By:
Scott Post
Owner of PW Disposal Service and RPBG Member

 

I have been a member of RPBG since my good friend, Marty Max, talked me into coming to my first meeting at Devon Bank. Before the meeting, I didn’t know what to expect. Afterwards, I was already hooked.

About three years ago, China began to put the brakes on deliveries from outside its borders.

As a trash company that focuses on small owners, I was thrilled to have the opportunity to learn more about your businesses. I believe my company provides better service with the deeper understanding I now have about my customers’ needs. I have also met many wonderful people through RPBG and I am happy to call many of them friends.

I want to shed some light on the current state of recycling, and talk about common issues that RPBG members face when dealing with scavenger services in and around Chicago.

As you may know, the state of recycling in America today is grim. The majority of recycling material that is processed in the US ends up being shipped overseas. For many years, most of this material has gone to China and other foreign countries. This started to change about three years ago when China began to put the brakes on deliveries from outside its borders.

The first step was to mandate quality requirements that proved nearly impossible for recycling processors to meet. This led to an almost complete ban on waste paper, with plastics following suit. Other countries have now followed China’s lead. This is understandable, as the practices used to process these materials bordered on barbaric. If you have ever wondered how all that plastic ended up in the ocean, you need to look no further than these processors.

These changes have led to a collapse in the value of recycled materials. Collection and processing costs now far exceed revenues. This has pushed up the cost of collections to customers, including RPBG members. What was once a very inexpensive service to provide for trash companies like mine now costs almost as much as regular trash removal. Instead of being paid a small amount for delivering recyclable materials to processing facilities, we are now charged close to the same amount per ton as we are for regular garbage. This has created a real crisis for collection services like mine.

These changes have led to a collapse in the value of recycled materials.

The City of Chicago mandates that all businesses, including multi-family buildings, at least offer recycling services to their residents. While their intentions are noble, the cost of providing this service has increased substantially. What was once just a small line item on your monthly invoice has become a big expense. This is all due to changes in the global recycling business.

So, what can we do? The obvious choice would be to process our recycled materials in this country. There are a couple of reasons this won’t work, at least in the short-term. First, we do not have the domestic processing plants to handle the volume of material collected within our borders and it will take years to build them. Even then, recycled material is a commodity. Since supply is high and demand is low, it is hard to see how this will ever be a viable business in this country. In addition, not everyone wants to purchase recycled products.

As demand for recycling has fallen, many scavenger companies have simply raised their rates on collections. They have been banking on the probability that you will just keep paying these increases rather than be the person who comes out against the environment. And you can be sure that they will continue to charge new fees or surcharges to increase their revenues to offset cost increases.

As demand for recycling has fallen, many scavenger companies have simply raised their rates on collections.

I encourage you to review your invoices carefully to see what’s on the bill. Trash companies are notorious for sneaking increases onto the bills of unsuspecting customers. Be vigilant, my friends. Try to educate your residents about how to prepare materials for recycling and what not to put in these bins. No bags and no trash is a good place to start. Trash companies love to hit you with “contamination” charges. I have seen charges that exceed $75 per occurrence. That adds up quickly! Review your invoices for extra charges. Be that customer that calls to complain when these charges appear.

Does your recycling just go to the landfill? The best answer that I can give you is – it depends on which company you are using. I’m happy to answer company-specific questions for anyone who would like to give me a call (773-502-0949). Or just watch where your provider puts your trash. If everything goes into the same truck, you have your answer!

Trash companies are notorious for sneaking increases onto the bills of unsuspecting customers.

These tips also apply to your regular scavenger services. When I began my illustrious trash career back in the early 80’s, there were more than 75 family owned waste removal companies in and around Chicago. The market is now dominated by publicly traded, national conglomerates. Only a few family owned companies like mine remain. This has changed the market considerably and, in my opinion, for the worse. Yesterday’s phone calls and handshakes have been replaced by today’s emails and contracts. While I would never be able to function without technology, I value being able to sit down and talk to my customers directly.

Here is some advice for dealing with your current vendors that I feel strongly about:

Contracts – Beware! Contracts allow the hauler to increase their rates at anytime for any reason. Unless you delete this paragraph from your agreement and note agreed upon annual increases, you will be stuck. Also, watch out for the self-renewable clause. This is designed to keep you captive forever unless you jump through the hoops required to cancel in the allotted timeframe. If you must, and only if you must, sign a one-year, non-renewable, price-set deal.

Extra Yardage Charges – You all know about this one. It’s not unusual for vacating tenants to leave extra garbage in and around the bin when they move out. It doesn’t surprise me when I hear of companies charging more than $40 per yard for this material, the single most lucrative revenue source in the scavenger world. Building owners are held hostage because nobody wants to pay the city fines and waste a day in court. Once again, be vigilant. Require a picture of the extra material. If no picture exists, refuse to pay.

Fees and Surcharges – This is another result of publicly traded conglomerates taking over the market. This is simply a method to increase revenues when the cost of doing business increases.

Environmental Fee – Scavenger companies are always banking on your commitment to the environment. There are no government charges that apply to the collection of this fee. It is 100% pure profit to the company that charges it.

Fuel Surcharge – Fuel costs are a part of our service and should not be your concern. Fuel prices rise and fall on a regular basis. Funny that these surcharges never seem to go down!

Recycling Market Offset Fee – What?? Once again, not your responsibility.

Only a few family owned companies like mine remain. This has changed the market considerably and, in my opinion, for the worse.

I have truly enjoyed my years as a RPBG member. I means a lot to me knowing that my membership fee, sponsorships and donations are used, in part, to improve the lives of children in the community. I am proud of the impact we have all made in Rogers Park.

Please feel free to reach out if you have other questions or concerns. I am happy to help you analyze your program and your costs to ensure that you are getting good service from your provider.