From challenges in staffing, operations, recycling and supply chains, to dealing with a continuing pandemic, the waste and recycling industry has continued to perservere, adjusting and scaling operations as needed to remain as efficient as possible.
Looking back on 2021, what are the significant changes you have seen over the past year in the waste and recycling industry?
Will Flower: As we look in the rear-view mirror, we wave goodbye to a year that many of us are glad to put behind us. The pandemic continued to present numerous challenges, drove up costs, affected our workforce and disrupted waste flows. Supply chain issues affected deliveries and upset international shipments. However, there were some bright spots including a strong rise in commodity pricing, which benefitted recycling operations as the value for certain recyclables, such as natural HDPE, increased to record levels.
David Biderman: Over the past year, the acceleration of mergers and acquisitions was the most significant change in the waste and recycling industry. Major private companies such as E.L. Harvey and Peoria Disposal were purchased and dozens of other deals took place.
John Paglia, III: There was a tightening of supply and increased demand of just about anything related to the industry: staffing, equipment, containers, etc. Anything you needed to keep your business running became that much harder to obtain in a timely and efficient manner. Last year, no doubt, became a year of pulling strings on developed relationships to receive equipment paramount to keep your business growing.
Paul Ross: We鈥檝e seen a lot of changes in operations and staffing for many businesses in the industry, like with many other industries. New methods have been implemented to maintain employee satisfaction as well as new strategies to handle increased costs in labor and equipment. This is definitely something we鈥檒l see carried over into 2022. Additionally, there have also been changes in sustainable innovations, like in policy and technology. This industry is always growing and learning, and that has been no exception in 2021.
Sean Jennings: Our industry has been challenged with labor for years, but the pandemic has pushed businesses to a point where they must rethink their strategy. Customers are more willing to pay higher rates for quality service and haulers must adapt or be left in the past. Another significant change to the industry over the past year was the increased interest in the waste and recycling industry by more equity firms.
How did COVID continue to affect the industry in 2021? Do you think that it will have a large impact on the industry in 2022, especially with the
variants?
WF: The coronavirus pandemic continued to affect all businesses in 2021. Many commercial operations struggled. Restaurants fought to stay open while many large office buildings remained empty as people worked from home. The waste flow from restaurants, schools, office buildings and businesses slowed during the pandemic. In terms of the impact on the waste and recycling industry, it is clear that we are incredibly resilient. We adjust and scale our operations as needed to remain as efficient as possible. Over the past two years, we have proven鈥攄ay in and day out鈥攚e provide an essential service. The entire industry does an outstanding job in managing society鈥檚 waste.
DB: COVID affected operations daily throughout the U.S. Whether it was the early 2021 surge in fatalities, the Delta variant this past summer, or the emergence of Omicron in December, solid waste companies and local governments had to respond to staffing issues, supply chain problems and operational changes on a regular basis. Prioritizing the waste and recycling industry for vaccines was a top SWANA priority in early 2021, and employers then needed to convince their workers to get vaccinated. COVID will continue to have a major impact on the industry in 2022. Some employers will likely have trouble with staffing, leading to collection delays and suspension of some services. The supply chain issues are unlikely to resolve themselves until mid-year at the earliest. Residential waste will continue to run at higher than 鈥渘ormal鈥� levels as some people continue to work from home鈥攑erhaps permanently. The economic recovery in 2021 included both a substantial increase in the cost of fuel and a big rise in the value of recyclables. Whether those continue into 2022 is difficult to predict.
JP3: You better stay light on your feet and adapt to what you feel is best for yourself, your team and your customers. I think it鈥檚 a fair statement that even the best medical teams have yet to figure out the best defense. With that said, handling the basics of proper hygiene, rest, recouperation, social distancing, washing of hands more regularly, daily cleaning of trucks, are all habits that were formed and will continue now as daily practice. The industry has pushed and will continue to push automated collection where possible. Not only is it becoming near impossible to find readily and willing labor to perform the manual services, but it is also proven to be more efficient and safer for the employees who are collecting trash automated versus manual. I always joke that a cart, container, or clam truck cannot file a workers compensation claim or call out sick. There is unmeasurable opportunistic savings in converting accounts from traditional manual to automated that I debate offset the automation upfront cost. Getting the equipment in a timely manner has been the challenging part and I see no change into 2022. You are lucky to place orders now and receive them in 12 months (2023). We are all forced to forecast even further than we ever had, attempting to find our own crystal ball of predicted equipment needs 18 to 24 months away.
PR: COVID was and continues to be a challenging time for all of us. It鈥檚 been hard for businesses to deal with changes in operations and staffing. However, overall, COVID has shown how strong we are because of how much we鈥檝e had to do to overcome from it. We need to keep pushing forward, keep working efficiently and keep doing what we can to protect our staff.
