China has been the primary end market for North American sourced MWP for the last twenty years. Secondary markets do exist but there are challenges utilizing these markets during all parts of the year.

Active, viable end markets are critical to the success of any recycling efforts and programs.

The information we receive regarding end markets seems to change day by day. As we receive updates from our marketing partners we are actively making processing changes in the Plants and communicating to our staff and important customers.

There will be significant changes in the recycling supply chain including: upgrades and retro fits to processing plants so that the new contamination standards can be met and increased communication to consumers and customers on what can and cannot be recycled to name but two. These investments (retrofits) will be expensive and will have to be paid for. Other outcomes will certainly become apparent soon. Hindsight would be useful.

Over the years there has been much debate on whether source separation or single stream collection is the right approach. Source separation is more expensive, single stream is easier for the consumer and less expensive. A clean recyclable commodity is at the forefront of everyone’s mind and there is no doubt that source separated materials are cleaner and more useful to and end user.

The recycling industry has experienced several business cycles over the last thirty years. These changes with respect to contamination levels would in our view be the most significant of all the changes experienced and will likely result in significant impact to processing of recyclables in the future.

• A dramatic downward price correction on all grades of Paper and Plastics.
• A dramatic slow down in our throughput and production of our processing plants.
• Increased scrutiny of all inbound deliveries.
• Active communication to all suppliers on any quality issues observed, loads downgraded and fees associated with quality issues passed to the inbound customer.
• Increased labour expense to manually sort materials received.
• Development of new signage for Urban Impact’s collection bins and offered to all suppliers to assist them in communicating contaminants and prohibitive materials to their customers.
• Communication to customers if contaminants are visible at the time of pick up.
• Intensifying the material audit process and frequency of audit

National Sword Long Term impacts

It is of course difficult to accurately state the specific long-term impacts of this type of market disruption will be. We feel that the recycling market can anticipate some long term lasting impacts such as:

• Emphasis on the recycling stock quality
• Re investment into processing plants to improve the mechanical extraction of contaminants to meet the new industry standard of less than .5% contamination of recycled material (current industry acceptable contamination standard is 2%).
• Put it all in a bin (referred to as Single Stream or Mixed Recycling) is an easy collection solution but it is likely not going to be the least expensive when processing fees are calculated.

Thank you for your attention and understanding. We are working hard to ensure that we have active end markets for all grades of material.

This blog post is Urban Impact’s first update on National Sword.

National Sword is the name of the Chinese government’s recent clampdown initiative to clean air, water and land in China.  The Chinese government has targeted waste paper and plastic being shipped into China as they feel that the contaminants in this product are contributing to Chinese environmental issues.  The Chinese government wants recycling material arriving into China to be much cleaner than it has been historically.  Current industry standards are that we are allowed up to 2% contamination in a bale of waste paper.   With National Sword, the currently industry standard is no longer good enough. The Chinese have communicated that they want the level of contamination to drop to 0.3%!

The Chinese government means business – they want clean air, water and land.  Some of the actions that they have taken to try and make improvements in materials quality include:

1. Cancelling importation licences for most agents who move recyclables into China.
2. They have officially stated that Mixed Paper and Mixed Plastics will be banned and not allowed to be imported into China.
3. Active inspections of paper and plastics arriving at Chinese ports.  Loads that are deemed to be greater than 0.3% contamination are being rejected and returned to sender.

Officially the new standard for waste paper comes into effect as of December 31, 2017.

Trade Implications

National Sword is a big deal.  ISRI (Institute of Scrap Recycling Industries), a US based recycling association is taking an active role in communicating with the White House, Chinese officials and the World Trade Organization.  In 2016, US exports of waste paper to China were worth $US 5.6 billion and 40,000 jobs.  China is a vital end market for the US, but for Canada as well.

How are other companies reacting and coping?

We talked to many companies and processors; every one is scrambling to react and to make this new quality specification.  Processing facilities have been designed and built to create product with up to 2% contamination.   A sudden change to this quality allowance is extremely difficult for existing plants to meet.  As Plant Managers and plant staff know, the way Urban Impact has reacted to National Sword is to add labour (Quality Control staff) and to slow down the sorting and baling operations.  Other companies have had to do the same.

