As a national recycling leader, 4G has endured the challenges from the changing commodities market to COVID-19, while building important symbiotic relationships with the clients and markets that they serve.
The Kirstein family’s recycling roots began in 1910 as United Paper and Metal. United Paper was founded by Philip Kirstein with a horse and wagon. His son Abraham (second generation) took over the reins just before World War II. Abraham ran the company in Connecticut until 1974 when the third generation, Harold, became President. Harold expanded the company’s footprint to become a national recycling leader with state-of-the-art HRB balers installed at recycling plants in several states. Harold ran the company from that point on until 2008, when it merged with Greenstar Recycling, an international recycling company based in Dublin, Ireland. The Kirsteins kept the company stock active so the company’s legacy continued without interruption. Brent and Zack worked with Greenstar in leadership roles for more than three years. Then, they formed 4G Recycling on a leap of faith and the rest is history.
4G Recycling (Deerfield Beach, FL) was incorporated in 2012 and currently has 27 employees and 10 outside sales consultants. 4G Recycling purchases cardboard, news, hard white, SBS, coated book, PET, HDPE, UBC and many other grades of recyclables. They also offer trash services, pallet sales and equipment leasing programs, however, their forte has always been the purchase of pulp substitutes, de-ink grades and plastics, and they are proud to be the largest buyer of envelope waste in North America.
4G Recycling services clients in 48 states and internationally. While they export recyclables to 12 international countries on any given month, a large percentage of their sales are to domestic consumers. “We recognize the important symbiotic relationship with American industries and provide a variety of recycling mills and other consumers with the products they need to keep their businesses running,” says Zachary Kirstein, Vice President of 4G Recycling.
Current Trends
Kirstein says that COVID-19 has had an interesting impact on the recycling industry in general. “In March, as COVID began to spread, the shortages in paper and panic buying by consumers resulted in commodity pricing increasing by upwards of 300 percent—short term. In many cases, this was related to toilet paper and tissue demand—a direct by-product of printing paper scrap recyclables.” Additionally, cardboard demand increased substantially with the significant shift towards online retail. 4G Recycling has been fortunate to stay ahead of the curve, first by getting essential vendor letters from clients across the country and secondly by being able to pivot Customer Service and Finance team members to working remotely. These specific actions helped as it enabled them to operate without interruption and meet customers’ demanding service needs. By moving to remote locations for most corporate functions, 4G Recycling set up a dynamic that allowed them to keep everyone employed in a safe and comfortable manner without sacrificing the customer service the brand is synonymous with.
The sales side of 4G Recycling’s business, which historically was always grown through face-to-face meetings, has also shifted more to video conferences, e-mail communications and conference calls. Despite the impact of the pandemic on overall recycling tonnages, the company has actually experienced a 10 percent increase in sales in 2020. “This dynamic is a testament to the value that the 4G Recycling program provides for clients as we’re now selling more on price in addition to our traditional value-added service model,” says Kirstein. “4G has also partnered with our ERP software provider Cietrade to automate additional in-house tasks to streamline workflows. We implemented one solution called a service macro, which has increased the efficiency of our logistics and billing team by upwards of 50 percent. We’re still in phase one of the project, but feel confident the benefits of the automation will help make the customer service experience of working with 4G more user friendly.”
Commodity Challenges
Overall, for the recycling sector, 2019 was a tough year due primarily to China dramatically slowing the purchase of most U.S. recyclables. Additionally, the price of pulp hitting near record lows and inconsistent buying was a perfect storm. As a result of these market dynamics, the commodity value of recyclables hit all-time lows in almost every category. Some industry publications reported upwards of 20 percent of recyclers in the U.S. were on the verge of going out of business last year. Despite the challenges, 4G’s strong partnerships and strategically located warehouses allowed them to continue moving customers’ recycling materials, regardless of market conditions. That responsiveness positioned the company well and helped them access new contracts in many locations.
Kirstein points out that commodity marketing has been a challenge for the industry over the past two years. “Identifying the best end-users for recyclables and maintaining steady movement remains priority #1 and 4G is actively considering rolling out its proprietary bidding platform across their entire business.”
4G Recycling developed its bidding platform RecyclingBid.com in response to the shortcomings of existing bidding platforms that are not recycling-focused or offer overpriced models. By contrast, 4G’s software was designed with the recycling industry in mind and for their beta test client, 4G increased their annual revenue by $1.5 million.
Long term, 4G Recycling plans to grow its platform technology and potentially sell/license it to other recyclers in 2021. In simple terms, this bidding program allows any large generator of wastepaper (i.e, a grocery chain) to get real-time bids for their waste from viable purchasers around the world who have gone through background checks and have provided movement guarantees.
Zachary also stresses that one of the primary challenges today is the marketing of office paper and de-ink grades. The majority of sorted office paper, coated book, plastic window envelope and printed SBS goes into away-from-home tissue manufacturing. Due to the reductions in the travel industry related to COVID, there has been a substantial reduction in mill demand for high-grade wastepaper. Additionally, pulp is readily available below $500/ton, so mills have less incentive to use recyclable paper.
He also notes another key challenge has been trucking and freight increases. “We have seen regular freight lanes pricing go up by 200 percent or more in some markets due to shortages and high demand. 4G has faced this challenge head-on where possible by expanding markets worldwide. We’ve always honored our commitments to existing mills and most buyers recognize that loyalty. We believe this has given us an edge when it comes to getting purchase orders and support from our partners.”
The same goes for 4G Recycling’s trucking partners. Their team remains loyal to a select number of responsible trucking firms and is committed to building those relationships. “Our truckers have responded by getting us competitive rates and of importance; they give 4G priority when dispatching,” says Kirstein.
4G offers onsite training and recycling education for prospective clients. They visit production facilities and formalize strategic recycling partnerships. This typically includes process improvement, training, signage and other forms of support. 4G also purchases and leases equipment to streamline a client’s material handling. Safety being a key driver in their business, 4G Recycling provides many tools including safe loading patterns and real-time feedback to help clients and drivers.
Strong Partnerships
4G Recycling’s unique business model has propelled their company growth. 4G was named the fastest growing recycler in the state of Florida for 2019 by Inc. Magazine. Currently, they are in the final development phase of their custom-built customer relationship management system (www.RecyclingCRM.com). “We noticed that the CRM tools currently available in the market were not built with the recycling industry in mind, leaving gaps and hindering business opportunities,” says Zachary. “Selling recyclables is not like selling other products. For every new partnership, a recycling company forms, tons of materials that would otherwise end up in a landfill are collected and shipped to be remade into something new. The purpose of the software is to consolidate as much critical business information as possible in-house. Our intention for 2021 is to potentially white label the software to other recyclers.” 4G Recycling will be going live companywide with the platform in Q4 of 2020 to further streamline business processes.
“Strong partnerships and strategically located warehouses have enabled 4G Recycling to contract and market more than 450,000 tons per year of recyclables that are generated by 450 client locations,” says Zachary, “We continue to move material despite industry transitions, challenges and trucking shortages. We have quickly become one of the fastest growing recyclers in America. We want to continue to shine for our clients and appreciate building on our families’ recycling legacy.” | WA
For more information visit https://4grecycling.com.