SJ: COVID has been a continual distraction and bottleneck mostly showing itself as staffing shortages. Hauling companies have been challenged to be able to take advantage of the business that the current economic growth brings. The cost to provide service has gone up and will continue to go up and
customers will value quality service more than in the past. Hopefully, variants will be less disruptive as more people are vaccinated or have antibodies.
Marc Rogoff: The U.S. has surpassed more than 50 million infections from SarS-CoV-2, a.k.a Covid-19, and more than 800,000 deaths. Globally, cases have risen to 300 million and 5.5 million deaths. A rollout of several vaccines was developed in record time at the end of 2020, with now more than 65 percent of the country 12 years or older with at least one dose of the vaccines. However, distribution and challenges became evident, and the U.S. fell short of its goal of providing an initial dose of the vaccines to 70 percent of all adults by July 4, 2021. A new, more contagious strain of COVID-19 initially identified in England and India, called the Delta variant, became the most prominent recent infection wave throughout the country, and had a very significant impact in the Sunbelt states with low vaccination rates. Several states like Alaska, Idaho and Montana have implemented 鈥渞ationing of care鈥� in their hospitals due to overloaded emergency rooms and ICU beds, as these states deal with unprecedented spikes in cases of COVID-19, primarily from unvaccinated residents. 2021 variants continued to cause disruptions due to workforce illness or isolation from exposure to variants such as Delta and Omicron. Also, in 2022, supply chain issues, inflation and consumption will continue to see enormous volatility; COVID will not end; adaptation is still required. Variants are always real threats to the industry.
Beyond the continuing issues with COVID, what are some important ongoing concerns and challenges currently and how can they be addressed? What are some industry initiatives to keep an eye on for 2022?
WF: In our business, nothing is more concerning than safety. Our people and our assets must be protected. Fires in collection trucks, transfer stations, recycling centers and disposal sites 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. The battery industry must act to address the growing risk of improper disposal of lithium-ion batteries that threatens to destroy vital infrastructure. As an industry, we need to be better advocates at the state and Federal levels to promote laws that protect and preserve the environment while strengthening our industry. Specifically, we need to advocate for and actively shape legislation and regulation on
climate change, extended producer responsibility, requirements for minimum content and environmental justice. Finally, we should watch the roll out of the $1.2 trillion Bipartisan Infrastructure that invests in strengthening of the nation鈥檚 infrastructure. Thus far, the amount of federal dollars earmarked for recycling is extremely disappointing.
DB: The labor shortage that many solid waste employers experienced in 2021 will not go away. Workers, and especially drivers, are at a premium. Companies and agencies will need to offer competitive salaries to recruit and retain them. There is a lot of competition for CDL drivers. An important SWANA initiative is safety. This is not a new area for SWANA, and the improvement in the industry鈥檚 safety performance over the past few years demonstrates that our efforts are making a difference. We launched a new safety newsletter in early 2021, which was well-received, and will be rolling out new safety initiatives in 2022. Other organizations in the solid waste industry are also active in this space, and we look forward to collaborating with them.
A regulatory issue to keep an eye on is PFAS and, in particular, EPA鈥檚 proposal to designate certain PFAS compounds as hazardous substances under the federal Superfund statute known as CERCLA. This could have significant operational and cost implications for landfills and may result in fewer options of leachate disposal and higher tipping fees. EPA intends to propose two PFAS compounds in Spring 2022 and to finalize the designation by Fall 2023, under its new Strategic Roadmap. SWANA spoke with EPA about this in December 2021 and will be having additional meetings with top agency officials in early 2022.
JP3: The reality is our industry cannot be successful without equipment and people. Our leadership team from its roots have always preached 鈥淭EAM鈥� as one of the pillars of our success. I call success when I see our team members growing their lives. Countless examples of having someone join our family (Florida Express Environmental or United American Recycling) are getting engaged, married, starting a family, looking to purchase their first home, bringing their first child into the world, developing a savings and retirement plan, etc. I am proud to have developed a culture that allows this growth to become a reality. I constantly am tweaking our benefits to make sure everyone is treated as an equal. The same health benefits our CEO has, so does our entry level team member. We are men and women of faith; what good is it to have biased success? One of our founding principles is to treat others how you wish to be treated. At Florida Express, we don鈥檛 broadcast all of these acts of kindness to be politically correct, we find if someone wants to join a real team, they look us up but must be ready to contribute. We want everyone to always act and perform professionally. Then, when life throws you a curve ball, know our team will have your back and assist anywhere possible. Some of the top initiatives of the industry that I predict we will continue to see for 2022 are to defeat supply chain issues on equipment, increase attraction and training of talent, and improve and evolve the way you communicate with your customers because service delays are inevitable. Getting a clear message out that is fact based appears better than just an excuse for poor service. Ultimately, no one wants to hear about the labor pains, they want the service they pay for preformed.
