Takeaways from Day Two at WasteExpo 2018

In a Fireside Chat, Waste Management President and CEO Jim Fish shared with a robust crowd his thoughts on making the solid waste industry safer and attracting millennials and minorities. He shared his take on China’s pushback on imports and on franchises. And also he made some projections, including around a disruptive technology he sees in the pipeline for the waste management industry. The session was moderated by Darrell Smith, CEO and president of NWRA.

“We need a consistent message with regard to how we treat safety. And it’s not an initiative or strategy. It has to be engrained in the culture,” he said, reminding attendees that the waste industry is the fifth most dangerous occupation in the U.S.

NWRA had just honored a driver and operator the day Fish stood at the podium at WasteExpo. “They are as safe as they can get,” he said, but he questions the habits of others on the road. He said he’d like to see stiffer penalties for texting and driving in particular.

Fish broached the questions: Do millennials want to work on a truck? And how do we make these jobs attractive to them?

“I think today millennials are not really different than baby boomers or my father’s generation [who would work almost any job] other than they did not live through the Great Depression, and their options are numerous, which is a good thing. That means, in my mind, we have to become better leaders,” he said.

He added the focus needs to be on recruiting not just drivers but managers, and in building a more diverse workforce at the managerial level.

With regard to how he feels the recycling business is going, especially in light of China’s ban on multiple materials and drastically lowered contamination rate, he said, “I’m a fan of transparency and not necessarily of blind optimism. And now it’s hard to be optimistic about the recycling business because there are challenges.

“I understand why China is pushing back. They were importing trash. While China is taking aggressive steps, I think there will be light at the end of the tunnel. But I think the model has to change. I’d like to change the model over the next few years,” he said.

Fish believes part of the problem leading to contamination is huge pressure to recycle, “and that is aspirationally good, but aspiration to recycle [alone] is not necessarily good,” he said. This aspiration and pressure he pointed out has resulted in materials ending up in bins that don’t belong there that end up landfilled. Waste Management sees 30 to 40 percent contamination in some of its plants.

Fish differentiated between recycling and diverting, stating recycling is intended to result in reuse and conservation of natural resources. “But diversion is not necessarily about saving resources. And I don’t feel good about myself if it goes to the landfill.”

Education and awareness will be key to seeing that well-intended people recycle properly, and he believes the NWRA will play an integral role in educating both consumers and municipalities.

“NWRA can move the conversation back to recycling and not diversion,” he said.

Moving on to industry innovations, he said cameras in trucks may have been the best safety move in decades.

“We can watch and see if someone was texting and drifting into a truck driver’s lane … that has been a tremendous addition of technology.”

Technology will also come into play in addressing what to do as more landfills reach the end of their lives, he projects.

“I think within 50 years or less, there will be replacement technology that helps with the problem of landfills going away [as an alternative to transporting waste long distances].”

He was especially excited about autonomous vehicles, a technology he said has made tremendous strides already, but he thinks public perception and government regulations are what’s holding it back.

“It’s hard to convince neighborhoods we should have driverless trucks prowling around … I think in a decade it’s possible we will have at least a test route running an autonomous vehicle,” he said.

With regard to franchises in the solid waste industry, he said he has no preference between franchise and open market from a hauler’s standpoint. “We are serving customers, and that’s the way we look at it.”

Waste Management’s conversion to natural gas has been a big company priority.

Fifty percent of the company’s routed vehicles will be running on natural gas in the near future, and 90 percent of the vehicles it buys this year will be natural gas trucks. This conversion is lagging behind in small rural areas, and he said the company is looking to find a solution to fill in the gap.

When asked what keeps him up at night, he said it’s not so much industry-specific challenges but the 43,000 teammates that rely on him. “There’s no one else I can point to now; it’s me … so I am wanting to make sure I make the right decisions.”

He closed on touting the private equity investment business model. “It’s a great business model. It has some volatility, but it’s a continuous growth model. … there’s a nice growth trajectory, and this is a great place to make a career.”

After the Fireside Chat, Fish spoke with Waste360 Editorial Director Mallory Szczepanski about recycling, Q1 earnings and how he’s seen the industry change over the years.

In a session called “Industry Trends: What Should You Be Watching?,” Bryan Staley of the Environmental Research and Education Foundation (EREF), JD Lindeburg of RRS and Michael Hoffman of Stifel discussed the commodities markets, emerging opportunities to manage increasing volumes of a problematic commodity and data’s role in driving innovations. In this session moderated by Anne Germain of NWRA, presenters also projected which trends will have the biggest impact over the next five years.

The lagging commodities market will probably rise again, but we need to clean up the waste streams.

“Fundamentally, we will probably end up with a stronger, more resilient system than the current one. But it won’t look the same,” he said.

He pointed out that battery manufacturing is growing rapidly and fire suppression and detection systems are not up to task to deal with these products at the end of their lives.

“The truth of the matter is batteries are doing us a lot of good and enabling us to do what is environmentally beneficial,” Lindeburg said, citing innovations like electric cars and solar.

While batteries pose challenges for the solid waste industry, the industry is starting to develop alternative disposal and recovery methods. Meanwhile, he believes, the challenges pose opportunities.

“A lot of service will be needed to minimize risk ... there is motivation to buy these services, and that’s the good of it,” he said.

Plastic is another problem, historically, today and seemingly into the future.

Sixty-five years of plastic production generated almost 90 billion tons of plastic. Very little is recycled, and a lot of it ends up in the ocean, he told WasteExpo attendees.

