Throughout labor shortages, supply chain issues, and falling commodity prices, the waste and recycling industry has continued to be resilient, facing changing regulations head on, focusing on safety initiatives, and adopting innovative technologies.
Looking back on 2022, what are the significant changes you have seen over the past year in the waste and recycling industry?
David Biderman: I think sharply increasing interest rates will, over time, cause profound changes in the waste and recycling industry in the U.S. and Canada. It is not terribly difficult to run a business if you can borrow money or raise capital at 2 percent. It is a much different business environment when rates are in the 6 to 7 percent range, as they are in early 2023. Both local governments and companies will need to become more efficient operators in this environment.
Another significant change was California’s enactment of several new laws, including SB 54, The Plastic Pollution Prevention and Packaging Producer Responsibility Act. SB 54 establishes a very broad extended producer responsibility (EPR) program in the U.S. California also passed SB 343, Truth in Labeling for Recyclable Materials, and a companion bill about compostable product labeling. These laws will fundamentally change the industry in California over the next few years, and I suspect other states will consider—and likely enact—similar laws in 2023 or 2024.
Finally, the sharp decline in the value of recovered paper and plastic from the elevated late 2021 levels was a significant change, as municipalities and recyclers were forced to adjust to declining markets. This time, it was not due to China and National Sword.
Will Flower: The yearlong fall in commodity prices was a troubling trend for all recyclers in 2022. The words “down dramatically” were much more common in 2022 as the value of newsprint, cardboard, and plastics fell month after month. To make matters worse, fuel prices and energy costs rose contributing to hyperinflation. Ultimately, the industry spent a lot of time throughout 2022 talking with customers and municipalities to explain significant price increases to help cover the rising costs of services.
Rachel Oster: Extended producer responsibility is beginning to shape the landscape of recycling infrastructure more than ever before. With the passing of SB 54 in California and similar legislation in Colorado and Maine, the recycling industry is poised to be one of the key stakeholders in ensuring the success of a circular economy and it shows. The adoption of technology at MRFs to increase data collection and sortation capabilities is partly a reflection of the higher standards and increased requirements on our industry to support the circular economy.
Sean Jennings: By far the most significant change that the waste industry has experienced this past year has been the widespread realizations of inflation. Inflation that has shown itself in major price increases and, in the case of those companies that have not been able to pass on price, bankruptcy, which is highly unusual for the waste industry.
Marc Rogoff: I see many organizations in my area investing in facilities that will ultimately improve their efficiency. Quite a few have constructed transfer stations in the last number of years. These facilities have been designed with a bi-level construction with a tipping floor on the upper level, and a transfer and load-out area on their lower level. This enables that refuse can be loaded into trailers through hoppers in the tipping floor. This model of operation reduces the number of hauls to the landfill or disposal location by a collection truck, thereby reducing manpower and equipment needs. It also enables the community to bypass disposal issues at the landfill. The cost benefit studies for such projects have shown long term efficiencies of such transfer station facilities.
Garbage truck fleets have continued to evolve. Do you believe that more organizations will transition to CNG or electric within the next few years?
WF: The trend toward the broader use of alternative fuels will continue in 2023 and beyond. Currently, there are about 160,000 refuse trucks operating in the U.S. Keep in mind that most of these trucks are powered by diesel fuel. It is important to note that today’s diesel engines are much cleaner and more efficient than diesel engines produced just 10 years earlier. I believe that we will see more vehicles that are electric over time. However, in 2023, electric vehicles for heavy-duty waste collection trucks are still a “work in progress.” Waste collection vehicles consume an enormous amount of energy and powering the units for a 10 plus hour shift is a challenge. However, as batteries improve and electric vehicles become more efficient, we will eventually see electric vehicles become more common. In addition to pure electric propulsion systems, hybrid designs may work well for heavy-duty vehicles and equipment. For example, a relatively small diesel-powered turbine running at a constant speed can turn a generator to produce electricity to power a heavy-duty collection vehicle.
DB: There is growing interest in electric (EV) garbage trucks, and I think more local governments and companies will be piloting and implementing them in the next five to 10 years. There was a lot of interest in EV trucks at WASTECON® in California in December 2022.
RO: More organizations will transition to CNG and electric fleets when it is a requirement in municipal contracts or mandated by state policies. There are still a fair number of challenges related to full fleet transition and it will take time for the infrastructure to be built to support it. The best thing we can do as an industry to support this transition is by setting up the right employee pipeline to drive and maintain these fleets.
SJ: Overall, electric and CNG purchases are still driven by marketing, ESG incentives, and overall contract requirements. I believe that CNG has found its place in offsetting some of the fluctuations in diesel prices, but overall CNG equipment purchases are driven primarily by the above.
MR: I believe the trend is the electrification of collection fleets. More communities are investing in electric vehicles as a way of getting a handle on their fueling needs. A few have developed plans to site EV fueling stations at their WTE facilities, and in this way developing a closed circle. I think many communities will finance pilot programs to test out the first wave of new EV garbage trucks. The expectation is that these electric trucks will have less maintenance. Only time will tell if this is correct.