PR: Fires have been an ongoing issue for a lot of companies in this industry. From dumpster fires to truck fires to MRF fires, it鈥檚 an issue that needs to be addressed with an increase in education for the public and an increase in quality technology to prevent such disasters. The improper disposal of lithium-ion batteries, for example, is one of the main causes of these fires. We need to address this with the public to stop the careless disposal of items like these. Some other industry initiatives we can keep an eye on this year are increased costs from suppliers and vendors, and changes in employee wages.
SJ: It certainly is difficult to look past the challenges that COVID has created. Beyond this, we can look forward to alternative fuel vehicles and vehicles with more safety features.
MR: I believe two big issues such as labor shortages and new equipment/replacement parts will continue in 2022. Not unlike other industries, COVID-19 impacted the solid waste industry hard with delayed collection services or the temporary suspension of recycling, yard waste or bulky waste pickup in some
cities and backups at scale houses and MRF facilities, exacerbated by outbreaks among drivers and other workers. For example, at the peak of the pandemic, 20 percent of the New York Department of Sanitation workforce was out, with at least eight deaths in its ranks. These challenges came as collectors had to deal with a greater volume of trash from residences, including all of the disposable masks, gloves, restaurant takeout waste, online packaging wastes, bulky wastes and wastes from home construction projects undertaken by residents who had more time at home to begin new projects.
The City of Philadelphia reported a 30 percent increase in curbside collection volumes. All of these waste volume increases caused collection routes to be overwhelmed with drivers heading to a disposal facility earlier, prolonging the shifts in an understaffed situation. Late or missed pickups have lit up local TV and social media with mountains of complaints. Layered onto the pandemic staffing issues is a growing national shortage of commercially licensed drivers, straining the ability of municipalities and haulers to keep up with the trash and recyclables pickup.
The COVID-19 pandemic has posed significant challenges to supply chains globally. Multiple local and regional lockdowns continue to slow or temporarily stop the flow of raw materials and finished goods, disrupting manufacturing. Last year, there were some 65 cargo ships that were forced to queue outside the Ports of New York, Los Angeles and Long Beach (more than 40 percent of the cargo containers entering the U.S.) due to surging demand for imports as the U.S. economy reopened. Waste haulers and solid waste directors who attempted to order a new garbage truck, metal dumpster or roll-off learned that COVID-related backlogs made timely delivery of a new refuse vehicle nearly impossible. Truck manufacturers, garbage chassis companies and virtually the entire supply chain are experiencing unprecedented backlogs, resulting in delivery time frames that can exceed eight to 12 months or more. The expectation by most observers is that total truck production over the next few years will be cut. To compound matters, garbage truck and body manufacturers have been forced to prioritize the fulfillment of contractual obligations to large accounts, pushing new or smaller hauler orders even farther down the production line. This trend is likely to continue unabated in 2022. According to the job search site Indeed, there were 12 million open job postings in the U.S. At the end of December 2021, work stoppages, over pay and benefits made the news in San Diego and Orange County, CA, and many counties and municipalities are losing workers to employers who have already adjusted pay within the marketplace. We would expect there to be significant upward pressure on pay and benefits for employees at all ranks in 2022, which will, in turn, require reassessment of fees for services.
How do you think mergers and acquisitions will play out in 2022?
WF: In general, seller expectations are high. Today, the share price of publicly traded companies are high. Companies are enjoying strong and predictable cash flows and can use cash to drive down debt, participate in share repurchase, return dividends to owners or buy companies. I think the preferred use of cash in 2022 will be to invest in strategic 鈥渢uck-in鈥� type transactions that are immediately accretive to a company鈥檚 earnings. It is important to remember that any changes to tax codes will have an impact on M&A activity in 2022.
DB: I expect the level of mergers and acquisitions to decline somewhat in 2022. Some of the deals in 2021 were driven by an expectation that capital gains rates would be increasing. Now that that is off the table, one of the motivating factors for companies to sell has gone away. However, both the national companies and several large independents are seeking to grow through M&A, and I expect to see many deals in the coming year.
JP3: Mergers and acquisitions in our industry will always happen. The reasons they happen may change, but it鈥檚 the cycle of our business. We see well run operations selling for all time high multiples and may see others not go so high. It all depends on the details of the deal between the buyer and seller. A seller may just luck out because the buyer really wants to be in a certain market; meanwhile, on the other hand, a buyer may luck out on a seller who is tired of dealing with the challenges and just wants to take his chips off the table and wait on the sidelines. There are many companies making significant acquisitions that seem like one right after another. You can only give kudos to them, to continue to grow with all of the challenges that are facing the industry. No matter what, large or small, the industry is in the same boat with many of the same challenges facing all of us.
