As the Profile of environmental issues has risen dramatically in American society and politics in recent years, businesses are wanting to increase their recycling. That's the word from the commercial collection providers that discussed, via e-mail, with Waste Age the state of their operations.
In addition to the rising demand for recycling services, the Q&A participants noted that increasing material and health care costs, the search for qualified workers, and the cost of complying with regulations are issues that also affect commercial collection providers.
The Q&A participants include:
Jeff Rumpke, vice president of Cincinnati-based Rumpke Consolidated Cos.'s Cincinnati market;
Thomas Winstead, vice president of Raleigh, N.C.-based Waste Industries' East Division; and
Ron Schmidt, general manager of Bryan, Texas-based Texas Commercial Waste.
Waste Age (WA): What trends are you noticing in commercial collection?
Rumpke: Rumpke is implementing more commingled recycling programs for commercial customers.
Winstead: We have enjoyed an improved, stable pricing environment over the past two years. There has been an increased customer demand for recycling. We are constantly challenged to respond and react to the impact of government regulations (old corrugated container disposal bans, the North Carolina ABC bottle recycling bill, etc.), fees and taxes on the collection of solid waste. Broker activity, which is normally isolated to a cost driven customer base, has increased. We have noticed an even stronger trend in customers demanding customized, consistent service delivery complimented by a direct relationship with their service provider.
Schmidt: More and more, national accounts are using waste brokerage firms to get a handle on solid waste services. This has made pricing the determining factor rather than service as to who gets this part of the waste stream.
WA: What new services are your customers asking for?
Rumpke: Contractors are becoming more involved in Leadership in Energy and Environmental Design [LEED] green building initiatives. Businesses want to recycle as much as possible. They are requesting commingled recycling programs and e-waste recycling programs. At the same time, customers are asking for more employee training options to make certain their employees are following the correct procedures to increase recycling at their locations.
To keep up with the demand for more information, Rumpke Recycling has recently launched a new Web site — rumpkerecycling.com. This is a whole new Web site in addition to the company's main Web site: rumpke.com.
Winstead: E-billing and online access to customer information. E-waste disposal, and more specialized recycling (i.e. N.C. ABC bottle recycling, food waste recycling).
Schmidt: The world is going green. More construction and industrial customers are asking for recycling.
WA: Do you collect recyclables? If so, are they in a single stream?
Rumpke: Rumpke Recycling collects paper, cardboard and/or commingled recycling for commercial customers. We also offer e-waste, tire recycling and even in-plant resource management programs. The majority of Rumpke Recycling's material recovery facilities have single-stream processing capabilities.
Winstead: Yes, we collect recyclables. The trend is to single stream, but we still have customers that require source-separated collection.
Schmidt: Yes [to the first question]. No, we ask our customers to do some sorting so that the commodities we recycle are of a premium grade.
WA: Besides fuel, are there any other expense increases that are affecting your operations? Have your prices increased accordingly?
Rumpke: Increasing local and state disposal and generation fees are making an impact, as well as supply cost increases and rising health care and insurance costs. The costs for products that are petroleum-based are constantly rising. The prices for tires, antifreeze and all engine oils are increasing. Recycling bins and waste wheeler prices have increased by 7 percent in recent weeks. Pricing adjustments are necessary as the cost of doing business increases.
Winstead: Compliance driven costs (i.e. the Sarbanes-Oxley Act, landfill regulations and site restrictions, 2007/2008 truck engines) have had the biggest impact. We are constantly challenged to recapture these costs. It is unfortunate that our customers have to bear unwarranted price increases as a result of state and local legislation.
Schmidt: Labor. [Prices have increased] to some degree, but not enough.
WA: What is the biggest challenge facing your operations, and what are you doing to address it?
Rumpke: The number one challenge is obtaining local government approval for site development projects and/or landfill expansions. To combat the issue, Rumpke begins landfill expansions several years in advance. In some situations, we have combined expansion plans with light industrial development projects to attract favorable approval from government leaders.
Rumpke also has developed a formal community communication policy. The policy is a promise to facility neighbors, our customers and the communities we serve. It is Rumpke's guarantee that we will keep our community informed of new developments at our locations. To fulfill that promise, we place expansion updates on our Web site, send neighbors quarterly newsletters, host landfill and recycling tours, provide educational curriculum and presentations, and even invite our neighbors to discussion meetings.
Annually, more than 10,000 guests take a tour of our largest landfill, Rumpke Sanitary Landfill, near Cincinnati. These efforts to communicate facts about our operations and our future development plans pay off. Recent polls show that about 90 percent of Rumpke Sanitary Landfill's neighbors have a favorable view of Rumpke.
We also face the challenge of finding and retaining qualified drivers. To alleviate the issue, we have developed new training programs that help train new employees to receive their commercial driver's licenses. The up-front investment for education and training results in well-prepared drivers who continue working for Rumpke for years after initial training.
