Are You too Small to Automate Collections?

If you've been in the solid waste field for more than six months, you know the automated mantra: automation can improve efficiency, increase productivity, reduce disability claims and improve the bottom line.

But since automating isn't free, how are you going to afford this innovation, particularly if you're a small- or medium-sized hauler? And don't forget the fact that competition is rampant and bottom lines are sacred.

In fact, some organizations seem to have advantages over others when financing automation's expense.

For example, municipalities have access to bonding and leasing programs which result in lower financing costs. And, once collection managers of large waste hauling firms justify the automated equipment's capital outlay and positive impact to the bottom line, getting the trucks and carts becomes a matter of phoning the vendors to set up a delivery schedule.

But you're one of the thousands of small- to medium-sized waste firms that provide daily refuse collection services in rural and suburban America. Although automation would help your operation, you don't have access to municipal financing nor do you have a large capital budget account.

Does this mean that your firm must miss the benefits of automation? Not necessarily. While the wholesale conversion of your collection operation may not be practical in a matter of months (especially if it's running more than four route trucks a day), most of the small firms that have automated their fleet have used a combination of creativity, ingenuity and innovation.

Some took several years, completing one route at a time as equipment and resources became available. Others had sympathetic councils that understood the local haulers' concerns and willingly provided access to equipment capital in a public/private partnership. And still more automated by acquiring companies that already were automated.

In almost all cases, these small and medium haulers made the transition to automated collection with satisfying results.

Why Automate? For most small haulers, the decision to automate is the result of one or both of these primary factors: * an existing fleet reaching the end of its useful life and

* a desire to make their operation more cost-effective.

Peninsula Sanitation Service, Long Beach, Wash., took a serious look at automation when it faced rebuilding its collection fleet.

"The style of packer body we used stopped production in '75, and we had to rebuild our old packer bodies to keep them in service," recalls Jay Alexander, Peninsula's manager.

However, eventually Peninsula was forced to change the bodies. "We talked about going to front loads for commercial [customers] and a shoe pack side loader for residential waste," Alexander says. "We were sold on the side loader for residential waste because it was a one-man truck with a cabover cab that you could go out either door. However, a rear loader would be a step backwards in terms of efficiency."

Thus, if Peninsula stayed with manual collection, it would have had to purchase two different types of trucks, plus a spare for each, to serve both commercial and residential customers.

To reduce this cost, the company automated both its commercial and residential collection routes. Automation began in 1990, and the last route was completed in 1997.

"Before [automating], we were picking up our residential collection with manual side-loading garbage trucks, which also took side-load containers from one yard to one-and-a-half yards for commercial accounts," Alexander says. "Now, we serve our commercial accounts with either drop boxes or 350-gallon automated collection trucks."

Peninsula uses Heil Formula 7000 bodies on either Peterbilts or Internationals and Roto carts.

R.C. Miller Refuse Service, Canton, Ohio, was introduced to automation in the early '80s through a local vendor that asked Miller to try out its new side loader.

Like most experimental equipment, there was a learning curve. "The first equipment was a real pain," says R.C. Miller, the company's president. "It was down more than up, but the equipment that we have today is a more maintenance-free."

Miller uses both Pak-Mors and Heils on White Volvos, and although he uses several "orphan" manufactured carts, he primarily uses Toters.

In most smaller refuse operations which rely on manual collection, the workload ramifications on employees have a greater impact than in larger companies. In addition to training new drivers due to attrition, injury claims can wreak havoc with the bottom line.

"We were only getting a couple of years out of our route workers before they had some sort of injury, the majority of which were back injuries," Alexander observes.

"There was a lot of training involved [with manual collection], and it was not a good system for employee longevity," he continues. "We felt that an automated garbage truck would keep people in our employ for a longer period of time and reduce injuries."

Safety considerations also prompted E.J. Harrison & Sons, Ventura, Calif., to automate their collections.

"When California Occupational Safety and Health [Cal OSHA] began talking to us about safety and the different types of injuries that our workers were getting by wrestling these barrels by hand, we knew that sooner or later they were going to tell us that a man couldn't lift over a certain amount of weight by hand," says Ralph Harrison, vice president. "We knew it wouldn't be long before we'd be forced into automation to take this load off the employees."

Harrison runs Amreps on either White Volvos or Peterbilts and uses Toter carts.

While truck replacement and worker issues are the two main impetuses for automation, pressure to boost diversion through more aggressive recycling programs ranks a close third.

For example, Anderson Rubbish, Simi Valley, Calif., believes that California's 50 percent diversion mandate is difficult to attain without automation.

"We had to somehow lower the amount of trash that residents could throw away, and the best way to do that was to automate with no charge to the customer," says James Safe-chuck, vice president.

How to Automate Once a small hauler decides to automate, determining the type of equipment and carts to acquire and how to finance the purchases are the next hurdles. Depending on the features selected, a new automated truck can run between $130,000 to $150,000, while carts average between $40 and $50, depending on size.

A small hauler with 4,000 customers would need one primary truck which could handle 800 stops daily on a five-day schedule and at least 4,000 carts - a total investment of roughly $350,000. Obviously, it's prudent to have a spare available. Purchasing a second truck will boost the investment to around $500,000.

There are many automated cart and truck body manufacturers, and it is important to understand what you need and be comfortable with the vendor prior to purchase. "We knew of four cities and companies in the Northwest that were using automated collection at the time [we were considering switching]," Alexander says. "We were able to learn from them and do quite a bit of research before we made the decision."

Peninsula sampled six to eight different cart brands with specific requirements, including carts that were stable in the wind, before selecting its vendor for both the small carts and the 350-gallon commercial carts.