PR: We鈥檝e seen a lot of small haulers merge with bigger companies. Business costs are rising. And with sickness numbers and injuries rising too, it can be hard on these smaller companies to keep their business going. It takes a lot of time and money some smaller companies just don鈥檛 have.
SJ: M&A will continue to be active in 2022 as there is interest from more equity groups. They will follow the model of multiple roll ups and an eventual sale.
MR: There has been an increase in mergers and acquisitions over the past 18 months, with both large companies and private equity firms purchasing solid waste companies. Waste Management鈥檚 late 2020 purchase of Advanced Disposal, which at the time was the fourth largest solid waste company in the U.S., with well over $1 billion in annual revenue, resulted in a cascade of additional transactions. Concerned about monopolization in certain markets, the Justice department conditioned WM鈥檚 acquisition on its divesting of certain assets in about a dozen markets. GFL, which purchased WCA (itself the 10th largest solid waste company in the country), in late 2020, acquired the divested assets. Subsequently, it has sold some of those assets to Noble Environmental, a growing PA-based company. GFL has also sold some of the assets in the Midwest to LRS (formerly Lakeshore Recycling Systems). LRS has grown rapidly in recent years, including a string of acquisitions this last year. In addition, several of the leading family-owned, privately held companies in the industry have been sold. In New England, E.L. Harvey & Sons, inc., the largest private company in the region, was acquired by Waste Connections; in the Midwest, Peoria Disposal was purchased by GFL in September 2021. Both companies had at least three generations of family members who had worked for them. Although there is often a healthy amount of transactional activity in the solid waste industry, the current uptick in acquisitions is noteworthy. It is likely being caused by a number of factors, including: (1) high valuation of the assets due to multiple potential purchases, (2) low interest rates, which make it less expensive to borrow money to buy other companies, (3) pandemic fatigue, (4) expectations that capital gains tax rates will be increasing soon and (5) lack of a successor in the family to run the business. I expect a high level of acquisitions activity to continue through 2022.
We have seen recycling programs stop and re-start this year and more collection points open versus keeping curbside collection programs running. How does the future of recycling look?
WF: Recycling operations proved to be a financial bright spot for many MRF operators in 2021. Keep in mind that over the past three years there was a massive effort to upgrade recycling centers across the U.S. I think recycling will continue to be strong in 2022 as operators are working to produce quality recyclables. As an industry, we should be pushing for minimum content legislation at the federal and state level to strengthen markets for recyclables and advance recycling in 2022 and beyond.
DB: The future of recycling in the U.S. is much brighter at the start of 2022 than it has been for years. A lot of new facilities are opening that are looking to source discarded paper. This continued to the increase in prices in 2021. The consumer-facing brands are increasingly committing to using post-consumer recycled content in their products and containers. EPA issued a National Recycling Strategy in November 2021 and Congress passed an Infrastructure Bill that provides hundreds of millions of dollars in grant funding for recycling. SWANA supported the inclusion of recycling provisions in the Infrastructure Bill and is working with EPA to expedite the disbursal of the funds and will work with EPA and other recycling stakeholders to help implement the Strategy. Finally, the passage of EPR laws in Maine and Oregon were noteworthy and other states are likely to consider similar bills.
JP3: Recycling will evolve with society. As mandates and bills are passed making recycling a requirement, companies will evolve that have adapted to better process a certain commodity. I have always had the stance that in order for recycling to be successful in North America, it cannot be a one size fits all method. The single-stream concept caused the largest disruption to the recycling industry. The sooner we realize single-stream recycling was not a cure all to promote and increase recycling efforts, we will be in a better place. I encourage you to identify what stream can be sorted at the source and push that. It is a lot easier to do this on commercial and industrial lines, but I do see this starting to appear in residential contracts. It鈥檚 important to remember that nothing needs to be set in stone, contracts can be amended when markets change, but it is encouraging to see haulers who know the industry pushing back on municipalities trying to force them to collect a list of 25+ items in a single stream method.
PR: The future of recycling is promising. But in order to keep recycling sustainable for communities, we have to find reliable end-users to create new products for the materials being recycled. Communities also must be willing to pay for haulers to pick up, process and transport these materials. If we can follow that model, recycling programs will continue to thrive in our communities.
SJ: Recycling programs that have been suspended or canceled is purely due to labor shortages caused by the pandemic or unsustainably low pricing. Recycling will increase and at increasingly responsible and sustainable pricing regardless of the commodity market. Recycling will continue to increase in volume and increase in rates.