He pointed again to a need, moving forward, to look at end of life management practices.

There is no scalable recycling solution, and it looks like greenwashing instead of solving problems, he said, though he noted some brands are concerned.

“What’s happening is comparable to the e-waste issue where there were piles with brand names on them.”

Companies wanted to do damage control, which drove interest in putting together solutions, and he said there is an ongoing need for these solutions.

Hoffman spoke of the cost of dealing with trash, explaining you can’t take shortcuts in this industry.

“Operators realize they are better off with a truck that’s 90 percent full at a high price than one that’s 100 percent full at a cut price,” he said.

He broached the topic of recession and said there appear to be no signs of recession in the U.S.

He said pricing is ranging in ways that are sustainable and that tax reform has been a positive.

At one time, the U.S. had the highest risk adjusted cost of capital after tax relative to anywhere else in the world, he projected.

“But we narrowed the risk adjustment after tax gap,” he commented. “It will take years, but companies will put big chunks of capital to work and put in infrastructure to drive employment.”

Hoffman referred to recessions in 2014 and 2016 that he said were technically primarily industrial recessions, and he claimed these events were the “deck clearing to allow new growth.”

Public companies are expanding, he noted, and he believes the trend will be new business formations that will drive collections.

With regard to what to expect with China’s decisions around recycled commodities, he said, “My opinion is China will approach waste management like it did telephony where it skipped analog and went straight to digital. In waste management, it will go straight to a circular economy and modern landfill has minor role to play. … They will learn how to do a circular economy … they won’t need our imports. They will figure out how to do it internally.”

He said education needs to be a priority, particularly to enlighten the next generation–the Z generation–on what’s reusable. And that people need to understand sustainable practices come with a cost.

“People want to recycle but don’t want to pay … so, we have to say, if they want a circular economy, it’s not free.”

Staley spoke of several trends, including innovations where data plays a significant role. He cited as an example that data can help determine if a large investment in gas to energy makes sense.

Data is driving innovations in collection, too, as well as helping to inform on how to run more efficient and cost-effective operations.

“You can see how far a truck has driven, the average distance between stops; you can get average time per route. And real-time data can be used to figure out route-related problems and solve them,” he said.

Changing policies and regulations are driving changes, he said, citing the example of leachate management.

“The cheapest way to manage leachate is to put it in the sewer and send it elsewhere, but a lot of wastewater treatment plants are not accepting leachate anymore. So, now a landfill has to implement [another practice] like onsite treatment.”

Staley discussed operational considerations tied to challenges that the industry faces, such as the issue of needles regularly entering materials recovery facilities (MRFs).

MRFs are putting more pickers on the line, potentially increasing exposure to needle sticks so needles are an important consideration, he said.

Among trends that he predicts will have great impact in the next five years, he said, “We will see a greater connection between manufacturers and the waste side to create materials that have meaningful impact downstream. So, we are not just greenwashing.”

In a panel discussion called “Safety Technology: A Hauler Roundtable,” Jeff Martin of Waste Management, Jerry Sjogren of L. Harvey and Shawn Mandel of Waste Connections talked about distracted driving, safety technologies like DriveCam and 3rd Eye and showed videos capturing driver events and explained how these clips became learning tools.  The session was moderated by Michael O’Connor of Premier Waste Services.

One point made early in the discussion was it’s important that drivers not engage with tablets when they are in motion. So, there is technology where when they are moving, the screen goes static.

“We will not operate while moving, and we use a program where drivers don’t get calls from dispatchers while they are driving, but only get audio alerts when the truck is stopped,” said Martin.

Distractive driving is a big issue, he said.

“When I go to meetings, I ask if the roads are getting better, the same or worse, and not one person has told me they are better. Some say they are the same, but most say they are worse and it has to do with more distractive driving and more aggressive driving than ever before.

“The public needs to be educated about distractive driving and the threat to our people,” he said.

All three spoke of on-board cameras for safety, driver training and documentation of important information.

Initially, drivers were not happy with being recorded on camera, but Sjorgen said it helps to explain to drivers that if they aren’t wrong this is going to help them.

And it helps the company “because it keeps honest people honest. There’s less time investigating, and we can exonerate them when there’s an accident that’s not their fault … You can show drivers video and celebrate when they do well,” said Sjogren.

Collectively, the panel members pointed out other benefits of on-board cameras, such as the ability to document incidents when dealing with insurance companies and police following an accident report. And the ability to document justified missed pickups, for instance, when there is a problem with a stop due to a blocked container or unsafe conditions.

“When you use cameras to give recognition, they realize it’s to continuously hone their skills, and this is a great technology to do just that. When we see the risk scores go down, we get excited,” said Martin.

The panelists spoke of technology to detect lane departure.

“It’s already here. 3^rd Eye can do this. And Lytx is going to put out technology for lane departure, too,” said Mandel.

“With telematics, we can tell if there is an issue with breaking … and your next route comes up on a GPS and tells you where to turn, and we find this to be exciting, too,” said Martin.

As far as what safety technologies will have most impact in the next few years, the panelists thought facial recognition will be big. It’s able to detect, for instance, if the driver’s eyes are closed for a period of time.

Up-and-coming technology includes products with the ability to identify if a light is red, yellow or green as a truck enters an intersection, or if a driver came to a stop at a stop sign.

“As these technologies evolve I think they will be a gamechanger,” said Mandel.

Day two also featured an awards ceremony for the Waste360 2018 40 Under 40 award recipients and a special reception for international guests.