When Mike Sides of Southside Sanitation, Bakersfield, Calif., was investigating carts, he specifically looked for companies that had strong customer support. "It was important [for the vendor to be] local, so that we could see the carts firsthand," he explains. "We never used carts before, and we were uneasy. From an equipment and mechanic's standpoint, we were facing some major changes for our shop because each generation of trucks is becoming more and more complex.

"We like the 'KISS' principal: Keep it Simple, Stupid," he continues. "Because we work in a dirty environment, electrical systems are more prone to failure than the pneumatics." Southside uses White Volvos and Bridgeport trucks, Heil Rapid Rail bodies and Toter carts. And, recently, Southside purchased automated trucks from Bridgeport Refuse Trucks, Bridgeport, Texas, which emphasizes pneumatics over electronics.

If buying new trucks and carts are too costly for your operation, you can look into used or surplus equipment, where you can find some well-maintained trucks or carts at lower costs.

Municipalities often auction off seven- or eight-year-old trucks with considerable life left in both the chassis and body. You can find good equipment at secondary equipment vendors, as well, but investigate the vendor's reputation before money exchanges hands.

Finally, keep your feelers out for rock-bottom deals. "When a company went out of business in Blackwell, Okla., it alerted me and I went out there and bought 6,000 cans," Miller says.

Despite your method of purchase, finding the financing to automate can be rough on small haulers, especially when it comes to acquiring carts. Trucks are a large, tangible asset which can be used to secure a loan or lease financing, and, in the event of non-payment, can be recovered and resold.

Carts, however, require a large capital expenditure, but individually do not have any tangible value and are difficult to repossess. (Imagine a bank trying to recover 4,000 carts spread out over an entire city.)

This financing problem places small haulers at a considerable disadvantage with their cities, Safechuck says. "Most city councils are not compassionate to haulers. Small haulers need to talk to the council, make them aware of the need to recoup their investments."

In order to automate successfully, small haulers may have to resort to a variety of financial options, including creating a partnership with a municipality. When the city of Bakersfield, Calif., started automating its collection operation, it wanted Southside, as a private hauler operating within the city, to do the same.

"Our contract with the city was specific, and it even addressed future growth and implementation of new systems such as automation," Sides says. At the city's mandate, Southside renegotiated rates, but since Southside's existing collection equipment was not fully depreciated, the company needed a rate higher than the city desired to pay to recapture the equipment's remaining value.

Eventually, the city used money in their enterprise fund to give South-side a low interest rate loan. In turn, Southside gave the city lower residential and commercial rates. "Over time, it's going to pay them back," Sides says. "They got what they wanted, and we could implement automation quickly."

While most banks and financing companies that work with the refuse industry are familiar with automation, small haulers that have done their banking with a local firm may have some initial barriers to overcome.

For example, on Miller's first attempt at financing automation years ago, he approached his banker with information on an automated system and immediately was turned down. "I told him, 'You're kidding me. I've got this equipment ordered, and it's coming in. What's the problem?'" Miller says.

The problem was that the banker had circulated Miller's can literature to his tellers and received negative feedback. "I don't think it's going to work," the banker told Miller.

If this happens to you, first try to educate the banker on how automation will improve your bottom line. If that doesn't work, you might have to turn to a national financing company that works with the refuse industry.

Efficiencies from automation are easy to quantify. "Our routes used to be 200 to 250 customers," Alexander states. "Now they're up to 450 customers with one truck. We've been able to keep our people around longer and collect more customers in a day. I think that automated collection is probably why we've been able to maintain our rates."

When looking into automation, Sides advises that you perform most of your research in your own backyard. "Garbage is so variable," he says. "Since every community is different, you must evaluate the conditions you're working under, the population you're serving and try the best you can to come up with a win-win situation before you make a purchase."

Despite the obstacles faced by the small haulers, Harrison says it's worth it: "Automation will increase your productivity whether you're driving your own truck or hiring drivers. Go for it."

Before rolling out the carts, you first must become "streetwise" to automation's needs: * Curbside Collection. Automated systems operate most efficiently in open, non-restricted environments. Curbside collection generally provides the best access to containers.

* Alley Pickup. Alleys often are unimproved roadways with overgrown vegetation, low-hanging wires and gas meters - factors which pose a threat to equipment and productivity. Consider the costs of alley remediation.

* Volume Control. Automated systems are volume-controlled by default. Containers are not designed to be overfilled, and additional waste must be collected or disposed of separately.

* Parking Ordinances. Areas with significant on-street parking or areas that become highly congested, such as college campuses, can use parking ordinances to accommodate collection. Generally, these areas should be collected early.

* Bulk Collection. Alternate methods of collecting bulk items such as furniture, appliances and yard waste, must be established. In some areas, private enterprise and charities fulfill some of this need. In other cases, second-line equipment is used either on an as-needed or a monthly schedule basis.

* Multi-Family Dwellings. Some of the more contemporary designs provide an outside storage area for each unit. Here, the cart is placed curbside and collected in the same manner as a single-family dwelling. Apartment buildings often centralize the trash collection site. In these cases, 350-gallon carts, which are equivalent to two-yard containers, can be used.

* One-Way Streets. Position all the carts on one side of the street. Alternatives include: run the street against traffic during off hours or send a route foreman out to reposition the carts for collection. Concentrated areas with numbers of one-way streets may find that manual collection is the best solution.

* Crowned Streets and Embankments. Crowned streets tend to orient the truck in such a position that the lift arm must be raised to address a cart within the grip area. Depending on the lift arm's geometry, the gripper angle may be too steep to address the cart. This is especially true in Northern climates with significant snow accumulation.

* Promote Recycling Initiatives. Automation promotes conservation. Communities can provide incentives to divert recycling materials from the waste stream by standardizing the cart size. Excess waste generators then can either pay more to dispose of their waste or opt to recycle more.