MR: There are some bright spots to the COVID-19 pandemic. Sellers of recyclable materials have continued to enjoy strong markets over the last year with most grades of fiber, plastics and metals seeing markedly higher average commodity prices. The largest publicly traded haulers in North America鈥擟asella, GFL, Republic, Waste Connections and Waste Management鈥攁ll recently reported double-digit increases in recycling revenues during the second quarter of 2021. For example, Waste Management reported receiving an average of $100 a ton for recovered commodities during the second quarter of 2021, up from $57 a ton a year earlier. The value of discarded cardboard, a significant component of what is processed at a MRF, has increased from about $30 per ton in early 2020 to more than $150 in Fall 2021. Most of the MRFs that suspended operations due to labor shortages earlier in the pandemic have reopened. We recently conducted a 10-year compilation of recyclables pricing/revenues per ton on an 鈥渁pples-to-apples鈥� comparison. To reduce labor costs and produce cleaner bales of recyclables, a growing number of companies are investing in extensive renovations of some facilities, installing optical sorters and employing artificial intelligence (AI). There is also a move afoot by private haulers to 鈥渄e-risk鈥� their recycling business by shifting to a 鈥渇ee-for-service model鈥�, which has helped lift their operating margins and created a more sustainable business model. Further, recovered fiber and plastic exports to India, Thailand and Vietnam have increased significantly during 2021 and development of new U.S.-based markets have helped temper the impact of China鈥檚 national Sword import restrictions.
California鈥檚 SB 1383 Organics Law went into effect January 1. How long do you think it will take haulers/recyclers and communities to adjust to this change? What are some of the steps you think they need to take to make it successful? Do you see something similar happening in other states in the near future?
WF: On one hand, states would like to mandate food waste recovery. On the other hand, states should be sensitive to the financial challenges facing restaurants in the wake of the pandemic. In New York, the Food Donation and Food Scraps Law 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 must donate excess edible food and recycle all remaining food scraps if they are within 25 miles of an organics recycler (composting facility, anaerobic digester, etc.). While carters are ready, willing and able to roll out collection services for food waste, there is a significant shortfall of composting facilities and digesters that can accept food waste for disposal. New York needs to concentrate on developing infrastructure for food waste because right now we can collect it, but there is not sufficient
capacity to manage the food waste we collect.
JP3: I question though, what has a bigger carbon footprint negative effect. The food waste left alone in the waste stream, or now running separate trucks and collection routes for this stream alone 鈥� more trucks on the road, burning some type of fuel (even electric) oils, etc. We need to always go back to the practicality and ask ourselves what problem we are trying to solve and how do we best get there. It will never be the cheapest option, but I want us always insisting change that gives longevity to the world and challenges innovation to keep us evolving for the better.
PR: Methane reduction laws and targets are nothing new to the waste industry. California鈥檚 SB 1383 Organics Law creates an opportunity for innovation and free enterprise to shine.
Education is a big step in this process. We have to educate people and create opportunities for alternative disposal methods that reduce or eliminate the impact methane has on the environment. Since 2013, American Waste Control鈥檚 renewable energy landfill, American Environmental Landfill, has been a part of the EPA鈥檚 Landfill Methane Outreach Program (LMOP). The landfill uses the landfill gas as a clean and beneficial energy source to the grid in Osage County in Oklahoma. This greatly reduces, on a voluntary basis, any methane emissions from our landfill. The opportunity is there for other states to implement ways to decrease methane emissions. And policy and education are great ways to start.
SJ: I think that communities will have to get used to the new, higher rates for existing levels of service before they can accept the astronomical costs that would be required for the addition of organics collection. More communities around the country will begin to ask for this service in their RFPs, but will likely be dissuaded due to the cost.
MR: Californians rang in the New Year with this groundbreaking law dealing with organics. The law will require residents and businesses to separate their green waste from typical other trash. While other states like Florida have enacted separate collection of yard waste from municipal solid waste, this statute, in my opinion, goes above and beyond these requirements. CalRecyle, the state agency overseeing the implementation, will have to roll out the program incrementally by 2024. Hopefully, public education will be a major focus to help overcome the 鈥渋ck鈥� factor for residential waste collection. It will certainly kickstart efforts at composting centers or anaerobic digestion facilities statewide.
On a similar note, Washington State implemented reducing the use of single-use utensils, straws and condiments on January 1. Do you see other states following suit?
WF: I think the trend will continue. Many local governments and states have implemented bans on bags, straws, foam containers and single use plastics. If legislators really want to help, they should focus on actively promoting and fostering the development of markets for recyclables.
DB: Bans on single use plastics are not new, and I would not be surprised if other states passed similar laws seeking to reduce their use.