There is of course an increased cost; slowing down production and throughput has many implications such as increased unprocessed inventory, plant accumulations and large piles.  The conversations at the conference quickly turned to what capital investments will plants have to make to accommodate this new quality specification.

The export markets such as China are extremely important end markets for recyclables.  The mills in other countries rely on our fibre to create their products such as new cardboard boxes, a variety of packaging and other products.  With China being by far the largest importer of these types of materials, it has created a significant impact on material flow. Urban Impact and others do not exclusively ship into the export market, domestic markets also exist.  The reality is that both export and domestic end markets are needed.

What are the implications if Urban Impact ships materials to China that are over 0.3%?

The Chinese will inspect the contents of the container and reject them if they feel contamination is greater than 0.3%.  The cost of a returned container is approximately $10,000!

If a company ships into China and materials are rejected, this company will be banned for an undisclosed period of time from importing into China.

Key Learnings from the Conference

• The Chinese are serious, this is not a short-term issue.
• The cleanliness of baled material is of critical importance.
• This is a global issue not just Pacific North West.
• Active communication with Urban Impact customers is a vital ingredient to ensure that prohibitive materials are not included in the materials.

Urban Impact will be closely monitoring the direction that China takes regarding recycling and their National Sword policy.

An ongoing issue and challenge for recycling organizations is to produce clean and marketable end products. Contamination can come in many forms. Minimal or eliminated contamination is key to operating any successful recycling operation. As such, Urban Impact has created a series of new signs to minimize contamination during collection.

Prohibitive items include:

Wax cardboard, any organic matter, medical waste, wood, glass, metal or any soft or hard plastics mixed in with the paper grade, plastic strapping, electronic waste.

Below is an example of Urban Impact’s signage:

Urban Impact gives a lot of money to charity – I am pretty proud to tell you.   We give money in three primary ways, they are:

1. Free recycling services for charities
2. Shredathons scheduled in Spring and Fall where we partner with other organizations such as VanCity to provide a service and donate proceeds to their charity of choice
3. Twice monthly Shred Days at our Richmond & Calgary offices, where our staff pick the worth charity to donate the proceeds to.

In May 2016 we will be fundraising for The Arbutus Support Council (a sponsor group including family members of an Urban Impact employee) who has taken on the task of raising money to place and transition a Syrian family to Canada.  They will be supporting the Al Khaleif/El Hama family who are currently living in Lebanon and are originally from an area of Syria near Hama. There are three boys in the family aged 5 months, 2 and 4 years.

During May if you have any materials that need to be shredded, please consider coming to our Richmond location to drop off your materials.  They will be shredded right before your eyes.  All the monies collected for the May Shed Days will be donated to this worthy cause.

May Shred Days are on May 4 and 18th for details and map please see: http://shreddays.urbanimpact.com/ for details.

Thanks for your interest, spread the word and let’s raise some serious $ for this wonderful cause!

(photo credit to www.cbc.ca)

What tools do we have to see how we are doing with respect to both diversion and waste avoidance?

Waste Audits

Waste Audits are an excellent tool to review the composition of what remains in the waste stream after recycling and composting. Urban Impact’s Waste Audits involve taking a representative sample of waste, sorting and categorizing it clearly, taking photographs and recording observations of the waste stream and providing recommendations and goals in terms of additional diversion efforts to be made.  Waste Audits should be done regularly to monitor progress; frequency depends on the size and complexity of the organization and can range from annual to every two to three years.

A Waste Audit clearly identifies what remains in the waste.  This is an excellent and large step in understanding and planning future steps to increase diversion.  We have played an important part in our customers waste diversion goals by providing Waste Audit services. We feel that the Waste Audit is an important first step, but there are additional steps that should be taken to seriously and aggressively move towards zero waste.

Waste Generated per Capita

Organizations often emphasize the volume of material they recycle, while overlooking a potentially more important indicator: Waste Generated per Capita.  The Waste Generated per Capita is a simple division of Total Waste over a specific period divided by the number of full time equivalent staff, residents, students, passengers or otherwise – a number that would have to be calculated or estimated.  Progress of the Waste Generated per Capita indicator should be measured in regular intervals (as is suitable for the organization or location size).  Regular intervals can be as frequently as quarterly but likely best done a yearly basis. Progress on this metric can be well represented by a bar graph – hopefully showing a steeply downward trend!

