What can be done in the future to maximize efficiency and reduce collection costs?

By Amy Sorkin

Ours is a competitive industry. Not only do the municipalities and private collection companies compete with each other for efficiency and price, but stockholders add to the pressure as well. The introduction of automation in the last 35 years has no doubt made positive “lifestyle” and economic impacts on collection, and that’s something to be proud of. However, collection is still the biggest expense and therefore obstacle to deal with in the quest for reducing municipal solid waste costs in general.

Automation, Please
The experts seem to agree: Continuing to become automated is probably the most important thing that can be done to drastically reduce collection costs. It greatly cuts insurance costs, shaves the number of employees, increases route and operation efficiency, reduces employee turnover, and allows for better customer service. So we know the answer. Getting there, however, is the more challenging part of the equation. In short, it’s expensive, the switchover takes time, and there’s often resistance to the newer technology from cities.

RouteSmart software can help enhance collection vehicle efficiency.

“It’s a big investment to go automated. It really is,” starts Steve Clarke, president of Clarke Waste Systems Inc. in Pompano Beach, FL. “If cities take a look at the reduction in workers’ comp claims, they’ll realize that people are the biggest cost. So when a city starts reducing its workforce and dramatically lowers its workers’ comp claims, absenteeism goes down and it streamlines the operation.”

“Automation can solve a lot of problems,” says Phil Allen, president of Elliott Equipment Co. in Davenport, IA, “but cities are tasked with all these other things they have to provide and all of a sudden you throw in several million dollars’ worth of carts and trucks.” It’s not typically a shift that most cities can make quickly and easily.

For those cities that can’t afford full automation off the bat (which is most), many begin introducing it in bite-sized nuggets. A lot of people don’t realize how expensive carts are—they average at about $45 each. For a community of 15,000 to 20,000 homes, that adds up to about $675,000 to $900,000. So carts are often brought in incrementally. For instance, a city may start one quarter of a town off with carts one year, then the next year add them to another quarter, and so on. “They often start with semi-automated rear- or sideloaders. Then once carts are in place and the initial expense of buying them has softened by a year or two, they bring in full-automated trucks,” says Allen.

“Manual collection remains popular in large cities with vehicular congestion and limited storage facilities for containers,” says Skip Berg, business development manager at Labrie Equipment Ltd., a manufacturer of collection and recycling bodies. “That’s why you’ll see more automation in spread-out cities, such as in certain parts of Arizona or in Los Angeles, which is now completely automated.”

“Rearloaders won’t be phased out completely,” adds Clarke. “That’s because there are some jobs only a rearloader can do, such as bulk pickup—couches, hot-water heaters, things like that. Rearloaders will still have a place but are quickly becoming phased out and obsolete in terms of normal garbage collection.”

Because automated machines are not yet the norm, the process of selling them to cities is more challenging than selling the familiar, manually operated equipment. “Automation in the garbage industry starts from the top down,” explains Allen. “So when we introduce the concept in a city, we talk to the mayor, or maybe the public works city council committee, instead of the department heads of the people using the equipment. We might bring a cart to a meeting and explain the reasons why they should be looking at them.” In other words, the concept of automation, not just the equipment it entails, has to be sold.

Another obstacle to overcome, when selling automation, is the ugly truth that to implement it, a city or company will have to reduce employees. “If you address this at the operational level, there will be a great deal of resistance because these people don’t want employees to lose their jobs,” says Allen. However, he points out that there are ways to introduce automation while keeping the number of jobs lost to a bare minimum—and cities need to be made aware of this. “For instance,” says Allen, “people can be eased into [working for the] street department instead of sanitation. There’s also normal attrition for retirement. It isn’t always a brutal job-chopping type of situation. And the advantages for a city are great: a reduction in workforce, a reduction in workers’ comp claims, and generally speaking, the productivity is increased.”