JP3: I do like what was done here. I believe it is one of our highest duties to integrate sustainable ideas that can be carried out into becoming normalcy. I have been saying for quite some time, we need to fix the problem at the source. We as haulers habitually seem to be reactive to decision makers, instead of positively influencing change that really makes sense for the greater good of all.
PR: I think it鈥檚 a great and prudent idea to not hand out these single-use items unless requested by the customer. This can significantly reduce waste disposal. Other ideas I鈥檝e seen to reduce single-use plastics are innovations like Sharina Perry with Oklahoma-based Utopia Plastix, who鈥檚 developed a plant-based replacement to petroleum plastics. Their resin is absolutely amazing!
SJ: There have been multiple communities that have voted to ban single use plastic, and this may be the way to get the states鈥� attention and eventually into law.
MR: This law the State of Washington enacted last April is perhaps one of the strongest recycling policies in the nation. It requires increased recycled content in plastic beverage containers, trash bags and bottles for household and personal care products; a ban expanded polystyrene food ware, recreational coolers and packing peanuts; and requires that utensils, straws, cup lids and condiments only be provided to customers on request. This legislation builds on a bill championed by the State Legislature enacted in 2020 that banned thin plastic carry-out bags and required that thicker plastic bags consist of 40 percent post-consumer recycled content. It is hard to say if other states will consider similar legislation.
Over the last year staffing issues have been more in the spotlight than usual鈥攆rom shortages to monetary incentives. Do you believe this trend will continue throughout 2022?
DB: Yes, solid waste employers will need to pay fair market wages to successfully recruit and retain drivers and other front-line personnel in 2022 and beyond.
JP3: The years of 2020 and 2021 gave me a personal perspective on my life as I thought I knew it. I had a renewed appreciation for life, like all of us. I did not skip a chance to tell someone I appreciated or cared for them. I did not pass an opportunity to tell someone I was here for them if they needed me and felt
honored when someone would call for help and I was able to help them. I lost a few close friends to COVID, or what we can call COVID-related. I had close family members and myself struggle with health problems. Thankfully, we all came out on the winning side. I believe that the biggest trend I have come to accept is the push for quality of life. Garbage men are notorious for being worker bees; it鈥檚 in our blood. When and if we do take time off, we find ourselves still talking trash. There is nothing wrong with this. What I will encourage you to do is to stop and enjoy the simple things of life. I encourage you to put the phone down and take up a hobby or two. Whether you do it with friends or family, live and enjoy that moment for what it is. Do not be the person videotaping and posting every second of this to get a reaction on your social media from a total stranger. Live every day like it was your last with people you care about, and you cannot go wrong. Carry this same place into your work culture. When at work and clocked in, it鈥檚 important to focus on the task at hand 100 percent. As soon as the workday is over, push your team to play hard responsibly as well, because, ultimately, life really is too short, and we are not promised tomorrow. I realized that during 2020/2021 I was in the process of continuing to evolve our culture to reflect this.
PR: I do think this trend will continue into 2022. But additionally, I think we will also continue to see more creative solutions to retain employees鈥攍ike educational opportunities, professional development, retention bonuses and more. Waste workers are the salt of the earth, hardest working folks and they should berewarded for the exceptional work they do.
SJ: I believe that there will continue to be labor shortages through 2022 and beyond. Wages will not be able to increase quickly enough due to the long-term contracts with restrictive CPI language that are associated with a large portion of our industry鈥檚 customers.
MR: Yes, the staffing issue will continue in 2022. Hiring and retention programs will continue to evolve and cause the industry to adapt. Many agencies are including hiring incentives and outreach to potential hires, including veterans and high school students.
Some of the big words were DEI (diversity, equity and inclusion), supply chains, shortages, sustainable solutions, environmental justice, etc. How do you think these will become more ingrained in the waste and recycling industry? Do you think it will cause a shift in dynamics?
WF: I do not think we get the credit we deserve. We are the most sustainable industry in the U.S. We are the drivers of recycling, and we successfully manage society鈥檚 waste day-after-day, after day. We do it effectively and efficiently. So, when it comes to offering sustainable solutions, who鈥檚 better than us? I think that important issues like environmental justice need to be addressed. EJ issues are not new to our industry. The smart people and the successful companies are those who recognize the right of all people to participate in public decisions and encourage open communications with the communities. If you want to survive and succeed, you need to engage with and support the communities in which you operate.
JP3: We need to continue to be the catalyst for change. Take the time to reflect from a different vantage point often. Sometimes a fresh look at something and challenging yourself to see if there is a better way to do things compared to the way you have always done things is great. Pushing innovation is key.
PR: The waste industry has always been extremely diverse and inclusive. The industry is broad, which calls for people from different backgrounds and skill sets. Increasing workplace diversity will only lead to less shortages, ideas for more sustainable solutions and more people in this industry helping us fight for environmental justice. As this year progresses, we will likely see more attention driven towards topics like these.
