Boots (Not) on the Ground

0609earthkeeperh.jpgWe’re hearing more and more discussion of manufacturer responsibility, mostly as it applies to electronics. But what about something as pedestrian (pun slightly intended) as footwear? According to GreenBiz.com, Timberland’s new line of boots — the not-so-subtly-named Earthkeepers 2.0 — are not only made mostly of recycled material (including Green Rubber, which contains 42 percent recycled rubber tires), but also are designed to be reclaimed and disassembled into reusable or recyclable components at the end of their useful life. Certainly beats slinging them over telephone wires!

Memories of WasteExpo

WasteExpo wrapped up less than two weeks ago and I’m still trying to shake the hangover of another spin through Vegas and the sprawling cross section of our industry that the show represents. Here are a few highlights of my WasteExpo experience. Please be sure to comment with a few memories of your own!


The Looooooooooooong Hall


I had forgotten how long the Las Vegas Convention Center is. I was doing okay making my way across the show floor — until I got to the steps and realized I was only halfway through the hall.


Heil’s “Box Booth”


img_0271.JPGWe were impressed by Heil Environmental’s unconventional booth, which at first glance appeared to consist of artfully assembled refrigerator boxes. The company took the “Environmentalists. Every Day” theme of the show to heart. The only promotional materials handed out were impregnated with flower seeds, designed to be planted or composted rather than thrown away. Everything else was displayed and distributed electronically to conserve paper and packaging. The company sent 50 percent less staff to man the booth compared to last year and reduced the amount of equipment on display by 80 percent to conserve resources (and no doubt money) that might otherwise be burned to transport and house them. Perhaps most impressively, nearly every material used in the booth, from the cardboard walls and benches, to the soy-based seating pads, was made from recycled materials and would be reused or recycled again after the show. The only component that could not be recycled — the cushiony artificial turf that lined the floor of the booth — was donated to a Las Vegas school for underprivileged children, for use on their playground.


What Happened Last Night


The staid Inspirational & Awards Breakfast got a welcome jolt when one Driver of the Year honoree, impressed by the number of wives accepting awards on their husbands’ behalf, admitted that he had just gotten hitched the night before. He didn’t appear to be joking (and I later spotted him on the show floor with his blushing bride in tow); truly a man that took full advantage of his Vegas trip. Does the Mack Driving Skills Safety Challenge count as a honeymoon?


img_0272.JPGBruce Parker Tees Up


The Waste Age booth was located next to a vendor hosting a continuous putting contest, which seemed to be quite popular (not least because of the attractive models managing the putters). Even National Solid Wastes Management Association president and CEO Bruce Parker got into the act (he missed).

Rubbish Revolutionaries

Unless you’ve been living under a rock since last Friday, you are aware that there is some serious political unrest in Iran right now. Claims of election tampering (more like outright theft) and worse are flying, and the country is being rocked by massive protests.


It is a common tactic for those loathe to relinquish their grip on power to attribute any criticism to a small group of radicals and/or ivory-tower intellectuals that do not speak for the common man. Such have been the explanations offered by Mahmoud Ahmadinejad and Ayatollah Ali Khamenei, seeking to quell the demonstrations. But their arguments have been undercut by videos like this one, showing orange-suited sanitation workers in Tehran, perhaps the epitome of “the common man,” joining the protests (brooms in hand).

Get It in Writing

img_0270.JPGChris Della Pietra of Potters & Della Pietra LLP led an informative session today titled “Waste Industry Contracts: Practical Advice in Uncertain Times.” Della Pietra went in depth on a range of issues related to successfully crafting and negotiating waste contracts to ensure that both parties are satisfied and protected.


Della Pietra began by emphasizing the importance of considering all aspects of a contract before going into negotiation. “Leverage is best at the outset of a relationship,” he said. All contracts are governed by the universal commercial code. As a general admonition Della Pietra pointed out, “The bigger the contract, the bigger the risk, and the longer the contract, the longer the risk.” Still, he added, “If you’ve got volume, you’ve got leverage.”


From a practical standpoint, Della Pietra recommended that haulers keep contracts to one page (to avoid confusion and prevent complications like a second page being lost through FAX, etc.). After outlining the different types of contracts, Della Pietra noted that it is important to know all the parties involved in a contract, as sometimes the affiliates and subsidiaries involved may not be readily apparent.


A large section of the presentation was devoted to the commercial terms covered in a contract. These were broken out into scope of services and performance obligations, prices and fees, price adjustments, and payment terms. In general, Della Pietra urged that these elements be as specific as possible. Among the tips offered:

• If comments are invited (even before a bid has been accepted), “give yourself a place-holder” in the contract to make necessary changes later.

• Don’t fix rates for more than one or two years.

• Note whether prices in the contract include taxes, fees, etc. Include provisions that allow for flexibility in the event of a substantial rise in fuel prices, new taxes, etc.

• “Cash flow is king.” Net 30 to 45 day payments. Avoid anything over 60 days.

• Consider offering an “early-pay discount” as an incentive.