In some ways automation can even help a worker maintain his job over time. Manual loading is hard work. Realistically, you can’t expect someone who started when he was 23 to be able to do the same work at 53, but often the 53-year-old isn’t yet ready to retire. Automation can ensure that he will still be able to do his job well as he ages. “And these trucks are actually kind of fun for the operator,” says Clarke. “They can sit in their air-conditioned space with the stereo going and pick up garbage, and in a lot of cases never get out of the vehicle.” This, of course, makes treacherous summer or winter weather a lot more manageable, not to mention that workers can, in some cases, reduce their route time by as much as two to three hours—often meaning they get to go home earlier.

“Going automated is absolutely the number-one thing that can be done to seriously reduce costs,” says Ron Proto of Proto Consulting, a consulting group in Castro Valley, CA, that specializes in all facets of operation in collection and transfer. “But not for the immediate future. It takes years to get the benefits. It’s done more for the two- to three-year total cost savings.”

“If a city can’t afford it themselves, they will often decide to privatize their collection and to bid to one of the big national account companies,” says Clarke. “This way they can ask for automated machines and still get the benefit of having the nicely cleaned-up streets, but let someone else have the headaches.”

A Safe Bet
“I think the biggest way the industry can save money is in the area of accidents and injuries,” begins Mike Cordesman, president and COO of Republic Services, one of the private leaders in national collection. “We spend a great deal of money on insurance as a whole. We’re subject to the costs associated with the insurance industry, but with regards to specific accidents and injuries, we can control those.”

Cordesman believes that in the area of preventing injuries and accidents, the industry has only done a fair job. To improve its situation, Republic temporarily hired DuPont Safety Resources in 2002 to guide it in promoting safety in the most efficient and effective manner.

“There’s no tried-and-true formula to use when it comes to enforcing safety,” Cordesman starts. “So you have to just keep hammering away at the issue. We make safety the number-one subject at all of our meetings, and offer a safety tip at each one. If you make it a focus at every meeting, the topic starts coming to the forefront of everybody’s minds. In years past, safety has been just another line item on the P&L statement and the issue was left up to each individual office. But now we’re focusing more on it from a corporate standpoint and centralizing it.” It’s a strategy that has proved very effective for Republic.

Although working to make the workplace and employees safer will vastly reduce collection costs in general, that’s really not the biggest benefit Cordesman sees. “At the end of the day an employee will be in as good of shape as they were when they came into work. And that’s really our biggest responsibility.”

Moving Things Around
What about landfills and transfer stations? Is there anything that can be done differently in these areas to step up efficiency? Although the idea of 24-hour landfills sounds convenient, safety is still a big issue with these. However, 24-hour transfer stations are still fairly common in certain applications.

“Garbage is one of the commodities that moves around,” says Berg. “Michigan, for example, doesn’t want Canada’s trash. Do they not want Canada’s steel or oil?” Because trash is so unpopular, it is quite a challenge to deal with. The common acronyms NIMBY (not in my backyard) and the newer NOPE (not on planet Earth) are examples of the public’s resistance to trash-dumping options. Berg is not taking an anti-environmentalist stand; he’s just pointing out that we can’t be in denial about waste—it needs to be dealt with.

“I don’t think we’ll ever see 24-hour residential collection. We may eventually see 24-hour landfills because night is when the commercial guys are out [for example, in New York City], but the disposal side of collection is not really where you can save money because it just is what it is.”

However, if municipalities and private collection companies get more creative with the way trash is transferred from trucks to landfills, they can make some considerable time—and cost—impacts. One thing being done by some cities—but not a lot—is satellite collection. This is where smaller trucks dump into a larger truck, which is the only one that drives to the landfill.

“Where this really comes into play,” says Clarke, “is where there’s a municipality that’s quite far from a landfill. With this type of collection, you have these little, manual sideloaders. They’re about 6- to 10-cubic-yard capacity, so they have a centralized location and are good for congested municipalities with lots of alleyways. This little truck picks up 300 to 400 homes and packs the trash, then meets up with a big rearloader that’s already parked and waiting. The smaller truck backs up to the rearloader and ejects its load, which is then compacted even more. So you have eight or 10 of these little trucks running around, and only one rearloader drives all the way to the landfill.”