The Waste Generated per Capita is a very important indication of an organization or location’s remaining waste “problem”.  Things that will decrease the Waste Generated per Capita are obviously the recycling efforts on site, but also thoughtful consumer choices with respect to goods and services that do not contribute to the waste.  Staff or residents increasing the “re-use” of items will contribute significantly to reduced waste, for example not using non-recyclable take out containers, making sure there is no food wastage etc.  A company reviewing their purchasing and supply chain sources is also a key contributor in controlling and reducing the waste created.

Recycling and waste diversion are very important, but even more important is a thoughtful choice of waste avoidance. If we can avoid the waste in the first place – this of course would be the right place to start.

I am not a coffee pod expert, however, there is no doubt they are convenient, have significant consumer appeal, and provide a delicious cup of coffee at a moment’s notice.  Even so, I stand by my quote that was used to finish the article: “I would never allow myself to purchase a single-use product like this,”  “I modify my habits as to not fall into the trap at all.”

Although the Maclean’s article is specifically about coffee pods, there are a multitude of single use containers and packages that make our daily lives much easier and more convenient.  I have previously committed to not purchasing bottled water, I did manage to up hold this commitment for a 10 month period – quite an accomplishment if you consider the number of times you are tempted to run in and grab a bottle of water for a thirsty child or adult while on the road or on the fly.  Although I don’t think I kept it to 0 bottles of water for 2014, I think it was less than a handfull.  I am happy about this and want to continue this commitment.

And how about when you need a middle of the day “pick me up”, only to realize you forgot your travel mug!  If I catch myself needing some caffeine and I have forgotten the travel mug, I have gotten into the habit of asking for a ceramic mug and sitting down to enjoy a waste free coffee!  Quite a novality I might add, and this commitment to reduce single use containers might make me take a moment’s rest during a busy day.  Not a bad way to slow down and enjoy a coffee and reduce waste.

Take-out food is also a huge source of single use containers and waste.  Trying to avoid eating take-out is a great way to reduce waste, and make the right environmental choice.  I try and pack my own lunch, meaning a serious reduction in single use packaging or containers – really a no-brainer from a health, monetary and environmental perspective.

Our lives are so fast and hurried, and single use containers make it easy for us to continue our busy lives at a blistering pace.  Even so, I quite like the thought of slowing it down a bit and taking the time in advance to consider your packaging options.

The focus on the coffee pods is one thing, but there are plenty of other examples of single use containers and packaging that could be avoided to ensure we live a more waste free and sustainable day.

The Vancouver Sun recently published an article by Randy Shore titled Metro Vancouver’s Green Waste Diversion: A Progress Report (available here: http://www.vancouversun.com/technology/Metro+Vancouver+green+waste+diversion+progress+report/9956483/story.html )

According to the article, the total amount of waste produced by single-family homes in Metro Vancouver is down by 66,000 metric tonnes compared to 2011, while region-wide diversion is up from 55% to 58%

This progress comes as no big surprise to those in the waste and recycling industry who have been on the front lines helping to improve current programs and implement new ones in an effort to increase diversion rates. Indeed, I think I can speak for all of us when I say we are ecstatic to now have hard numbers to back up what we have already known for some time.

The numbers also completely invalidate critiques levelled by some that Metro Vancouver is more interested in waste management than waste diversion. The key reason that curbside (and now ICI) organics programs have popped up in the numbers and at the speeds that they have is without question because of Metro’s incoming organics ban (which was prudently announced a few years ago to allow for thoughtful implementation prior to coming into effect). And the organics ban is just one initiative of many that has come/will come from Metro and its member municipalities as part of the effort to get to 70% diversion.

But perhaps most satisfying for me, is that these findings now clearly discredit the arguments recently made by some that diversion has hit a brick wall in Metro Vancouver, and that it is futile to continue pursuing the same tired old methods (namely source-separation) that have clearly run their course. The amazing success of the as yet young single-family organics programs, and the potential of multi-family programs (already in place in some municipalities such as New Westminster, and in pilot stages such as the Trash Talk program in Vancouver – of which my own building was a proud and highly successful participant), are clear evidence that there are still gains to be made that will get us to even the aspirational goal of 80% by 2020, within the existing paradigm.