Winstead: Labor. The demand for skilled labor is outpacing the supply, forcing us to expand our geographic recruiting and networking areas. It also demands that we be more creative in our recruiting and employee retention efforts. Also, reacting and adapting to overly burdensome and overzealous government legislation.
Schmidt: Finding enough qualified workers. Raising wages short term and developing worker training programs long term.
WA: What steps have you taken to improve efficiency in your operation?
Rumpke: Rumpke has implemented systematic, continuous route auditing conducted by an internal team member who works outside of the division being audited.
Winstead: We constantly strive to optimize routing and tracking operational data. We have recently restructured our “back room” operations to facilitate a more efficient, centralized data management. We have positioned ourselves to maximize internalization opportunities.
Schmidt: Measuring everything. Equipment costs, employee productivity, and the waste stream makeup and volume.
WA: Have you noticed a move by local governments to take on commercial collection?
Rumpke: We have noticed the opposite. More governments are avoiding commercial collection.
Winstead: There is a growing trend for local government entities to view waste collection and disposal as a revenue source, and they have a wide range of weapons in their arsenals to capture that revenue — flow control, municipal owned and operated fleets, franchising (exclusive and non-exclusive), fees and taxes — just to name a few.
Schmidt: Not in our area.
WA: What initiatives have you taken to grow your business, and how did they work out? Do you have plans for any future initiatives?
Rumpke: Most recently, Rumpke has specialized its sales force according to lines of business. This adjustment streamlines operational requests and customizes services to better meet customer needs.
Winstead: Waste Industries has a disciplined, targeted growth plan addressing both internal and external growth opportunities. Another corporate initiative that has influenced growth has been our commitment to strengthen the workforce. Our growth initiatives have been successful, and our performance reflects those successes.
We certainly do have plans for future initiatives, but we're not giving up our secrets!
Schmidt: We recently built a new facility to maximize our maintenance efforts. We are looking at C&D recycling.
WA: Describe your commercial fleet maintenance program, including any outsourcing that you do.
Rumpke: Rumpke's commercial maintenance program is quite extensive. Rumpke uses a Transman Maintenance Tracker software system. This software allows us to catalog details such as daily truck inspections and hourly fuel usage to cross reference with preventive maintenance procedures in an effort to ensure that maintenance is completed before problems arise. The program is extremely detail-oriented and uses “system” codes and “reason-for-repair” codes to track the cost for repairs per part and per number of hours.
The bulk of Rumpke's maintenance is completed at our 14 truck shops. Rumpke also owns its own complete rebuild facility in Norwood, Ohio. The rebuild facility is used by all Rumpke locations when necessary. If maintenance is required on a part that is under warranty, Rumpke sends the repair to the dealer, which in our case may be International, Mack or McNeilus.
We have also added a corporate maintenance trainer. Today's engines are more technologically advanced so continuing education for our mechanics has become necessary. We added a corporate training area, and mechanics from throughout Rumpke's service regions participate in training sessions on different vehicle components. We also use truck diagnostic technology to identify maintenance issues.
Winstead: We have a standardized fleet maintenance program that capitalizes on the efficiencies and buying practices of our centralized purchasing department. Our shops are equipped to handle routine maintenance and hydraulic repairs. Extraordinary repair jobs are outsourced.
Schmidt: We do basic preventive maintenance work and basic repairs. Large jobs, such as engine and transmission overhauls, we outsource.
WA: What is the biggest change that has taken place in your operation during the past decade, and what changes do you see occurring in the next 10 years?
Rumpke: Throughout the past 10 years, Rumpke has placed more emphasis on driver safety programs, and we've seen a reduction in accidents. We have also re-focused our efforts on route auditing and preventive maintenance.
During the next 10 years, Rumpke will continue to enhance its driver safety programs and maintenance programs. At the same time, we are looking for ways to make overall operational improvements to increase efficiencies. For example, Rumpke is looking into the possibility of converting recovered methane gas into truck fuel.
Winstead: The biggest change for Waste Industries over the past 10 years has revolved around the transition from a private to a publicly held company. The most challenging aspects of that transition have been managing rapid growth, transitioning to a centralized information management system while maintaining a decentralized service delivery system, and introducing technology necessary to accommodate those challenges.
Our acquisition and landfill initiatives have enabled us to enhance our presence and made us more competitive in key markets.
Over the next 10 years, we envision continued growth (the Southeast is a vibrant market), greater interface with our customer base via technological advances, maintaining our strategic initiative to increase and maximize our internalization opportunities, and a stronger push for public / private partnerships as both sectors vie for the same revenue dollar.
Schmidt: Finding people who have a good work ethic and wish to make our industry a career. New methods of waste disposal (other than traditional landfills) will be our challenge in the future.