develop capacity to produce volumes and quality needed to build a strong market.

On the plastics front, too, there has been a drastic drop in exports due to China’s strict policy, “and there will not be a full recovery because China is enforcing its rules,” said Tony.

“We are already seeing the effects of the ban on rigid containers; some municipalities have taken them off the list of items they accept for recycling. But upgraded MRFs are extracting more value,” he said.

Separating polyethylene terephthalate (PET) and other plastics brings greater returns. But, he said, “We are seeing less plastic used per bottle, and in some cases, manufacturers are moving from bottles to pouches. We saw low scrap prices in 2016, so there is less incentive for recyclers to pull it out.”

“I think we can add some material rather than take it away, like polystyrene, which has a strong market,” said Tony. Densified polystyrene is used to make crown molding and surf boards, and some communities provide grants to MRFs to bale it.

With some recycled plastics, he said, “Some companies like Trex and Seven Generation continue wanting and using it because their customers expect it.”

In a session called “A Family Affair: Transitioning to the Next Generation,” Brian Jongetjes and Dan Jongetjes of Johns Disposal, Chris Coulter and Royal Coulter of Peoria Disposal and Joe Garbarino and Patty Garbarino of Marin Sanitary Service discussed what it’s like to run a family business–the easy, the tricky, the fun and the nerve-wracking aspects. Moderated by Scott Dols of Big Truck Rental, the session was a chance to learn how these waste entrepreneurs have kept the bloodline going over decades. They talked about how they attract and retain good workers from outside the family and what to do when a relative bucks tradition and decides not to join the business.

Patty Garbarino didn’t start out in the family’s trash business. She was a special education teacher, planning to take a leave from her career and go to Italy. “But my father said, would you help just a little with paperwork? He didn’t tell me the paperwork was in boxes and stacked up to the window–it took me six years to get through it, but staying was my best decision,” she recalled.

It’s been a learning experience for her and for some of the other family who have come on board over the years.

“Some of us are the third generation, and you realize not everyone is prepared to be a leader. So, we did a year-long course we call the Next Generation and 15 of us pulled together to see how prepared we were … to move into the next generation and almost all of us failed,” she said. The course work covers administration, technology, risk and financing among topics.

“The first generation was my father, and I see him as a maverick. I see my generation as the maintenance generation.”

She said the newer generations tend to anticipate the job would be easy “but the course work shows it’s not.”

Dan Jongetjes said he had to earn his family’s respect, just as if he were working for anyone else, and he got the worst jobs starting out.

“I am thankful for that. I was washing garbage cans outside in the winter in Wisconsin and cleaning the office.” He appreciated it not only because he got a chance to prove himself to his family but because he was able to learn the job from the bottom up, and it was how he gained respect of workers outside of the family.

Chris Coulter said all his sons signed noncompete clauses, and he has life insurance policies on them. Life insurance is a way to be able to buy out a family member, and estate taxes can be paid from the policy return.

“This insurance on a family member is important so if something happens to one, the other parts of the family are covered, and you have a natural progression to the next generation. So, keeping up with family relations is important, but you also need the financial and legal part,” he said.

Royal Coulter shared some business wisdom, too. “We laid out the next generation as ownership with our accountant’s help.”

“With any key position in our management team, all the boys [my sons] are welcome to have input on whether to hire or not, and when we made our sons shareholders we let everyone know. Our goal was to carry it on to the next generation. I think 90 percent of our employees love that. I think they see we are still building and trying to diversify our business units,” he said.

Dan shared his thoughts on when a family member doesn’t want to be in the business. “For me what’s important is all my kids had college degrees and could do something else if it’s not going to work out. You can’t make them come into the business. You want the best for them, and if they don’t want to be a part of it there are other ways to help them out.”

On the flip side, if a relative wants the position, do their families just pull them into it?

“Every job at our company goes out for formal job description and is posted internally and externally. And we hire the very best candidate. The first two years we implemented that program was tough, but it worked out,” said Patty.

What’s gone a long way for Brian Jongetjes is the chance to grow into a leader and decision maker in his father’s eyes. “My dad really respected us and let us loose with the business … I am hoping one day my kids will tell me what to do …”

To Joe Garbarino, it’s about both family and the rest of his workers, and pulling them into one team. “It’s family and the rest of the workers who are making the money for me every single day ... they are all leaders, whether recycling or maintenance or whatever they do, they are key people,” he said.

In a session titled “40 Under 40: Bold Insights from Rising Stars,” Waste360 40 Under 40 award winners Anna Delage of the South Carolina Department of Commerce, Nicole Willett of Waste Management, Jesse Escobar of the University of California, Los Angeles, and Sean Finn of Universal Waste Systems discussed how and why they got into waste management, what industry trends have caught their eye and what they see around the corner as the industry continues to evolve. The session was moderated by Ben Harvey of E.L. Harvey & Sons.

Delage was a pre-med student walking around on campus when she saw people rummaging through waste. “I was turned off but curious at the same time,” she said. “I ended up getting elbow deep in other peoples’ trash, and it sparked my interest when I saw all this material being thrown away. I thought, ‘what are we doing and how are we thinking about trash?’”