Labor shortages continue to dominate some of the industry’s headlines. What kind of creative or effective solutions have you seen be used this past year? Do you believe this trend will continue throughout 2023?
SJ: The waste industry labor shortages have been prevalent before the pandemic and the ensuing inflationary period. Solutions for labor shortages have been pushing up wages over the years, continually raising the expectations for a work environment that is less physically intensive, allowing more flexibility on work schedules, and overall creating a more positive and respectful work environment.
WF: Demographic trends in the U.S. would indicate that many industries, including the waste and recycling industry, are going to experience labor shortages for several years. There is stiff competition for employees, especially for drivers with CDLs. Most companies have had to increase driver salaries and benefits to attract and retain employees. Many companies have rolled out aggressive recruitment programs and doubled down on their retention programs to keep good employees. However, the most important thing is not to give people a reason to leave. Instead, focus on creating a great place to work where all employees are appreciated, trusted, and feel safe.
DB: A growing number of local governments and companies are responding to the ongoing labor shortages with new and creative ideas that are helping to address the issue. Some are simply increasing pay or expanding benefits. Others are expanding the pool of employees by encouraging non-traditional workers to apply or offering to train new hires to get a CDL. SWANA’s new Strategic Plan emphasizes the need to make the solid waste industry more attractive as a career choice, and we applaud employers who are doing so.
MR: Some of my firm’s clients are beginning to offer starting bonuses to help attract new drivers. I have seen an attempt to talk up the advantages of working for public agencies such as pensions and the ability to come home every night and not be on the road driving a long-haul vehicle.
How have you seen the industry deal with the supply chain issues, and do you believe it will continue?
WF: We definitely struggled with supply chain issues in 2022. In many cases, we saw a sharp increase in prices for trucks, parts, supplies, and equipment. During the second half of 2022, the supply chain issues seemed to ease; however, vendors are still keeping pricing high, which is requiring our purchasing department to work extra hard to find more cost-effective partners who can provide equipment and supplies at a fair price.
DB: The industry was challenged by supply chain issues in late 2021 and into 2022, though many of the equipment and supply shortages we were hearing about at this time last year don’t exist today. Some companies are purchasing more items, such as tires, in advance, to avoid future supply chain issues and potential price increases.
SJ: Supply chain issues have simply pushed equipment prices up and lowered capacity, which overall has caused consumer prices to rise. We believe bottle necks will continue into 2024.
MR: I have seen some of the equipment, such as containers, migrate from metal to high grade plastics to help reduce the lead time and the cost of these containers. I have also seen some of my clients developing their own welding shops to repair their metal containers rather than purchasing new metal dumpsters.
Do you foresee any other trends that will cause a shift in dynamics?
WF: Bad legislation and over regulation is always a concern. In 2023, we are going to see state and federal legislative bodies focus on climate change, extended producer responsibility, minimum content, and environmental justice. The industry can’t afford to take a “wait and see” approach. Instead, we need to be strong advocates at the state and federal levels to actively promote and shape laws, rules and regulations that protect and preserve the environment while strengthening our industry.
DB: Safety! Safety! Safety! Despite recent improvements in the solid waste industry’s worker fatality and injury rates, we still have way too many collisions and injuries. I am encouraged that solid waste collection is no longer the 5th most dangerous job in the U.S. (the federal government reported in December 2022 that it is the 7th), but this is no time to be taking a victory lap. SWANA will continue its laser focus on safety and will be providing more safety resources and tools to the public and private sectors—in both the U.S. and Canada, in 2023.
We had some big announcements from the EPA in terms of recycling, funding, and PFAS. How will they affect the industry in 2023? How can organizations continue to communicate and educate the public?
DB: SWANA was very pleased that EPA has started the recycling grant application process, and expects the distribution of those funds, starting in late 2023, will provide a useful tailwind for some local governments and recyclers. It would be useful if EPA and other government agencies at the federal and state levels spoke more frequently about the many environmental and economic benefits associated with recycling. Someone pointed out to me recently that EPA is in the mainstream media about recycling only on Earth Day and America Recycles Day.
Regarding PFAS, landfills are evaluating treatment technologies that will reduce the amount of PFAS in leachate. I expect we will hear more about this at our annual technical conference (SOAR) in Atlanta in April and at Waste Expo in New Orleans in May. SWANA will also continue pursuing an exemption for landfills from EPA’s proposed designation of certain PFAS compounds as “hazardous substances” under Superfund. Landfills accepted millions of tons of waste for decades that contained PFAS. Landfills did not manufacture PFAS or use it in products such as clothing or carpets. As passive receivers of these discarded materials, it is simply unfair for them to be punished financially.
