(Chelsea Update would like to thank Frank Hammer and the Western Washtenaw Recycling Authority for the information in this column.)
For the next several weeks, Reggie will be explaining the business back-story of recycling, and how it applies to WWRA.
Like many industries, recycling goes through cycles.
Reggie has noticed that in the last few months, several reports have appeared in the popular press about the down-cycle in the recycling industry. (Links at the end of this article are for those who may be interested in detailed explanations of the factors that are causing this.)
Briefly, there are lots of factors contributing to the current down-cycle. Some are international, and not possible to control. For example, Reggie is sure happy about the lower cost of fuel, due to the low cost of a barrel of oil. However, that same low-cost of oil means that recycled plastic is no longer cheaper than new plastic made from cheaper oil. Manufacturers are less motivated to buy recycled.
Similarly, when the dollar gets stronger against other currencies—generally a good thing—that weakens the Chinese market, which buys most recycled plastic, and their yen is worth less.
Another uncontrollable factor is the type of things that are recycled. With the explosion in e-communications there is much less paper and much more plastic, and manufacturers have begun using more plastic and Styrofoam, abandoning glass and cardboard to lower their shipping costs.
Recycled materials are sold by the ton, and a ton of plastic takes a lot more space and requires a lot more handling, both cost items in the budget, than a ton of paper.
Reggie reports that WWRA continues to work to off-set the financial impact of these factors with innovative outreach. For example, WWRA has an arrangement to take about 25 cubic yards a week of trash (the things culled from the recycle stream) to a landfill in Napolean, Mich. They, in turn, bring all their recyclables to us, about 150 cubic yards each week.
We then separate them and resell them on the open market. It’s a win-win for everyone. (Reggie wonders, by the way, if this truck traffic is what one reader recently believed was a truck going to Adrian. We did try the trash-for-trade model there a while back, but it was not cost effective. No trucks go there, now.)
WWRA has also developed contracts with several other Washtenaw county communities that are bringing their recyclables to us. They are charged a non-member fee to cover WWRA’s costs, and then WWRA sells the sorted recycled product. Again, a win-win.
The recycling industry looks forward to moving out of the current slump. Meanwhile, everyone must do their best to maintain viability. Next week, Reggie will explain some more about what each of us can do to help.
Reggie’s Royal Recycling Review: WWRA will weather the current down-cycle, with creative business practices and the help of constituents.
For those who want to read more, click here, here and here.