She decided she wanted to work on answers and changed her major to environmental policy and management and economics.

In her job, she tracks the impact of waste on the economy, and the commerce does a lot of work with a campaign called Your Bottle Means jobs. “It shows how bottles get turned into cool products and the lightbulb goes off for people when they hear my bottle can be made into a t-shirt or used in automotive [products],” she said.

Delage is especially excited to work on food waste recovery, calling it a critical pathway to sustainability moving forward. Composting, especially, looks promising, she said.

“Our job growth in the recycling industry has decreased in the last five years because of technology, but what’s interesting is we are seeing the opposite with the compost industry,” said Delage. “That infrastructure is developing, and there is job growth. We hear from our commercial clients they want to contract with one hauler up and down the East coast, but composting is a localized solution with small operations in place so you need to connect that infrastructure web, and I think we will see lot of growth in this area,” said Delage.

Finn, who has been in the business since he was 18, when he was working at a MRF, is focusing on preventing food waste in the first place, reaching out to schools, nonprofits and churches. “There’s edible food out there, and we know there are hungry people everywhere. Seeing that uneaten food is put to use is about establishing partnerships in the community.”

Escobar was in the Air Force for six years, then he studied environmental health, focusing on a personal passion: sustainability.

“I ended up at UCLA with a chance to help with its zero waste goal. I jumped all over it. I spent nights learning everything to know about recycling,” he said.

With a background in coding, he started developing his own apps to take inventory of litter bins, leveraging it as a tool to find a better way to manage the 600 bins on campus serviced by only three people. Now, he is focused on finding smart ways to sort on the front end, before materials go to haulers.

“It doesn’t have to be broken down by different plastics and other materials,” he said, but rather categories like dry and wet. “Then, waste haulers can sort further. The hauler benefits, but clients can benefit, too.”

Willet talked about how she sees the industry changing over the next five years and what she thinks needs to happen. “I think automation will continue to advance. We have an aging population of drivers. And millennials [the next generation to fill the jobs] like flexibility and gaming. So, can we make the inside of the truck more automated and more technology friendly? And can we accommodate millennials in terms of flexibility?”

She thinks the entrepreneurial gamechangers moving forward will be those who can make services most convenient for customers.

In a session called “OSHA Under Trump,” Aaron Gelb, Conn Maciel Carey and Jim Slaughter of Beveridge & Diamond discussed whether OSHA has changed in the 15 months since President Donald Trump took office after pledging to cut back government’s reach into workplaces. Moderated by Jerry Peters of Rumpke Consolidated Companies, the session also focused on possible agency changes down the road, and the speakers gave tips on getting through OSHA inspections.

“Trump said there would not only be less enforcement but that there would be deregulation. We are not seeing efforts to deregulate or deconstruct at OSHA,” said Gelb.

He said the biggest surprise to him was that the number of inspections slightly increased this past year. There was a 4 percent increase from 2016 to 2017.

But there are some rules that were in place, and/or being reviewed but not yet passed, that have been rescinded. For instance, a rule that required contractors to self-report several types of violations.

OSHA will change the antiretaliation aspect of the illness and injury reporting rule, too, Gelb projected. “We don’t know what the changes are yet, but I think the antiretaliation aspect will be revised or removed. By this aspect of the rule, employers cannot discourage employees from making reports,” he said.

He said policy change, which has been very slow, requires policy makers to be in place. And although FedEx Safety Executive Scott Mugno has been nominated for assistant secretary of labor, the position is currently in a holding pattern.

“We don’t know what direction the agency will head. I think Scott would be serious about safety, being a safety professional, but for now, the only political appointee is Loren Sweatt [deputy assistant secretary of labor] who has kept a low profile,” said Gelb.

He advises industry to watch the budget very closely and said current trending with regard to the OSHA budget is comparable to that during the Obama administration. “To me, that says there is the ability to do the same level of enforcement. I think we will still see criminal prosecutions, just as under Obama,” said Gelb. But he thinks employers will not have to cite as many details, and they will have a chance to correct issues if they are minor.

In summary, he said, “There has been change though not as much as expected. But I think the real change will come once we have political leadership. I think we will see more compliance assistance for employers. We will see enforcement, but I think it won’t be as punitive. Although if an employer is a bad actor, it will not be ignored.”

Slaughter added insight on how to deal with inspections. “If OSHA comes unexpectedly, you want a plan in place to handle the inspection in a way where it goes as smoothly as possible. Ask to see a written complaint if the inspection is the result of aformal complaint,” he said and advised employers to know the process if a citation is issued. It includes:

Day three ended with the EREF Auction, where WasteExpo attendees made bids on a variety of items like golf outings with key players in the industry and equipment and products from leading manufacturers.

Waste360 Editorial Director went live from the show floor with Rachel Oster, cofounder of Women in Solid Waste & Recycling (WISR) and one of Waste360’s 40 Under 40 winners, to discuss the opportunities available for women in the industry.