FOR THE LAST COUPLE OF YEARS, the soaring costs of fuel have spiked the blood pressure rates of collection managers. Going forward, however, the biggest source of stress for managers could very well involve another supply shortage — that of good workers.
After conducting a cyberspace roundtable with public and private solid waste collection managers, Waste Age found that finding and retaining enthusiastic, well-qualified employees ranks high on the list of challenges facing the industry. The problem is especially acute in the public sector, which is hard-pressed to compete with the higher wages being offered by private firms.
The sharp increases in gas prices ebbed somewhat in 2005, but fuel costs will continue to be a big issue in 2006, affecting everything from truck tires to employee wages, the roundtable participants concluded. In addition to employee and gas concerns, the roundtable participants pinpointed insurance expenses, employee safety and increasing route efficiency as other issues that loom large for decision makers in the solid waste industry.
The collection managers who participated in the roundtable included:
Shawn Anderson, general manager of Republic Services of Columbus, Ohio. The division of Ft. Lauderdale, Fla.-based Republic serves about 20,000 commercial and industrial customers in Columbus and the surrounding areas, as well as a small amount of residential customers. The operation employs 135 workers and owns 94 collection vehicles.
Mark Banks, owner, M-T Trash Inc., Bridgeville, Del. The firm employs 17 workers and handles about 160 to 190 tons per day of residential and commercial solid waste. M-T serves about 10,000 customers with a hooklift truck, five rear-loaders, three front-loaders and four roll-off vehicles.
Wayman J. Pearson, key business executive, Solid Waste Services, Charlotte, N.C. The Collection Division of the city's Solid Waste Services Department has 168 employees and operates 130 trucks.
Andy Schweizer, owner, Ace Solid Waste, Ramsey, Minn. Ace serves 70,000 residential and commercial customers in the northern metropolitan Minneapolis area. With 85 employees, the collection company operates a transfer station and owns 60 vehicles.
J. Michael Wegner, solid waste manager, Abilene, Texas, Solid Waste Services Department. The department serves 33,396 residential and 3,827 commercial customers. The department uses 12 automated trucks, 10 front-loaders, four roll-offs and five rear-loaders.
Waste Age (WA): What is the biggest challenge currently facing your operation, and what are you doing to address it?
Pearson: The major challenge — due to budget restraints since 9/11 — is our struggle to recruit and retain competent employees with commercial driver's licenses [CDLs]. This is a very competitive market in the transportation industry. Unfortunately, we have not been able to be competitive with the private sector [as far as] wages. Further compounding this situation is a high percentage of our employees will be eligible for retirement over the next three to five years.
Anderson: I think there are three major challenges. One, [we] must have the entire organization continually focused on safety in every aspect of the business. Two, we need to continually work to manage all costs. And three, we need to always be focused on developing our people. We know that the services we provide are only as good as the employees who deliver them to the customer.
Banks: Insurance costs and fuel costs are the biggest problems. Fuel prices affect everything, from tires to the steel in the equipment to the extra costs for employees.
Wegner: The cost of fuel and steel have really hit us hard, but I think the biggest challenge is getting and keeping good people. Being a municipality presents challenges in paying a competitive wage for this type of work.
Schweizer: Our seasonal operations require us to operate lean in the summer, while in the winter months we have extra people. Our solution is to provide incentives to encourage winter vacations and to save the major projects and equipment rebuilds for the winter months.
WA: What are you doing to find and retain quality employees?
Wegner: It is very difficult to find qualified and quality people. We have one of the lowest unemployment rates in the state. We try to draw from our [nearby Dyess Air Force Base] retirees and have had some success there. Once we get them, we have monetary safety incentive programs, continuous training, opportunity for advancement, and a nice, friendly place to work.
Banks: It's getting harder to find people who really want to work. Those that do and are talented will stick around. We have some incentive programs and offer bonuses for good performance and safety. We'll see some employees try to get other jobs on the side, but we tell them that it usually just causes trouble in the long run.
Anderson: Getting good people is easy if you take your time, ask the right questions, and clearly communicate the job and the expectations. If you are hiring to put a warm backside in the driver's seat, you're going to fail. There is one word for keeping employees happy: respect.
Pearson: It is extremely difficult to recruit employees with CDLs. Typically, we hire employees and provide the necessary training to enable them to obtain their CDLs. The major focus is to evaluate our employees through a performance-based evaluation system and reward them with gain-sharing when service is delivered below the established per-unit cost.
Schweizer: We don't always hire good employees. We do, however, only keep the good ones. One simple thing we do is that we don't allow our employees to use profanity. That right there gets rid of a lot of undesirable elements in the workplace and helps to promote a strong company culture.
WA: What has been done in recent years to improve workers' safety and ergonomics?
Pearson: We produced a safety video that is being used as a training tool for our new and seasoned drivers; [began using] the Smith System training course; [created] a driving range, which we utilize on a monthly basis to further the skills of our drivers through assimilated training; and revised our certification process to ensure our drivers receive as much training as possible prior to being assigned a truck.
Wegner: We constantly provide safety training, from monthly meetings to weekly tailgate meetings. We have an employee committee that recommends improvements. Each truck operation is checked to make sure the employee is able to operate comfortably and efficiently. The position of arm rests are very important when operating the joysticks.
Schweizer: Driver comforts are continually evaluated. All trucks have air-conditioning and elbow rests, and receive weekly service. Ear protection is also made available for drivers. High visibility uniforms are a good reminder to motorists, and to our people, that we want to be safe. Monthly safety meetings and one-on-one training reinforce our commitment to safety.
Banks: We have just one fully automated rear-loader, but we're scheduled to get more automated trucks in April. These vehicles will definitely help to provide a safer environment for the drivers and helpers.
