Lincoln recently became the first city in Nebraska to push for a landfill ban on wasted cardboard, a move that was shot down by the city council who decided the alternative—recycling it –would be too expensive. Lincoln Mayor Chris Beutler called the move, “disappointing, short-sighted and fiscally irresponsible.”
But that story is an extreme example. Recycling of old corrugated cardboard (OCC) remains wildly popular. Recovery rates reached a record high of 92.9 percent in 2015, up from 54.5 percent in 1993, according to the organization Paper Recycles.
Its value is rising too, at least for now. On the West Coast, for example, the price for OCC rose from $120 per ton last spring to about $150 a ton this summer, according to Steve Sutta, CEO of The Sutta Co., a recycling and sustainability firm providing services to corporate clients.
But reclaimers work for their money. For MRFs, particularly, single-stream collection systems often face the problem of elevated contamination rates. Then there are curve balls like last year’s West Coast port strike, where OCC exports took a beating.
Still, there are industry upswings. The material is easily separated and easy to spot, as it’s large and mostly one color. And the end market is large and diverse.
Sutta is making it work; OCC sales comprise close to 75 percent of the company’s business. It sells OCC throughout North America and in all seven continents.
The company does not operate MRFs. Rather than collect and process curbside, Sutta exclusively buys postindustrial OCC. It’s cleaner, and paper mills will pay a premium as they do not have to deal with contaminated glass that plagues residential single streams. Sutta also tries to buy the material segregated, though it purchases some mixed material to pump its volume.
Customer perks to lure the big guys
Sutta offers its customers—large manufacturers and retailers—perks, like setting up compactors and balers on its sites and scheduling pickups to transport the baled recyclables to its facility.
“We are making it. There is cardboard out there. Though there is more money in exports,” says Sutta.
But it’s been a struggle for the industry overall. About 25 percent of the processors nationwide have closed their doors in the past three years, according to Sutta.
“We overcame many of the issues with a narrow focus on cost control and a careful eye on improving productivity,” he says. “But we made hard choices over the past couple of years to stay in business. We consolidated our facilities with competitors to co-share overhead costs. And we eliminated approximately 100 full-time positions.”
Making it cost effective
One way Sutta contains costs is by considering freight and positioning operations near ports to cut shipping costs. But there is no one-size-fits-all plan. For instance processors have to consider where suppliers are located too, says Sutta.
Some of the challenges are harder for MRF operators. For instance as ecommerce booms, more large boxes are showing up at the curb, even refrigerator and furniture boxes. And collection vehicles have a hard time accommodating boxes of those sizes.
MRFs deal with the challenges
MRF operators are doing more hand sorting and investing in screens. Some are starting to look at robotics for many materials to reduce hand sorting and hand picking, says Bill Moore president of Moore & Associates, an Atlanta-based recycling consultant.
It’s been worth MRFs’ while to deal with OCC; the amount of this material that is residentially generated is growing, as is demand. About 13 percent of residential MRF output is OCC today; 15 years ago it was less than 5 percent, Moore says.
Domestic demand is up
The export market is robust, but lately there’s a domestic surge, largely driven by the addition of new recycled fiber-based containerboard capacity, says Hannah Zhao a recovered paper economist at RISI, an organization that provides information about the forest industry.
Though, like all commodities, markets appear to be cyclical.
“Export demand weakened somewhat in 2013-2014 as a result of the drop in Chinese imports. Though in 2015, and this year … exports … picked up when not only China, but other Asian emerging countries increased their purchase from the US,” says Zhao.
Some are thinking as much about sustainability as the bottom line
“The opposition [to Lincoln’s proposed landfill ban] sees how [recovery programs] affect the pocketbook today,” says Frank Uhlarik, Lincoln sustainability and compliance administrator.
“But we see it as we would expand landfill life, add jobs to the recycling sector, and it’s just good for the environment.”