SJ: Each of these will continue to take a bigger role in our industry and will, ultimately, add costs to services. The most immediate that we are experiencing is supply chain and labor shortage challenges and those will reflect on our business in higher prices to attract new labor to the industry and make up for
inefficiencies. As far as ESG and DEI, our service costs will increase due to reporting and legal costs to report what is most likely already being done.
What is your take on the BLS safety report that came out at the end of 2021?
DB: The BLS鈥檚 December 2021 report demonstrates that the industry is making progress on improving its safety performance and reducing the frequency of worker fatalities. However, going from being the 5th most dangerous job in America to 6th isn鈥檛 something to celebrate. SWANA鈥檚 2021 data suggests that
continued progress was made over the past year.
In addition, the BLS injury and illness report, which was issued in November 2021, during WASTECON, also revealed fewer injuries to collection workers. SWANA expects this trend will continue and we will expand our safety resources and initiatives in 2022. Later this year, I expect SWANA鈥檚 new Strategic Plan will include safety as a key component, reflecting our greater dedication to keeping the hard-working men and women of this great industry safe and healthy.
JP3: While it is a step in the right direction and nothing wrong with the way it is trending, I still would like us to never be satisfied and continue working harder every second of the day鈥� 100 percent participation, 100 percent focus, 100 percent of the time, no excuses. Hold people accountable, do not turn a blind eye to anything related to negatively affecting your safety program. Constantly review what you are doing and continue to evolve the program. Day by day the world around us becomes more unsafe, therefore its our job, duty and requirement above all to be more defensive than you were yesterday. We are, ultimately, talking about people鈥檚 lives lost; one loss is too many! Increase your communication and your training. Get back to face-to-face and stop hiding behind e-mails and letters. Face-to-face encourages dialogue and we all win with improved communication and safety. With a staffing shortage and a wider acceptance of candidates for all positions with generally less experience, its more important than ever to focus on the basics every day, otherwise this curve will spike in the wrong direction very quickly.
PR: It鈥檚 important to acknowledge the decrease in safety-related cases reported in 2020. But until the number of workplace incidents, accidents and fatalities is zero, our industry should never be satisfied. We have a responsibility to keep our employees safe. Safety shouldn鈥檛 just be mandated鈥攊t has to be who we are.
MR: Another bright spot resulting from the pandemic has been an improvement in the solid waste industry鈥檚 overall safety performance. Solid waste collection has been the fifth or sixth most dangerous occupation in the U.S. in recent years, according to the federal Bureau of labor Statistics (BLS). However, data collected by SWANA suggests a decline in 2020 in the frequency of workplace fatalities in the industry, and that decline has continued into 2021. There continues to be an elevated number of accidents involving third-party vehicles. The BLS released its report on occupational fatalities for 2020 in December 2021, and SWANA evaluated the data and issued a summary/analysis.
Another safety issue that is receiving increased industry attention in recent years has been the increase in fires at recycling facilities. According to one estimate, there is about one fire every day at a U.S. recycling facility. Many industry experts point to the proliferation of lithium-ion batteries as the culprit, although other flammable materials in the waste stream, including propane tanks, are also contributing to these fires. EPA issued a report in July 2021 on the proliferation of fires in waste management and recycling facilities that has (pardon the pun) added fuel to the fire.
What do you think that 2022 will hold for the industry?
WF: I鈥檓 an optimist. I know we provide a basic, essential service and I know society values the services we provide. Waste generation rates are increasing so there will be a strong demand for our services including recycling. I predict that we will see per capita waste generation rates increase to about 4.8 to 5 pounds per person by 2025. My only reservation about 2022 is inflation. The Federal Reserve appears to be aggressively working to control inflation with several moves in place to tame the beast. We should all be hoping it is successful in their quest. If not, all bets are off for a bright 2022.
DB: There will be a lot of unanticipated developments, as there have been since the pandemic started in early 2020. The waste and recycling industry is remarkably resilient, and I am confident that it will overcome any obstacles and continue鈥攚ith SWANA鈥檚 assistance鈥攖o provide Americans and Canadians with cost-effective and environmentally protective waste collection, processing and disposal services.
JP3: The garbage men always prevail. We are there as an essential workforce that is finally being recognized as so. The industry will have its immediate challenges as our vendors play catch up due to supply chain struggles. With creativity and a push for self-educating current and future staff, I hope labor will start to trend in a positive direction. Automation across the industry will help the labor struggle as well. Rather than making excuses, I like to see challenging situations yield to become opportunity for change. We have projects we are working on currently that I would be honored to be labeled as industry changing.