• If providing services for a municipality, see if they are willing to handle billing. That’s one less headache for your firm.


Next, Della Pietra broke down specific contract provisions, including term of renewal, representations and warranties, indemnification and insurance, damages, non-competition and non-solicitation clauses, environmental provisions and title to waste, and contract termination. Some tips here:

• When setting an effective date with a new business, include a qualifier like “provided it’s no later than” to protect against delay in the business coming online.

• Certain municipalities do not allow contracts longer than one year.

• Haulers should get representations and warranties from the landfill they will be using, lest unforeseen variables place an undue burden on the hauler or its clients.

• A contract should indemnify the other party for your negligence and vice versa. Mutuality should be a given here.

• Non-competition clauses are a fact of life and you may have to live with them, but make sure they are reasonable (e.g., no clause insisting on lifelong non-competition).

• The recession is producing a wider range of force majeure claims, with wild fluctuations in fuel costs and other economic pressures being cited as “acts of God” and justification for vacating or renegotiating a contract — sometimes successfully.

Hedge Your Bets

Although fuel prices declined during last fall and winter, they have been inching back upwards lately. Generally speaking, that trend can be expected to continue in the coming years.


That was a point driven home by Jamey Holland, a risk management consultant for Kansas City, Mo.-based FCStone Trading, during Tuesday’s “Take Charge of Fuel Prices: Effective Risk Management” conference session.


To illustrate his point, Holland cited studies predicting that global energy demand will increase by 44 percent over the next 20 years and that global oil demand will rise to 107 million barrels per day over the next two decades. Global demand is currently around 84 million barrels a day, he said.


Holland also noted that one study projects 2 billion cars to be on the road worldwide in 2030, up from 812 million automobiles just seven years ago.


Toss in the fact that the number of refineries in the United States is declining, and you have a climate ripe for soaring and volatile fuel prices, Holland said.


So, what’s a fleet to do? Hedge, Holland said.


For one thing, fleets should consider buying call options, which function very much like insurance policies, Holland said. “It’s like a policy against higher fuel prices,” he said.


The fleet pays a premium, and if fuel prices rise above a pre-determined level, the increase is covered by the call option. If prices decline, then the fleet purchases gas for a lower price, and there is no claim on the policy, Holland explained.


Other hedging options include purchasing heating oil futures or swaps, Holland added, with the hope that gains in those investments will help offset increased diesel fuel expenditures.

Floor Show

img_0265.JPGIn the Waste Expo exhibit hall, which opened this morning, two overriding influences are apparent: the struggling economy and the green movement. An endless array of environmentally friendly products is on display, and most of the big players are at pains to demonstrate their commitment to green principles. They are catering to an eager throng of attendees looking for ways to attract customers and do business more efficiently in the midst of a recession.


img_0264.JPGLee Lydic, the national fleet development manager for Truck-Lite Co. Inc., a Falconer, N.Y.-based manufacturer and distributor of truck visibility products, is a good example of the type of waste professional walking the floor. Lydic said he had exhibited at past Waste Expos, but couldn’t afford to exhibit in the current economic climate. Nevertheless, he said he was very impressed with the show, noting that he was finding many products worth getting excited about, such as the new LED headlights featured on the trucks Mack was showing at its booth.


“You’ve got the top truck manufacturers, the top body manufacturers and the top container manufacturers,” said Lydic, adding that the quality of the vendors he had met with was high.


img_0252.JPGAmong those exhibitors displaying on the floor is Erie, Pa.-based Eriez Manufacturing, which produces equipment for screening and separating recyclables. Eric Confer, a technical sales rep for Eriez, said that traffic so far was a little slower than in previous years, but that everyone who had stopped by the booth was eager to learn about the company’s products: “We’ll take quality over quantity any day,” said Confer. He also noted a greater interest in recycling this year, with firms looking to add recycling to their operations, or improve the efficiency of existing recycling programs.


img_0259.JPGTerry Creamer of Western Cascade Container, a solid waste container manufacturer based in Kelso, Wa., said he had already seen several interesting products, including a new backing camera, and had spoken to a range of hook-lift manufacturers. This was Creamer’s first time attending the show in 10 years, and he said he was impressed with how far the show had come in that time.


The exhibit hall will be open 10:00 – 5:00 on Wednesday and 10:00 – 1:00 on Thursday.

I Want to Be Seen in Green

img_0236.JPGThe “Getting Credit for Green Initiatives” session on Monday afternoon featured three speakers from Georgia-based waste companies that had real-world experience in helping companies “green” their image or had earned their own reputation as green firms. The session kicked off with William “Dolph” Winders of Atlanta-based Balch & Bingham, a legal firm specializing in environmental issues. Winders set the tone, pointing out that “going green” improves public perception and is just good business. Citing Dupont, WalMart, and Hewlett-Packard as part of the 10 percent of Fortune 500 companies that understand this metric, he emphasized that green is not a color that is going to go out of style.


“He who controls the youth controls the future,” said Winders, pointing out that schools and universities are the greenest places in the United States. “Green is cool in school. And in 10 to 15 years, those students are going to be your customers.”


