Recycling companies face great setbacks in operations as the effect of the on-going trade war between the U.S. and China. Their operations were upended when China, after decades of trade, stopped accepting American recyclable materials.
China's new policies created hesitation on the recycling divisions of the Waste Management Inc. and the Republic Services Inc, the two top recycling companies in the U.S. The companies were unsure of their profit projections as the trade with China ended.
According to Richard Coupland, the vice president of municipal sales at republic services, they have zero shipments going to China. He stated that the company can trade with others but their business plan is upside down.
The data from Scrap Recycling Industries Inc. showed that 31 percent of U.S. recyclable materials, worth $5.6 billion, were exported last year. The Republic Services Inc. has contracts with more or less 2,400 U. S. municipalities in its 40 states including Puerto Rico and 40 percent of scrap products of these places were sent to China to be processed into boxes, packaging, toys and other goods.
According to Coupland, doing business with China usually provides cheap shipping cost because carriers usually offer discounted prices for shipping containers to be shipped back to Asia after arriving at U.S. ports with Chinese made goods.
He added that the trade war complicated the business. They have found new business partners in Malaysia, India, and other markets but transportation from these places to the U.S. increases their transportation costs. The increase in the prices of goods in the global market also added to the profit loss that they are encountering.
The added cost to their operations will be passed along to the American households and businesses. Mr. Coupland said that cities need to create a better and more durable business model in facing the challenges in their recycling programs which mean an increase on higher prices on contracts and doubled recycling services estimated to be about $7.
He added that China's new policy will result in contamination of waste imports and this will force recycling collectors to upgrade their equipment and hire more personnel to work their end. Customers should also help in segregating their trash to help in the operations cost of the recycling companies.
Mr. Coupland added that information dissemination is important, everyone has a role to play, and everyone needs to be involved. He also added that it will help tremendously if we get better at what we throw away.
