Key Takeaways from Day One of WasteExpo 2018
With various education sessions and panels taking place across a variety of tracks and co-located events, there was a plethora of insights from day one at WasteExpo.
WasteExpo, North America’s largest solid waste, recycling and organics industry event, kicked off on Monday. On day one, attendees took part in the Waste360/Stifel Investor Summit and flocked to various education sessions and panels, which focused on topics like technology, safety, waste reduction, franchising, collection and transfer, regulations and policies, food waste, anaerobic digestion and more. The first night of the conference concluded with a Welcome Reception at the Marquee Nightclub and Dayclub at the Cosmopolitan Hotel.
Here are some key takeaways from the first day of WasteExpo:
The Waste360/Stifel Investor Summit took place on Monday. During the summit, Michael E. Hoffman, managing director/group head diversified industrials at Stifel, spoke with a number of key players in the industry about a variety of topics, including the Canadian market opportunity, the state of the industrial economy, the changing face of solid waste, the rise of technology and the current and future state of medical waste and document destruction in North America.
At the summit, Ron Mittelstaedt, CEO of Waste Connections, shared that the company has seen significant growth over the past 20 years, increasing materially in size. This is partially due to the fact that the large company focuses on operating its markets/segments as a smaller, nimble company.
Mittelstaedt and Waste Connections CFO Worthing Jackman agreed that they do not want to overcomplicate what should be a simple business.
Mittelstaedt also commented on the recently enacted China import ban and contamination standard, saying, “This is a sustained decline; it’s not something that’s going to be a short term decline in commodity prices.”
Advanced Disposal CEO Richard Burke ranked safety and labor amongst the company’s biggest challenges. He also named recycling as a challenge, as old corrugated cardboard (OCC) is down, and the company is in some situations where it has to pay for mixed paper.
Burke also shared that the company plans to remain disciplined on pricing for the year, and that the company’s capital return drivers include market selection, quality of service and management incentives.
Kate Worley of Wal-Mart Stores Inc. discussed the company’s recycling programs, which include OCC, metals and food waste. Wal-Mart has set a goal of diverting at least 90 percent of its waste from landfill or waste-to-energy facilities by 2025, and it currently has a waste diversion rate around 78 percent.
City of New York Department of Sanitation (DSNY) Commissioner Kathryn Garcia shared that DSNY is aiming to reach zero waste by 2030, and to help reach that goal, it’s expanding its residential organics waste collection program.
DSNY currently has more than 70,000 applicants for driver positions, which is partially due to its low turnover rate and higher-than-average pay.
Garcia also provided an update on New York’s commercial franchise zoning system, stating she expects to have an implementation plan ready by summer and an actual franchise system in place in the next five years or so.
Casella Waste Systems CEO John Casella shared that the company has room for growth and improvement and that its recently acquired transfer station is part of its growth opportunity.
He also discussed how the company is handling the challenges brought on by China’s import ban and contamination standard, and how it will utilize the SRA fee, which is similar to a fuel surcharge but for commodity prices, to manage risks.
Bryan Staley of the Environmental Research & Education Foundation (EREF), Darrell Smith of the National Waste & Recycling Association (NWRA), David Biderman of the Solid Waste Association of North America and Mark Reiter of ISRI discussed bridging policy data and member needs.
The industry leaders agreed that U.S. waste and recycling companies are in need of expanded recycling education and that education is needed to reduce contamination, which is one of the industry’s largest challenges.
Republic Services CEO Don Slager, executive vice president and CFO Chuck Serianni, executive vice president and COO John VanderArk and executive vice president and Chief Development Officer Brian Bales discussed what the company is focusing on both now and in the future.
Republic is using more real time data in the area of customer service to avoid pushing price increases to customers that have had recent service interruptions, building upon its reliable fleet and figuring out the best way to manage and combat recycling challenges.
Closing out the investor summit was the CEO panel featuring Burke, Mittelstaedt and Waste Management CEO Jim Fish. The trio touched on labor, safety, technology and recycling.
Fish stressed that sending a large amount of material to a single stream recycling facility that ultimately has to go to a landfill is not recycling because it increases the source diversion rate and actually makes the cost of recycling much higher due to contamination.
Over the last 10 years, contamination rates have nearly doubled. This is partially due to the incentives to get people to put more in the recycle bin even if it’s not recyclable.
The trio discussed some actions that could help remove the industry from the top 10 most dangerous jobs in America list, such as shifting from rear load collection vehicles to automated side loaders and reducing driver distractions.
Technology is entering the industry at a fast pace, and the industry needs to focus on technology that “pulls” customers in versus the act of “pushing” technology out to customers.
During “China’s Import Regulations: Where Do We Stand?” session, Dylan de Thomas of The Recycling Partnership, Mark Reiter of the Institute of Scrap Recycling Industries (ISRI) and Susan Robinson of Waste Management touched on the latest news out of China. Moderated by Anne Germain of NWRA, the session was an opportunity to learn about the impacts of China’s restrictions on exports and whether there might be light at the end of the tunnel. Presenters also advised on what the domestic industry can do now to extract value from materials they must find new homes for.
The U.S. exports 37 million metric tons of scrap worth $17.9 billion, and we need trade as an outlet. This means paying attention to China, as nearly 40 percent of the 800 million metric tons of scrap produced annually go there, said Reiter.
Meanwhile, he said, China is limiting not just trash but valuable commodities, with plans to market its own.
Based on conversations ISRI has had with the Chinese government, he said, “This is China understanding recycling is environmentally friendly. And we will be competing with them to market scrap."
China banned certain mixed paper and postconsumer plastics some time ago, and last week, the country announced that by the end of the year it will ban postindustrial plastics and some nonferrous metals.
Reiter cited the biggest challenges today as meeting the 0.5 contamination threshold, inspection inconsistencies and market competition.
“Different ports inspect differently,” he said. “There is no definition of 0.5 percent, so there are officials in China who are confused.
You’ll be hearing the term “Blue Skies” if you haven’t yet, referring to China’s more stringent inspections and efforts to ensure compliance with the standards.
Reiter believes current conditions with regard to China's expectations will be longer term than what the industry thought last fall, “and we still don’t see an end point.”
Moving forward, he advised industry stakeholders to look for other outlets, particularly India, Southeast Asia, Mexico and Vietnam.
Robinson spoke of who is affected in what way and had ideas for responding.
“Without the China market, we have 13 million tons competing in the same markets, which impacts all our customers and municipalities,” she said. “We will all feel the impact of a supply and demand issue.”
Meanwhile, she said there is a “complete disconnect between demand and what comes in. When demand stops, material keeps coming in, and recyclers are expected to find a place for it. That’s a tough dilemma,” especially since about 25 percent of recovered material is pulled out for contamination, resulting in high processing costs.
“We focus so much on getting material in the cart that our customers think that’s all that recycling is. They think we will find a market for what they put there. I suggest helping them understand what they put in the cart is only part of the story,” said Robinson.
She referenced strong markets for some plastics like high-density polyethylene but said paper is a problem, especially with China’s recent policies. Changing the fact that China’s mills are closing is not an option, but she said improving quality is.
“A couple of our facilities are doing well on inbound marketing and educating consumers,” she stated. “But we have different, extremely costly materials coming in … and increased processing costs to meet new quality specs, and this is what we have to focus on. We need to work collaboratively with all stakeholders we engage with. I encourage local haulers, recyclers and municipalities to work together on solutions.”
de Thomas noted a radical shift in how China would do business with other countries from 2000 to 2014.