Not only does it save time and equipment costs, but it also helps minimize landfill (and perhaps transfer) traffic. “And these smaller trucks only need one man because he can step right out to the truck, grab the garbage, and throw it into the side,” adds Clarke. “They’re a whole lot less expensive than anything else, and you can put one together to sell for $50,000. You could buy about 10 for less than half a million. If you bought 31-yard rearloaders—our most commonly sold size—that will run $150,000 to $160,000. For $1,000,000 you have a complete satellite system with three rearloaders and 10 or 11 of the little trucks, and that $1,000,000 goes a long way.”

Clarke predicts that more cities—ones farther from landfills—will be looking at satellite collection in the future because of the high cost of equipment.

The Way to Efficiency
Superior routing can save a lot of money in terms of time, so it’s a good idea to be a perfectionist in this area and continuously be in search of the best route. “For those who already have automated collection,” says Proto, “their options are to optimize their route. One way to do that is through computerized routing. However, just because it’s computerized doesn’t mean it’s foolproof. You still have a lot of manual work that has to be done to make sure that the routes are actually working as they are planned out.” There are several such software programs on the market. Once you choose one, you have to load your database into the program.

“Once you have the map [in the computer], you have to make sure it’s accurate. Sometimes they have a one-way street going in the wrong direction, for instance. In this case you’ll have to go back in there and edit it. And you have to make sure the routes aren’t crisscrossing and that they have common boundaries.” In addition to generating the number of routes you need, these programs will also generate a travel pass so a driver knows how to follow that route. “Why that’s important is that in the old days there were two or three people on a route. Now there’s only one. When that person is gone, what are the chances you can put in a relief person who knows how the route goes?”

Republic Services is currently halfway through implementing a software program called RouteSmart that is analyzing all the routes in all its companies. “There’s always areas in routing that can use improvement,” says Cordesman. “We’ve tailored this program for our company. We might find no improvement in a company, or maybe 7% to 8% improvement. I’d be surprised if we have an average of 3% improvement, but that 3% could be very substantial in terms of overall dollars.”

“One thing that can be done is to have better public information, better communication with the residents,” says Berg in reference to making sure residents know where to put their cans and when. “Explain this to the citizen in group meetings or cable access TV” is Berg’s advice for cities and private collection companies. “And explain why you want a can somewhere, or facing a certain direction.” The reasoning is such: When people understand the benefit that results from doing something, they’ll be much more motivated to do it—and remember to do it.

And for cities that don’t yet have money for computerizing their routes, Proto offers the following tip: “Residential routes, unless they have high growth, don’t tend to change a lot. But if you’re in a town that’s doing a lot of redevelopment, you have to make sure the routes that are left afterwards have enough work to be productive.”

Technologically Speaking …
If you’re one of those technophobes, it’s really time to get over it. Advanced technology is a powerful tool when it comes to expanding productivity in collection. “I think that in order to maximize your resources—your trucks and your folks—you need to get ahold of the best technology out there to help you be most efficient,” says Proto. “Whether that’s computerized routing, GPS, radio communications, et cetera."

“You’re starting to hear people talk about GPS,” says Allen. “And it seems to be more in the private sector than the municipal sector. Private companies generally have more challenges with their workforce and its quality. With GPS they can check on trucks and time spent unproductively. Cities will probably be more resistant to that because of unions that are against it.”

Berg agrees that the benefits of GPS can be quite large but also points out that it’s not a panacea for all route issues. “It’s very effective from a management point of view. But if someone is supposed to drive a route, the GPS doesn’t, by itself, help you design the route. It just makes sure the driver is following it.”

Of course, keeping up on your equipment is essential in the long-term scheme of saving money. Although a lot of what a city owns and can do in this area depends on its budget, Proto points out that it’s important to be aware of such things as whether you have a modern fleet with a lot of uptime, if your fleet is broken all the time, and how effective your maintenance program is. It’s key to think, financially speaking, long-term in this area, because what costs less now—what you’re not doing or don’t have—may very well end up costing you much more in the long run.