WF: Communication and coordination is critical to every new initiative. The public, legislators, and regulators need to understand that managing solid waste and recycling is a complicated process requiring consumers, collectors, recyclers, manufacturers, and brand owners to work together. Unfortunately, when any component of the process is lacking, the initiative will struggle. A perfect example is New York’s Food Donation and Food Scraps Law that took effect on January 1, 2022. The new law requires businesses and institutions that generate an annual average of two tons of wasted food per week or more to donate excess edible food and recycle all remaining food scraps. While carters were ready, willing, and able to roll out collection services for food waste, there was a significant shortfall of composting facilities and digesters on Long Island. As a result, the initiative is struggling to make an impact.
RO: There is a huge amount of funding available to the recycling industry both federally and state by state. Many of these funds are going to support the development of modern infrastructure for both organics and traditional commodities so we can expect to discover which companies are investing in which market areas across the U.S. In terms of educating the public, we definitely have some work to do to combat some of the negative media coverage recycling has received this year. Consumers are confused about how recycling works due to inconsistent product labeling and messaging from brands and non-standardized recycling programs. We need to keep hope in recycling alive by investing more in public marketing campaigns and especially engaging the youth by connecting the act of recycling to an everyday act we can do to help combat climate change.
What are some industry initiatives to keep an eye on for 2023?
SJ: As always, the most impactful way to create positive change for the industry is safety-related initiatives. We are looking forward to onboard accident-avoidance technology improving. This may not be as widely marketable as other initiatives, but anything that directly preserves human life will get the most industry interest.
WF: Many states are facing financial crisis and they are going to try to find additional sources of revenue. Some states, like New York, are talking about garbage taxes, which are extremely regressive taxes on the poor and working class. We also need to address the continuing outbreak of fires in collection trucks, transfer stations, recycling centers, and disposal sites. Fires are occurring with greater frequency, threatening the safety of workers and emergency responders while costing the industry millions of dollars in damage and higher insurance costs. Government must act to force the battery industry to act and address the growing risk of improper disposal of lithium-ion batteries that are threatening our people, trucks, and facilities.
DB: Efforts to reduce contamination in recycling, EV truck pilot programs, and ongoing safety efforts top the list.
What is your take on the BLS safety report that says the industry dropped to 7th most dangerous job? What can the industry do to continue this trend?
DB: SWANA is in the process of evaluating the BLS data and comparing it to our safety data. I’m especially pleased by the fact that the collection worker fatality rate for 2021 declined to its lowest rate in more than a decade. It shows that our collective efforts are starting to pay off. I think that the pandemic helped make front line workers and others more safety conscious, which may have contributed to the improvement. I also think the ongoing industry consolidation, in which large companies with good safety programs often acquire smaller companies that have less rigorous safety standards, plays a role.
WF: No one should be celebrating that we are now the seventh most dangerous job in America. However, we have moved from 5th place to 6th place, to 7th place over the past few years, so a well-deserved tip of the hat to all of our safety professionals who are working to keep our people safe. By and large, companies invest in their safety initiatives. Waste Advantage Magazine and other industry publications promote safety and include monthly columns and stories about safety initiatives. SWANA and the NWRA actively remind their members about the importance of safety. We are heading in the right direction, but still have a long way to go.
MR: Continued education of the public will help reduce accidents between collection vehicles and passenger/commercial vehicles on the nation’s rights-of-way. The public needs to be better informed about the dangers of reckless driving. I would like to see more commercials on TV and social media to better inform the public. Similarly, I believe that more driver education is necessary to get the message across to our drivers.
RO: Autonomizing the most dangerous aspects of the jobs by using technology (i.e., robotic sorting, hydraulic arms on collection vehicles, creating opportunities for remote maintenance and monitoring of assets) and creating training programs will attract a tech-focused employee pool.
What do you think that 2023 will hold for the industry?
MR: I suspect that 2023 will be a year of recession, or at least a small slowdown in the economy. This may be the way that will help get inflation under control. Time will tell if this projection is correct.
WF: A lot depends on the economy. The Federal Reserve has been aggressive in raising interest rates in an attempt to cool off the economy. At the same time, the federal government is spending billions of taxpayer dollars as part of the $1.2 trillion Infrastructure Investment and Jobs Act (also known as the Bipartisan Infrastructure Bill). The impact of these programs on the economy is still unknown. What we know for sure is that inflation is running rampant, and our costs are going up. As a result, municipalities and consumers are going to be paying a lot more for solid waste and recycling services in 2023 and beyond.
DB: I am hopeful that 2023 is our first true “post-COVID” year. How the year goes for the solid waste industry will depend largely on economic factors, and to a lesser extent, the issuance and enforcement of new government laws and regulations. For example, if the unemployment rate rises sharply this year, some of the labor shortage issues that are being experienced will likely decline, and pressure to increase wages may be reduced. The past few years have demonstrated that the solid waste industry is resilient, flexible, and essential, and does a great job managing the more than 300 million tons of municipal solid waste generated by Americans and Canadians each year. I am confident that regardless of the economics, the industry will perform well in 2023. | WA
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