WA: How have your fleet operations been affected by the rising cost of fuel? Have you made any changes to reduce consumption?
Anderson: Our vehicles burn about three to four gallons of diesel fuel per hour, so a dramatic increase in fuel prices adds up quickly. Three years ago, we rolled out a route efficiency program called RouteSmart.
Over time, we have realized the benefits of this initiative, mainly a reduction in the number of miles driven and lower labor costs. Unfortunately, the rising cost of fuel has outpaced the beneficial savings. Subsequently, we needed to impose a fuel surcharge on some customers.
Banks: We've tried to condense our routes but that hasn't worked out too well. We also thought about taking a truck or two off the road, but it's hard to do as we keep growing. We bought four new fuel-efficient trucks, and we have another new hooklift coming soon. Hopefully we can see about a 4 to 7 percent savings in fuel and maintenance costs with the new equipment.
Wegner: We spent over $200,000 more on fuel last year than was budgeted because of the rising costs. All of our side-loaders have an “operate-in-gear-at-idle” system [that uses a] hydraulic pump to do the work instead of the engine RPM, thereby saving fuel as well as the engine life. We are now buying it for front-loaders also. We saved between 5 and 10 percent of our fuel last year.
Schweizer: We did pass on a fuel charge to the customers. However, we also implemented route optimization software to help maximize route efficiency. In some cases, it can look at five different routes and turn them into four routes. It's not perfect, but it creates the right questions about our routes that we need to be asking.
Pearson: The first six months of fiscal year 2006, the division's fuel cost has run 50 percent over budget. A major change has been reducing idle time by our operators. Also, we constantly evaluate our routing to ensure maximum efficiency to further reduce drive time.
WA: How do you monitor and improve your day-to-day operations?
Schweizer: We maintain daily productivity reports in which we track stops per hour, stops per mile and tons per load. We continually make adjustments to our routes and trucks.
Wegner: We provide lower level supervision by crew chiefs who are responsible for no more than six to eight people/routes. That way, they can [stay] in contact with each of their employees. Our employee committee gives us feedback on issues that we may not think about. We have looked into GPS [global positioning satellite] units, but have not had the funds yet.
Banks: We recently added a GPS and radio system to monitor the routes for all of our trucks. It's so new we can't tell yet how it has helped us out so far, but all of our drivers log the time they come in, the time of their last stop and the time they get to the landfill.
Pearson: In an effort to monitor and improve our day-to-day operations, Solid Waste Services is using the Automatic Vehicle Location [AVL] system [based on GPS technology] on several trucks to monitor and enhance productivity. We are also looking at other routing systems to ensure that we are using the most productive technology for routing. In addition, we utilize a “missed collection” system that is translated into a monitoring listing for use by project managers.
WA: What new regulations have made a significant impact on your business?
Pearson: The major initiative has been to retrofit our collection vehicles with diesel oxidation catalysts, or DOCs. This will reduce carbon dioxide, hydrocarbons and particulate matter by an estimated 28 tons per year, which is quite significant.
Anderson: Regulations have always been a driving force in our industry. Air regulations have impacted the cost of trucks. Landfill regulations have an impact on collection companies. These regulations, like all regulations, cost money. Our sales teams need to educate the customer so that he or she understands that there is a cost associated with regulations.
Wegner: The [federal] Clean Air Act caused the costs of trucks to increase [by] about $4,000 in 2004. It's expected to go up again next year, and again in 2010. We are not in a “non-attainment” area at this time, which requires more stringent environmental rules.
Banks: We've had some trouble keeping up with noise control regulations. Some towns say we can't start our collection routes before 7:00 a.m. We've also switched to the plastic “whisper cans,” which help some, but there's still the noise of the equipment to deal with.
WA: What is the biggest change that has taken place in your operation during the past decade and what changes do you see occurring during the next 10 years?
Pearson: The major change has been a transition from a twice-a-week backyard collection system to a once-a-week automated collection system. In addition, [we have made] the transition to [our] Managed Competition Business Model, wherein we compete against the private sector to retain our collection services. Future changes will be a move to transition from a manual recycling collection to an automatic collection system.
Banks: Last year, we had 107 percent growth in our business. In 2005, we expect to bring that down to about 30 to 40 percent growth, but there's still a big building boom here on the East Coast. All the “boomers” are retiring and are deciding to move out here to Sussex County.
With all of this growth, the landfill [run by the Delaware Solid Waste Authority] will be full in the next 10 years, and we'll have to go to incineration. Recycling will also become mandatory, so we'll have to purchase separate trucks and go door to door with that, too.
Wegner: Technology has continued to make more efficient changes in our industry, [including] computerization in the office and in the truck, [frictionless] braking systems, operate-in-gear-at-idle systems and more efficient hydraulics. The future should bring bio-diesel and natural gas engines to the forefront. Hopefully GPS will become more available, also.
Anderson: This division has been made up of not only internal growth in the marketplace, but also through several large and small acquisitions. Having a large amount of employees under one roof while adding more through acquisitions can be a challenge.
But, at the same time, we must keep an open imagination [by] watching and listening to our fellow employees [and] understanding that there is always a better way to do things when all involved work in harmony.
Schweizer: Single-stream collection and organics will usher a whole new way of thinking about trash. Recycling used to be a nuisance in the beginning, but we're now in our third generation of recycling collection, and we'll continue to pull more out of the waste stream. Right now, we have trash, yard waste and recyclables collection, all in three different carts. Over the next 10 years, I think there will be a slow shift toward collection of just a dry product for recycling and a wet product that will probably be either landfilled or composted.
Randy Woods is a contributing editor based in Seattle.