Cordesman is quick to emphasize the importance of fleet maintenance. Until recently, the information on the state of Republic’s trucks was limited to the division level. In a recent effort to maximize its maintenance operations, the company started using software called Dossier that allows each level of management to see truck information. “This way we can better help a manager maintain those trucks. We can see if their costs are running higher in a particular division, figure out why they are, and tell him or her how to correct that.” In short, it provides quicker feedback and more unity within the company.

How Many Trucks Does It Take to Screw in a Light Bulb?
“One way to reduce route time and miles is to use co-collection,” says Berg. “If a contractor or municipality is charged with picking up both recycling and trash, most commonly they have a trash route one day and then recycling on another. This means they’re driving through town three to four times every week just to get the materials.” With a co-collection system, there are two carts or a single divided cart out one day a week, and the recycling and the trash is picked up by the same truck. “In this model, the truck is typically a divided unit, with trash on one side and recycling on the other.”

“The trend is to have vehicles that can pick up two and sometimes even three commodities on one trip,” says Allen. “Elliott Equipment has an automated truck that can allow for garbage and recyclables. This truck can dump a garbage cart, flip a lever, then pick up a recycling cart and do the same thing.” Some of the trucks Elliott sells even have three sorts, but these tend to be less efficient because the amount of material that can be held in each section is smaller.

“Co-collection is being done in a lot of places,” says Berg. “The most famous is Chicago, where they have a blue bag system for recycling. The collectors throw this blue bag in with the trash, then pull it out at the transfer station. So they run their route once instead of twice.”

In addition to co-collection, we’re also starting to see co-mingled collection, or single-stream recycling, where various types of recyclables do not need to be separated by the consumer. “With co-mingled recycling,” starts Allen, “the materials are taken to a facility that has conveyers, and people pull the materials off an assembly line and sort it out then. This seems to be the national trend. It also creates jobs because generally there’s some kind of regional facility for the material to be dumped on a floor, pushed on a conveyer, and sorted by both mechanical means and humans.”

Never Underestimate the Little Things
“If you want to reduce costs immediately, you have to look at the little things,” starts Proto. “And there are a lot of things to look at. One of the most important is your dispatching in the morning. If you’re short drivers, you have to make sure people will cover the extra route and that they know where they’re going to go. The second most important thing is the landing. When the driver comes in, they really need some kind of debriefing. They may have had a work order to pick up extra garbage, for instance. Did they do it? How much was it? If there were any unusual situations on their lot, you want to make sure that that information gets into the computer so if the customer calls, that note comes up on the customer service screen.” Not paying attention to these kinds of things can really add up financially.

Also, using software to increase the efficiency of administrative tasks can make a big difference on overall savings. For instance, Mick Baker, CEO of Alpine Technology Corp. in Colorado Springs, CO, a developer of software for the waste industry, feels that having an automated voice system is a very smart way to go. Though many would argue that having a computer’s voice replace a human’s is never a customer service improvement, when it comes to managing calls most efficiently—at least on the company’s end—Baker’s argument is sound.

For instance, he points out that many common service questions—such as those dealing with billing and the ever-popular “Why haven’t I been serviced yet and why?”—can be answered with an automated system. This means employees can spend more time being productive in other areas, with live customer service reserved for those calls that don’t have cookie-cutter solutions. Baker also encourages companies to provide information on the Internet, in addition to the use of automated voice systems, to enable quick customer access to information and further increase employee productivity.

“Questions don’t get answered as well without an automated system,” says Baker. “If you have a good, basic automated system that you can grow with, you don’t need to have the human resources to correspond so much with your growth. You’re going to see a lot more automated voice systems in the future for waste companies.”

“The goal should be to master making small incremental changes,” says Cordesman. “The point is that you can’t look at one particular item and say you’re going to realize a 15% efficiency increase. That kind of predicting never comes true. Instead, our general managers’ jobs are to master all facets of that collection company and make small improvements in different areas that have a cumulative effect on improving the bottom line.

“The GM’s job is not easy,” he adds. “To master those skills is really what separates the good managers from the others.”

LA-based journalist Amy Sorkin specializes in marketing communications.

MSW - May/June 2005