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Recycling law creates cost cutting opportunities for haulers and residents

April 10, 2012

Joe Maier cut his trash-collection fee for hundreds of customers by 20 percent starting last summer while boosting his own revenue by a third, thanks to Delaware’s new recycling law requiring haulers to provide single-stream recycling for all single-family homes.

Maier’s firm, Econo-haul Inc. of Newark, has cut its own cost of dumping trash by 25 percent simply by collecting a lot more recyclables from its customers and taking a lot less waste to the landfill.

The cost reduction prompted the company to make an offer to residential developments where it already had some business: If at least 50 percent of home owners signed up for trash and recycling collection, they would get a 20 percent reduction in their monthly fee.

The result is that residents of Forestbrook Glen in Newport, Beautree in North Wilmington, and three other developments are now paying $20 a month to get their trash picked up, down from $25 until last July. And Econo-haul has boosted its own business by signing up more customers, increasing revenue by around 30 percent compared to a year ago.

“We’ve done extremely well,” Maier said. “We’ve definitely seen savings with recycling.”

Delaware has made a big dent in its trash volume by requiring haulers to provide single-stream recycling for all single-family homes since last September. That means residents have been able to throw glass, most types of plastic containers, paper, metals, and plastic bags into the same container rather than separating them before pickup.

Maier, secretary and treasurer of the 14-truck company, said the lower rates he’s been able to pass on to some of his customers have in part been due to combining trash, recycling and yard-waste pickup into one weekly collection for those communities – enabling him to keep down costs for fuel and labor.

But the biggest cost reduction comes from taking between 21 and 25 percent less trash to the landfill where the tipping fee for haulers is $82 a ton. By contrast, haulers drop recyclables at a state-run transfer station for no charge, or in exchange for a payment that depends on the variable market price of recyclable materials.

Still, haulers’ lower tipping costs don’t necessarily lead to a cut in collection fees because some companies make additional trips to pick up the increased volume of recycling, increasing their costs and in some cases adding to consumers’ fees.

The new system – formally implemented on Sept. 15 but effectively in operation for several months before that – resulted in an immediate increase of 25 to 30 percent in the volume of recycled material, officials found.

Although hard data on the latest increase in recycling rates won’t be available until early next year, anecdotal evidence from haulers indicates the new law has succeeded in persuading most people to keep their recyclables out of the trash can, said Jim Short, an environmental scientist in the Division of Waste and Hazardous Substances at the Department of Natural Resources and Environmental Control.

“These are very respectable numbers,” he said. “This is a significant change in behavior for the State of Delaware and there is still outreach and education to do.”

Short said the state aims for the “diversion rate” from trash to recycling to rise to around 40 percent for single-family homes. Statewide, the recycling rate was 34 percent before the new law went into effect.

The law differs from recycling codes in Pennsylvania and New Jersey in that it places the responsibility for implementation on hauling companies rather than residents, Short said. Violations will result initially in a discussion with the hauler, and subsequent fines of as much as $1,500 a day on a second conviction. No enforcement actions have been taken since the law went into effect, he said.

The single-family changes were the first in a three-stage implementation of the new law. The second phase comes on Jan. 1, 2013 when haulers will have to extend single-stream recycling to multifamily residences. The final phase, for commercial recycling, is effective on Jan.1, 2014. The law aims to boost the statewide recycling rate to 50 percent by 2015 and 60 percent by 2020.

Persuading apartment dwellers to boost their recycling rate will be more complicated than educating single-family homeowners who were approached individually by the hauling companies. In multifamily buildings, trash haulers will be charged with contacting the owner or property management company which will then inform tenants of the new requirement, Short said.

“The education component is all on the property management company,” he said.

It may also be harder for apartment dwellers to accumulate recyclable materials for collection because they have to deposit them in a parking-lot dumpster or put them in a chute, and because apartment buildings typically have more transient populations than single-family communities, Short said.

For the population as a whole, the rule of thumb in the recycling industry is that 80-90 percent of people can be persuaded to put 80-90 percent of their recyclables out for collection, provided they are given the right education, Short said. The remaining 10 percent or so are probably never going to become regular recyclers no matter how hard the authorities try to convert them.

“Ten percent of the people just don’t care, and they are not going to do it,” he said. “It’s unfortunate but it’s the reality. The juice is just not worth the squeeze.”

For haulers, there’s potentially money to be made from the sale of recycled materials.

Some take a bet on getting paid for recycled aluminum, corrugated cardboard or other materials while others simply dump the material without compensation, said Mike Parkowski, Manager of Business and Government Service at the Delaware Solid Waste Authority, a state agency that’s funded by waste-tipping fees.

Co-mingled recyclables collected at a New Castle County transfer station are trucked to Philadelphia or Camden, NJ for sorting. The material is currently sold for $24-$26 a ton. A new recycling facility in Delaware is under construction and is expected to be operational next year.

Trash companies welcome the new law because its statewide standard provides a “level playing field” for haulers, said Tom Houska, Delaware’s senior district manager for the trash giant Waste Management.

Alice Jacobsohn, director of the Maryland Delaware Solid Waste Association, said the industry lobbied for the new law which creates opportunities to open up recycling facilities or deliver to other markets while preventing the Delaware Solid Waste Authority from competing with private haulers.

For some residents, the new law has been a way to save money by shopping around for trash haulers rather than just assuming the monthly fee is a fixed cost.

With companies like Econo-haul touting the increased recycling business, more consumers are paying attention to who picks up their trash, and for how much, according to Parkowski.

He said the trash bill for his own home in New Castle County has dropped to $65 a quarter from $92 a quarter before the recycling law went into effect.

“Trash is like car insurance,” Parkowski said. “People don’t think to shop. If you have the same trash company for 10 or 15 years, you are probably overpaying.”

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