If you’ve been in this country long enough, you know that Thanksgiving, aside from being a national holiday, is the unofficial start of the holiday shopping season. And as consumers shift from buying in stores to online, a result of that trend is a rise in packaging waste. Fedex (FDX) is predicting a 12% jump in holiday shipments this year alone, and that also means a rise in cardboard boxes, plastic packaging, and other forms of shipping waste.
All of this packaging has an impact on the environment, but what's its impact on business? David Steiner, president and CEO of Waste Management (WM), says this holiday season will be a big one for the shipping industry, but it's also an opportunity for the recycling business.
“When you look at recycling, the most valuable material to recycle—and the best for greenhouse gas emissions—is cardboard and paper,” Steiner says in the attached video. "So all that packaging—put it all together, bundle it up, and let us take it away and recycle it for you—and it'll be back next Christmas."
He notes that recycling is 10% of Waste Management’s overall business, which is not insignificant, but that industry trends have not been helping the business recently. As commodity prices for paper, metals, and plastic fall, the demand for recycled materials from those raw products falls as well.
“Recycling has been a little bit of a challenge for the last few years,” Steiner said, but notes that Waste Managment is optimistic about the future of conservation. “We're the largest recycler North America. We always will be the largest recycler in North America. But what we're trying to do is to develop a business model where we can get sustainable profits over time, so we can continue to invest in recycling, so that we can do more rather than do less.”
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One way to grow the recycling business is to be smart about what’s recycled and optimize the process. “Plastics are very easy to recycle, very good in reducing greenhouse gas emissions. Paper’s the exact same way, metals exact same way,” he says. “The problem starts to come when you get to organics and then most particularly when you get the glass.” Glass is expensive to pick up and process. The “bang for your buck,” he says, is not with glass, but with paper, plastics, and metals.
Overall, Steiner is not surprisingly bullish on Waste Management’s prospects. He has grander plans. In the future, you won’t be thinking of garbage when you’re thinking of Waste Management, you’ll be thinking of renewable energy and chemicals, he says.
“It will happen, It will absolutely happen,” Steiner predicts. From collecting gases like methane from landfills to use as energy to direct combustion of waste materials, the possibilities for energy creation are growing. “That's ultimately where we're going to be. We're going to take your waste, and we're going to do things with it that we're not even doing today—turn [waste] into energy, turn it back into chemicals, turn it into specialty chemicals.”