Stakeholders are concerned that the cost of disposal has increased significantly in the last 10 years, and many are stating that the increases costs over time are too great and are a burden to society, business and others. In our region, regional disposal costs are being estimated to reach $150 per metric tonne in the next few years, and likely closer to $200 per metric tonne in the medium term.

In my view disposal options for our garbage should not be cheap.  The cost of disposal should reflect the true cost to society and the environment.

I have written on this topic before, and find myself once again reflecting, we need to change the direction of the discussions we are having with respect to our garbage.

My beginnings in the recycling or garbage world were steeped in believing that there should be no garbage.  We should behave like nature, and one user should feed off another’s discards.  We need to continue to pursue uses and solutions with our garbage problem, and we also need to place priority on becoming a more thoughtful society by  making reductions in packaging and other services , reuse of materials or goods, re purposing and the list goes on.

If we can continue to focus on reviewing and reducing the garbage we create, then the cost of disposal (regardless of what the disposal option is) will be irrelevant.

Many of our customers are concerned with the cost of garbage in the future, they don’t want it to be a burden on their bottom line in the future.

Our company is trying to guide and coach out customers into looking at their garbage as an opportunity to engage their companies to reduce the waste they create, and to identify the remaining waste and create recycling, reuse or reduction strategies.

If we can continue focus on recycling and reduction, garbage will become a problem of yesterday! This is a dream and a hope, but I really believe it can be reality.

We are still mired in the muck, and are desperately trying to clear the mud off our boots!

The ports are working, sort of.  We have heard very clearly that it is going to take four to six weeks to get the ports working back to normal and there are a variety of reasons for this:  import containers are currently parked in export lanes at the ports (therefore the ports cannot accept any export containers for loading – there is no room), priority is being given to grain and wheat shipments (Prime Minister Harper spoke), the long hard winter has limited the length of the trains taking containers east and west, the import distributors are not removing their cargo (import containers) quickly enough, and the list goes on.

It feels to me, there is always an excuse.

I understand 27 days without truck traffic coming and going from the Lower Mainland ports is a rather large issue and certainly a good excuse.  But quite frankly, prior to the truckers strike, there were other excuses that were given for poor port performance, they included:  the reservations system needs work, ships are late (resulting in bookings being cancelled and reservations having to be re made), wind or weather slowing down port operations, equipment shortages and the list goes on.

I truly don’t want to criticize and be frustrated with port operations.  Frankly, I would prefer to boast about the amazing port infrastructure that our province and private sector has invested in and I would love to show case how BC business is benefiting from our world class port system, how companies such as Urban Impact can flourish because of our access to the export markets around the world.  But I cannot.  I can truly say our business and other exporters in BC are hindered because of all the complexities in dealing with port operations in the Lower Mainland.

The BC government has invested in our roads infrastructure, the South Perimeter Road a super highway that moves trucks from east to west in the most efficient way possible.  I have heard from transport companies, commuters and other businesses – the South Perimeter Road has liberated the movement of freight and trucks in our region.  The sad reality that all the truck traffic may be flowing more freely on the investments we have made in the road infrastructure, but they travel more quickly only to come to an abrupt halt.

The reservations system has needed an overhaul for years.  The port operators each have their own systems.  They have tried to engage feedback on how to improve them, and private enterprise has taken the time to give feedback and suggestions.  To date, nothing has been done, and the same frustrating, non customer friendly system exists and frustrates exporters, truckers, logistics professionals day in and day out.  Let me explain … using a port begins with a Booking (an allowance to move a certain number of freight containers to be delivered to the port), once you have a Booking you must obtain a Reservation at the ports (an assigned time to return a freight container).  Securing a Reservation is a nerve racking experience that includes faithfully sitting at a computer and watching the reservations screen diligently for a reservation time to appear.  Once it becomes apparent, you have to quickly secure that time (before someone else does).  Here is the challenge, when a vessel is delayed and does not arrive at the destined port on the day scheduled, the reservations evaporate, disappear and are lost forever!  The treasured and coveted Reservation, gone.  And the cycle begins again,  once the new arrival date for the ship is confirmed, you are begin the process again from scratch.  I will use one word to describe the logic behind this process:  Ludicrous.

