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How to Reduce Your Hauling Co$t$

In general, a stationary compactor consists of a hydraulically activated ram that pushes waste material into an enclosed bin. The economic justification for using one is simple -- reduce material haul...


In general, a stationary compactor consists of a hydraulically activated ram that pushes waste material into an enclosed bin. The economic justification for using one is simple — reduce material hauling costs by compacting the load (i.e., increasing density) and thereby haul the waste bin less frequently. Although they are effective, compactors aren’t cheap; it’s important that a prospective buyer do homework before spending thousands of dollars on one.

Here’s a six-step guide to help determine if a stationary compactor is suitable for your organization. The guide uses old corrugated cardboard (OCC) as an example of the material to be compacted but the guide can be applied to almost any solid waste material. The example is based on an actual scenario (a public recycling depot) where OCC was formerly hauled for recycling in non-compacted loads and where the best possible price for the hauling/recycling services was negotiated.

Step 1: Mini-waste audit

A mini-waste audit can help determine if there is a benefit to using a compactor. This can be performed by in-house staff or an experienced waste management consultant. For OCC, these issues need to be determined:

the amount (tonnage) of OCC currently hauled;

the peak amount of OCC generated and when;

the largest dimension of cardboard disposed;

the cost of hauling the material, plus any additional costs that a compactor may offset (e.g., bin rental charges);

the frequency that the current bin is hauled and the terms of the hauling contract; and,

who manages the collection of OCC within the facility and when.

In this scenario, two 20 cubic yard roll-off bins were used for OCC. At least one bin was hauled each week and the average weight of OCC per bin was 1.22 tonnes. Approximately 95 tonnes of OCC is hauled for recycling each year from the facility at a net cost of almost $7,000 ($80 per haul plus $50 per month rental charge for two bins).

No rebate was paid to the generator by the recycler based on the commodity value of the cardboard. Public access to the bins was unrestricted and the rate of OCC disposed was fairly constant throughout the week. The largest piece of cardboard placed in the bin measures about four feet across. (This means that to prevent machine downtime from jamming, the smallest dimension of the loading hopper door and chamber of a suitable compactor would need to be greater than four feet.)

Step 2: Compactors 101

A prospective buyer should develop a basic understanding of technical information before contacting compactor distributors.

Environmental trade magazines, waste management companies and the Internet (see www.solidwastemag.com) all provide information about stationary compactors and are good places to start for preliminary research.

The Waste Equipment Manufacturers Institute (WEMI) Compactor Manufacturers Directory, published by the National Solid Waste Management Association (NSWMA), is also a good source of information. This booklet lists various U.S. manufacturers and explains terminology and technical characteristics, such as NSWMA ratings, chamber dimensions, cycle time, ram penetration and motor sizes.

Step 3: Scope of work

To help determine the scope of work, find answers to the following:

What are the staff training requirements and who will do the training? Do I want the distributor to supply an operation and maintenance manual? What are the safety concerns when it is installed, operated and maintained? (This includes potential confined space issues, developing lockout procedures and installing railings for fall protection.)

What about ergonomic considerations, such as the height of hopper doors and the access to bin attachments? What are the electrical supply requirements and their associated costs? (This includes the need for and location of a main disconnect switch, emergency stops and interlock switches on doors. Will the compactor and controls be exposed to weather? If so, the electrical works must be designed for that purpose.)

Where is the best location for the unit and what are the physical space constraints?

Will a concrete pad need to be installed as a footing for the compactor? If so, what are the design, construction and cost considerations? What about signs, vehicle access to the bin and housekeeping cart access to the loading hopper?

Step 4: Research the market

You’re now ready to start making some inquiries. Determine who sells stationary compactors, who hauls them and what recycling facility can accept compacted loads of materials.

A good salesperson will determine your needs and then match those needs with the appropriate equipment. Avoid salespeople that try to fit your application into their piece of equipment, particularly if extensive equipment modifications are necessary.

Always learn as much as possible about the manufacturer and distributor. One particular manufacturer may have a stellar track record in terms of quality control and equipment reliability, but will the distributor provide you with the level of customer service you expect and require? Customer service must go beyond sales and installation. Will the distributor provide after-sales assistance such as operator training, maintenance and parts supply? A proven history and warranty will help minimize headaches, so ask the manufacture to provide references from clients.

Other questions you should get answers to:

How long has the manufacturer and distributor been in the industry? How long has the distributor had a working relationship with the manufacturer? What type of industry does the manufacturer and distributor typically serve? Where are most of the distributor’s clients located? Where are the parts manufactured and what is their availability?

What kind of warranty is offered and how are warranty repairs handled? Can the salesperson offer welding, metal fabrication, mechanical and electrical services if equipment modifications are required in the future?

In terms of capital cost estimations, find out the range of costs for the equipment that a distributor carries. Perhaps the distributor offers rent or lease options. Find out how much the hauling costs will be — net any rebates based on the current commodity value for OCC.

Step 5: Calculate the cost-benefit

A rough cost-benefit analysis can now be completed. From the example scenario, a good estimate of the cost of a stationary compactor with bin was determined to be $35,000. It was determined that 95 tonnes of OCC is hauled annually at a cost of almost $7,000. Assuming that a 40 cubic yard bin is used with a compactor, it’s reasonable to expect four to seven tonnes of OCC per haul. A conservative estimate of four tonnes per haul results in the bin being serviced 24 times annually.

Using a commodity value of $65 per tonne (based on the average past six-month price paid for OCC delivered to the recycler) and a hauling rate of $80, it was determined that over $4,000 per year in revenue could be generated by using a compactor. This means that the capital cost of purchasing a compactor could be recovered in about eight years, which is not bad considering the expected life of most units is 10 to 20 years.

It’s important to note that the recyclers in this example were not interested in paying for uncompacted cardboard loads. It was believed that by switching from open bins to an enclosed compactor there would be increased control over what materials were deposited into the unit, which in fact turned out to be true. Greater quality control generally translates to a higher price offer for OCC delivered to the recycler, which in turn leads to a quicker payback for a compactor.

It’s also important to remember that the final economic analysis must take into account all costs/benefits associated with the compactor, such as operating, maintenance and installation costs. “Soft” costs/benefits should be considered such as increased space from fewer bins, improved material flow and enhanced aesthetics of the facility due to better
waste material management.

Step 6: Dollars and sense

Now you’re ready to get some firm price quotes so that you can complete a more detailed financial analysis. Instead of tendering based on specific equipment, develop a set of performance criteria to expand purchasing options. Issue a request for proposals (RFP) or a request for quotations (RFQ) instead of using a rigid bid structure. Utilize the expertise of the equipment manufacturers and distributors to your advantage. By allowing them the flexibility to provide creative options, you’ll be well on your way to saving time and money, and will improve your solid waste management operations.

For a copy of the Waste Equipment Manufacturers Institute (WEMI) Compactor Manufacturers Directory, contact the American Environmental Industry Association at 202-244-4700.

Chris Underwood, P.Eng. is a project engineer with the City of Vancouver, British Columbia and a lecturer at Kwantlen University College in Richmond, B.C. This article first appeared in EnviroRx.


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