PPRC 2022: The role of transparency in chemical recycling

The Paper Stock Industries chapter of the Washington-based Institute of Scrap Recycling Industries hosted a commodity-focused panel on old corrugated containers (OCCs) and mixed paper at the Recycling Conference of the Paper and Plastics 2022 in Chicago on October 20.

The panel, moderated by Pratt Recycling President Shawn State, was an opportunity for industry players who deal with OCC and mixed paper to discuss the challenges they face, especially from the start. of the coronavirus pandemic in 2020.

Speakers included John Grinnell, vice president and general manager of Greif, based in Delaware, Ohio; Jeff Ryalls, vice president of recycled fibers at International Forest Products, based in Foxborough, Massachusetts; and Evan Barrett, director of recycling product sales at GFL Environmental Inc., based in Ontario.

The discussion began with panelists discussing the changes they have made to their respective businesses to navigate the changing market from 90 days ago. As the market has moved at such a rapid pace, panelists agreed that going back 90 days is equivalent to going back two or three years to previous markets before the pandemic.

“These are the kind of times that test the economy of recycling, and paper is a wonderful success story in terms of creating a circular economy and a very vibrant recycling industry,” Grinnell said. “For us, what we really need to focus on is the basics and make sure we’re aggressive in looking for opportunities to reduce process costs so we can make sure the fiber keeps flowing.”

Grinnell said supplier relationships have been difficult when, after two years of robust pricing, the market looks dramatically different, adding that Greif has been candid and willing to have these “tough discussions to ensure the fiber continues to to move”.

“I think anyone who works in the paper recycling industry hasn’t had as much fun watching our month-end results here for the past couple of months as it has before,” he said. “We have to keep that in perspective. Our industry is inherently cyclical. We are here for the long term.

Ryalls said one change at International Forest Products was the transition from an export orientation to the domestic market and then to export, adapting to the changing market.

“Over the last 90 days, a lot of the things that we’ve put in place over the last two years, we’ve had to backtrack and go back to exporting,” he said. “Fortunately, we have a manufacturing business and we have a commercial business, so we are able to pivot quickly. But in the past 90 days, we’ve exported a lot more than we’ve been in the past two years. »

Barrett said the changes presented an opportunity for industry players to branch out.

“It’s an opportunity to look at how our supply is going, where it’s going and why it’s going,” he said. “It’s pretty easy to overlook these things when the markets are huge and fiber is everywhere. But, when it comes to situations like this, it exposes our weaknesses and where we can improve and do better.

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Logistics have been a major challenge in the recovered paper industry, whether trucking or shipping, and no business has been immune to the burden of a blocked material flow.

Grinnell said that over the past year and a half most of the gear that was pulled from the market during the pandemic has now come back. He said what’s on the road isn’t quite back to the level seen in 2019, “but we’re almost back at this point.”

“[I] definitely see this situation improve in terms of what we have done to try to deal with inflation and fuel,” he said. “Some of the equipment challenges are still there. We have tried to reduce freight circles. We’ve been much more aggressive in trying to look for opportunities to align backhauls and making sure we’re really using equipment as efficiently as possible, making sure we understand where we have underloads and dealing with those loads. to get the maximum efficiency possible, because we can’t do anything about the cost of fuel. »

Ryalls said International Forest Products has also encountered transportation issues, but more so on the driver retention side, as well as high fuel costs. The company raised wages to retain drivers and attract new drivers to its fleets, implemented shorter routes so drivers could be home every night, and reworked stop fees and detention costs so that drivers are compensated in the event of delay.

“We managed to get our fleet back to where we wanted it,” he said. “We have it at a healthy level and we see the market starting to soften, so that’s really good.”

Barrett agreed with his fellow panelists when it came to freight, describing the situation as “another one of those pain points [where] the pressure was going up and up and up and then when it got to the extreme we had to reset and let the dust settle and find normal.

“We’re all kind of doing our best,” he said. “But it’s definitely better than before.”

The state noted that Pratt also had to raise wages to retain drivers and said it has become easier to find and hire drivers.

Transportation challenges have not only been inland. Exporting recovered paper overseas was problematic for much of the pandemic and remains a problem to this day.

“Historically, we’ve always been able to easily get export bookings,” Ryalls said. “During this three-year global supply chain crisis, carriers really dictated to us where we could go, what coasts we could get books from, where the availability is. We really base our overseas sales on where we could actually ship.

He said it’s no longer about shipping to a customer you have a great working relationship with or where you can get the best price, it’s more about whether there’s a reservation available from the supplier and whether ultimately he can obtain the material for the consumer.

“It’s just been a big shift in the industry,” Ryalls said.

He added that the industry was starting to see some relief on the export side, particularly in the past 60-90 days, but said ultimately it would come down to supply and demand. “It’s not for the faint-hearted trying to load these containers every week, manage accounts and serve customers,” he said. “It’s extremely difficult.”

Curbside recycling is another aspect of the industry that has changed since the start of the pandemic, with the flow of materials changing with consumer habits. As e-commerce grew exponentially in 2020 and 2021, more OCCs were found in recycling streams, but Barrett said the changes now came from a consumer push to see more sustainable packaging.

“I think the flow was evolving even before COVID,” he said. “The common conversation you hear…is that containers are shrinking. We are getting more and more into single-use packaging and we are seeing the whole food industry change. … The roster is changing and we and everyone are doing our best to keep up.

One of the most notable changes to the municipal recycling stream is the increase in white paper grades. As people have shifted to more remote working, the white paper that typically appears in commercial feeds is appearing in curbside bins and ending up in bales of mixed paper.

“We’re seeing a lot more of that,” Barrett said. “I think we’re going to need more time to be able to talk about exactly the levels and what’s going on. … We are not there yet. We’re still in the post-pandemic era and we’re collecting data as fast as we can, but we’re adapting.

As for the business side of the business, Grinnell confirmed Barrett’s observation of an increasing volume of white qualities appearing in the municipal stream. “Things that depended on people being in the office, we continue to be deeply challenged in terms of supply,” he said.

Ryalls, however, said grocery volumes are fairly flat and consistent with very little month-to-month variability, but there have been significant fluctuations in retail volumes on the inbound side. .

State then posed to the panel what he called the “age-old question” of how the industry can improve education around single-stream recycling, saying it’s something everyone in the industry is dealing with. industry struggles as they look for ways to improve the quality of materials coming across the stream.

“Everything,” Barrett said. “[It’s] a simple answer.

He explained that recyclers are often stuck in the circular economy by consumers who want recycled packaging and brands that listen to consumers. “But then it puts us in the middle, and we have a one-way valve right now, especially anyone dealing in the municipal sector,” Barrett said.

“There will be times when things get tough and things get tough and we don’t want to damage the image of recycling or do anything to shake the cage, but there are realities with that,” he said. he continued. “If we want to take a linear economy and make it a circle, that means those two points that were once at either end now become a link in the chain.

“We need to start bringing the recycling economy into the conversation when we educate.”