The reason the truckers went on strike, is because quite simply they could not complete enough turns in a day to make a living serving the ports.  In years past, they could complete five to six turns in a day, today one to two if they are likely.  No wonder they are mad, no wonder they went on strike, I would have as well.  This to me should have been another very clear sign to the port operators – the service they are providing is sub par.  Normal businesses once made aware of customer satisfaction would make an effort to improve the customer service experience.  But not our ports, nope.  Instead, they simply blamed the truckers for discounting their rates and deflected from the root of the problem, their operations.

Exporters across the country, have built businesses on moving good and services efficiently and effectively.  The cost of those goods and services has to increase to pay for the delays and time that evaporates in trying to move freight through the ports.  The increased time and efforts include:

1. Increased handling and re handling of      goods that are going to be exported
2. Paperwork and staff time to handle bookings,      reservations
3. Admin costs to follow up and pursue the variety of      obstacles that arise with shipping
4. Alternate freight arrangements for moving freight to      other markets
5. Less $’s for the sale of the good or service in      alternate markets

I can only dream of efficient port operations – it would be an amazing gift to our economy, the consumers and we in the industry might enjoy a bit less grey hair.

In the 5 days since the end of the strike, Urban Impact has managed to ship 11 export containers.  The sight of the first export container at both of our plants was a joyous occassion for staff, but quite frankly the expectations for more shipments were too high.  11 export containers in 5 days … prior to the strike we were shipping 11 export containers before noon.  All of our staff, including of course myself were expecting relief and freight movement more or less immediately. This is not the case.  Reservations for deliverying full containers back to the Lower Mainland ports are not available, essentially putting up a impermeable barrier to ship our product to the export buyers who have purchased it.

Today, I decided to take matters in my own hands.  I phoned TSI the terminal operator at Delta Port and Vanterm. My line of questioning was “what on earth is going on, why are reservations not available for exports?”.  The answer, is sadly “its complicated.”  Here are some of the reasons that exports for Lower Mainland businesses are still weeks away:

• Ships bringing in import cargo continued to drop off during the strike.
• Import containers have accumulated at the ports (Delta Port and Van Term specifically) and are taking up the space or lanes that was previously allocated to export containers (presumably they are stacked and staged prior to loading onto the ship).
• Distribution company’s who would receive these import containers are not removing their containers quickly enough to create room for the export containers.
• Train traffic to load out the imports and carry them east are prioritizing grain shipments over import container movement from the ports, resulting in high inventory of containers on the port property.

In addition to the reasons I was provided above, I was also told (curtly I might add) that if I had issue with this (ie priority being given to the import containers over export containers) then I should discuss this with the Shipping Lines as they are giving the Terminal operators their priority and orders.

This conversation provided a point of extreme clarity for me (clarity that I did not previously have!).  Urban Impact and other exporters are not the customer to the ports.  We are not even on the list of important stakeholders that need to be communicated with and or updated.  The customer to the terminal operator is the Shipping Line (China Shipping, Hapag Lloyd, APL etc), the exporter is the humble customer of the Shipping Line and therefore is of no real importance to the port operator.

Several things became clear to me today, sadly it has taken some time to really understand them:

1. Urban Impact is not the customer to the Ports, so all the complaining we do falls on deaf ears.
2. BC exporters are still weeks away from normal operations.
3. Exports cannot be relied on, we must have the discipline to develop and understand domestic opportunities for our recovered materials.
4. This issue is far more complicated then we all understood.

To me the very simple solution is to concentrate and focus on the terminals providing outstanding customer service to all incoming and outgoing freight.  Their priority should be measuring their performance on all aspects of utilizing their terminals, if we can focus on reducing wait times, improving the reservation system, improving their relationships wiith all important stakeholders, such as the trucking companies, then our ports will be working for our economy.  I recognize that the port operators need a return on their significant investment in infrastructure and capital.  Our priority needs to be on creating a win win for the operators, the economy and exporters accross the country.   Unless we focus on this, I am afraid the situation of stiffled trade will continue, which is a benefit to no one.