Only time will tell as I鈥檓 quickly learning, turning an idea into a reality does not and will not happen as fast as I would like it to. I predict 2022 to be unfortunately similar to 2021, but like always we will emerge better and stronger than previous versions of ourselves.
SJ: Higher prices!
MR: The COVID-19 pandemic brought sweeping changes to the U.S., including impacts to the solid waste industry, which was designated as an essential industry and continued to work during the crisis. For some haulers and cities, it has been a time for reinvestment and taking steps to make things work better or to try to create change for the better in the future. If ever there was a time to improve resiliency in solid waste systems, the time is now. Due to climate change, there will be more flooding, stronger and more frequent storms, and more extreme heat. I believe that the solid waste industry will be up to these challenges.
PR: Our industry is going to shine this year! We鈥檝e got a lot of innovations coming in safety and efficiency specifically. Most importantly, we鈥檙e going to keep doing this job with dedication and compassion, and with people coming together and helping one another. | WA
Labor Perspectives
Len Christopher
The big labor story in 2021 was wages鈥攏ot just upward pressure on wages, but also changes in the expectations of job seekers. Throughout the year, supplemental unemployment income paid people $18 to $20/hour in some states. That shaped candidates鈥� expectations about what they could expect to earn when they rejoined the labor force. Those notions, combined with inflationary pressure, made it challenging to find $13/hour workers.
One way we overcame wage pressure in 2021 was by using market-specific analyses to gauge wage trends, then working with our customers to set appropriate, competitive wages market-by-market and site-by-site. In addition, we saw positive results with our employees by cautiously layering-on incentives like sign-on and retention bonuses in markets with low candidate pipelines.
Of course, any labor conversation must include the ongoing impacts of COVID. Like other employers, we worked diligently in 2021 to minimize and mitigate COVID-related operational impacts so customers could continue to run their businesses and achieve their operating and financial goals. We also closely followed CDC guidelines and adopted very stringent and appropriate COVID protocols to keep our employees and customers safe. These protocols continue to evolve as we learn more about the variants.
Looking ahead, we are optimistic about the recycling industry in 2022 and expect ongoing growth and consolidation as the economy continues to rebound. We believe labor issues will remain throughout 2022, but not to the degree they did in 2021. As supplemental unemployment benefits continue to taper off, we believe wage pressure will begin to level out. We don鈥檛 see wages dropping, but we don鈥檛 expect to see continued or accelerated upward pressure either.
We also foresee a continuation of 2021鈥檚 recruiting challenges across the industry, with more entry level job openings than there are people willing to take them. That鈥檚 why Leadpoint鈥檚 retention and career pathing initiatives are central strategies for the year ahead, opening doors to advancement and upward mobility for employees in our business. Recruiting and retaining a stable workforce will continue to be a crucial imperative in 2022. We see a red flag for the industry鈥檚 workforce when recycling programs start and stop, whether on the collection side or when adding shifts to an existing MRF operation. When programs stop, the workforce leaves. When they re-start, those trained employees have moved, which creates hiring, safety and financial risk for operators.
M&A activity can also create labor chaos for MRF operators. We expect to work with more customers in 2022 who need help integrating acquired companies and teams quickly and realizing growth expectations with minimal disruption. For example, we are talking with one recycling company that had more than 20 acquisitions 2021 and have turned to Leadpoint for workforce and consulting support.
Quality control and contamination will continue to be a focus area for the recycling industry and for the MRF labor force. Our managers and employees must maintain a relentless attention to quality and double-down on efforts to produce a cleaner product as markets become more stringent. Additional training, reducing turnover and enhancing managers鈥� leadership skills will all factor into this effort in 2022.
We also expect to see continued strength in communities鈥� environmental ethos, with a growing consumer-driven willingness to recycle and pay for more curbside recycling programs. For the labor force, this opens opportunities to work in new areas like cart tagging programs. The industry will require people to work in education and communication roles to interface with residents and ensure the success of these programs.
In summary, we believe labor challenges will continue to add complexity within the recycling industry, requiring companies to face operating pressures on many fronts. It will take collaboration and coordination, and working with partners, to create capability and peace of mind that will keep the industry moving forward in 2022 and beyond.
Len Christopher is Leadpoint鈥檚 Chief Operating Officer. In this role, he inspires the company鈥檚 onsite performance managers to improve the productivity, efficiency and profitability of every client鈥檚 operation through Leadpoint鈥檚 high-performance work teams. He also directs Leadpoint鈥檚 customer service and satisfaction efforts. Len has spent his career in the recycling industry. Over the last 20-plus years, he has developed the systems, recycling processes, strategies and capabilities of some of the country鈥檚 most successful recycling operations. He can be reached at (602) 431-0410, e-mail [email protected] or visit .