The pressure to beat the competition, minimize costs and still turn a profit weighs heavily on members of the waste industry.
To track waste weights and to evaluate account profitability, scale systems are becoming increasingly common tools on the trucks of today's private haulers. A select few innovators, however, are taking this concept one step further, employing scale systems to track recycling collection costs, expand customer service and, in some cases, rebate customers based on the weight of recyclables collected.
"This is just one tool in a whole kit of tools that haulers need," said Carol Dion, business manager at Corvallis Disposal Co., Corvallis, Ore., a 50-year-old firm that collects commercial, residential and industrial waste and recyclables in Benton County, Ore.
Nearly a year ago, the company purchased a front-load commercial collection truck equipped with Vulcan on-board scales and an on-board software system. Since then, it has been diligently weighing every pickup of old corrugated cardboard (OCC) on one commercial recycling collection route.
"Right now we're using the scales for R&D. Our main goal is to figure out our recycling costs so we can get an idea of exactly how much it costs to run the route," said Dion. To that end, the company is building a his-tory for each customer. "In addition to weights, we want to know how long it takes to service each customer."
Although Corvallis Disposal has been gathering information for nearly a year, the first six months brought many obstacles. "We had lots of errors and had to spend time fine-tuning the system and training the driver," said Dion. Consequently, the company will continue its research for at least six to nine months more, she said.
In light of the current dismal market for OCC, Dion is uncertain whether her company will provide discounts or rebates for recyclables collected. "We're open to anything. Right now, OCC prices are the lowest we've seen them. If they rise and we're hoping they will - we would consider offering rebates."
In the meantime, Corvallis Disposal has not yet informed its customers of the weight research. "It hasn't come up, and it hasn't been an issue," Dion said. "Our customers' next logical question would be 'Will you pay us for the materials?' We want to wait until we're confident in our data before we make any decisions," Dion said.
For now, Corvallis Disposal sees its database of weights and time spent at each stop as a way to enhance customer service and to distinguish itself from the competition.
Indeed, before purchasing a scale system for recyclables, haulers must clearly define their goals or run the risk of losing money. For example, one small recycler and processor in Tallahassee, Fla., installed scales on two collection trucks last summer, when recyclables prices were sky-high. Now, $26,000 later, the company is second-guessing its investment. Meanwhile, another hauling company has entered the market, offering waste collection discounts based on recycling weights.
"As commodity prices drop, it's harder for the recycler to compete with the garbage hauler," said the recycler's president. "We'll lose money [on recycling collection] just like they will - until one of us is gone."
Such fierce competitive tactics have become commonplace in many markets - and rival haulers aren't the only force to be reckoned with. In Nashville, Tenn., for example, processor Jefferson-Smurfit, Alton, Ill., has contracted trucking company Ryder Dedicated Logistics, a division of Ryder Systems, Miami, to collect high-grade office paper from 80 to 90 commercial customers, including office complexes and schools. The paper is hauled to a materials recovery facility in Nashville.
Under the contract, Ryder manages the drivers and five trucks, including a front-loader equipped with a scale, two roll-off units, a 24-foot straight truck and a tractor trailer. Jefferson-Smurfit pays its customers per pound of paper collected, sells the material and pays Ryder out of the sale revenue.
After a year, the operation has been overwhelmingly successful. "Business has increased 300 percent locally since we started working with [the processor]," said Bill Statzer, Ryder customer service coordinator. "We've seen many more competitors come into the market since we started." Indeed, Ryder reportedly is signing Smurfit collection accounts nationwide.
For now, however, weighing recycling accounts remains on the fringe of the hauling industry. When - if ever - will the trend catch on? "It will happen over the long term," said Al Bowman, vice president of business development for Mobile Computing Corp., Toronto. "Scales systems change the entire paradigm of the hauling industry, and many people aren't ready for that. Eventually, someone will differentiate themselves in the market."
Despite the potential rewards, differentiating oneself can be a cumbersome task at times. "[Using scales to track recycling routes] certainly requires an investment in time," said Dion. "As the information rolls in, [a hauler must have someone] who's willing and dedicated to analyze it. That will become an ongoing cost."
Finally, haulers should keep in mind one cardinal rule, according to Dion: "[Although] scales are certainly worth considering, they won't necessarily give you all the answers you need."