Among the ways Winders suggested waste companies could go green were:

• creating conservation easements and wetlands

• earning LEED certification for buildings

• converting fleets to biodiesel

• pursuing landfill-gas-to-energy projects

• redeveloping brown fields

• food waste composting

• purchasing carbon offsets


Winders also added that “new ideas get the most green press,” citing as examples bioreactors, plasma arc technology and the Valero project, which will produce gasoline from municipal solid waste (MSW).


Timothy Lesko of Greenco, Norcross, Ga., the leading organic recycling company in the Southeast, talked about sustainability and the challenges of establishing organics recycling programs. After pointing out that organics are far and away the biggest component of MSW, he said successful composting programs will handle not only traditional organics (paper, cardboard) but also nontraditional organics, like yard waste and food waste (food waste being the largest portion of MSW entering landfills).


Lesko said composting is a compelling green initiative because it fits “the three ‘R’s.” It REDUCES the amount of waste going to landfills, REUSES organic waste as compost and RECYCLES waste into new products.


Speaking more broadly, he advised waste companies to adhere to “the three ‘C’s” for getting credit:

• CLARITY in advertising green efforts.

• CREDIBILITY when making claims of green initiatives.

• CONSISTENCY in building a story with facts and stimulating repetitions to make them memorable.


The final speaker, Ernest Kaufman of Greenfirst, Canton, Ga., detailed the ongoing development of the Turkey Run Landfill, which will be the closest landfill to downtown Atlanta. It’s the first landfill project to be permitted in Georgia in almost 10 years. Understandably, the project features several innovative green aspects, including substantial mitigation of the Blue Creek Basin, which involves restoring and relocating large sections of a stream that runs through the site and supplies a nearby town with water. Additionally, half-mile green buffer zones and an on-site industrial park will ensure that no residential development occurs adjacent to the landfill.


The completed facility will accept 3,000 tons per day and total permitted volume is 31,189,847 cubic yards. Notably, the site will accept no out-of-state waste (a first in Georgia), nor will it accept sewage sludge.


“Green development of landfills is NOT a ‘dead cost,’” concluded Kaufman.

Before Death, Let Us Part

In today’s troubled economy, companies are holding onto equipment longer and delaying the purchase of new devices. However, keeping equipment too long is an almost surefire to spend too much money, Dave Dawson, CEO of Houston-based AssetNation, told attendees of a WasteExpo conference session on Monday.


Dawson’s remarks came during the “Leveraging End-of-Life Assets to Improve Cash Flow in a Struggling Economy” session. His company has sold more than $1 billion in assets on behalf of Fortune 1000 companies.


Noting the intention of some waste haulers to drive their trucks “until the wheels fall off,” Dawson said such an ownership strategy can be financially harmful as maintenance costs soar and the re-sale value of the equipment plummets.


“There is really a better way to manage the end-of-life asset,” Dawson said. “At some point, it costs more to maintain than the monthly cost of new equipment.”


Larger fleets often go about answering the question “When is it time to trade out my equipment?” in a “very programmatic way,” Dawson added.


These larger companies keep an eagle eye on life cycle costs - carefully keeping track of acquisition costs, maintenance expenses, the costs of idle equipment, risk-management expenses and disposal/exit costs - to best calculate the right time to get rid of a piece of equipment.


For an asset management program that seeks to get rid of equipment at the right time to be successful, the following dynamics need to be in place, according to Dawson:


* The program must be a strategic priority.

* The program must have an executive sponsor.

* It needs to be rolled out uniformly across a company.

* It requires ongoing management and reinforcement.

* The program must have the ability to measure progress toward financial goals.

* And, it requires frequent communication across multiple levels of a company.


However, even if you do drive your truck “until the wheels fall off,” you will still likely find a buyer of some sort, Dawson added.

On the Ground

las-vegas-convention-center.jpgThe Waste Age team is on the ground in Las Vegas, seeing all there is to see at Waste Expo 2009. As attendees file in from all corners of the country (and beyond), the show is already running apace. Though the show floor does not open until tomorrow, today was filled with a slate of informative sessions that seemed to generate a lot of excitement.


Everyone’s getting ready for the welcome reception at the Paris Las Vegas this evening. We’ll be updating the blog as often as we can. Tell us what you’d like to see and we’ll do our best to bring it to you!

A Picture Is Worth 1,000 Regrets

anp-5605840112.jpgYesterday, I stumbled across this shocking and disheartening collection of photos that show the very real consequences of pollution and irresponsible waste handling. They’re hard to shake. It would be easy to seek comfort by assuming that scenes like this are not possible in this country, and for the most part, that’s true. But that strikes me as a cop out.


The fact is, much of the material depicted in these faraway lands originated in or passed through the United States. And it is U.S.-based companies that deliver and heavily market these products (and product containers) overseas without providing any method for reclamation or helping to provide for proper disposal. There’s no escaping our complicity in what is an environmental and human tragedy.

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The Heap is a blog featuring waste industry news and analysis written by the staff of Waste Age magazine and guest commentators.

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