Marketing Blue Box Commodities Matters: A Financial Comparison of Multiple Approaches – Part 2admin
If you recall from part 1 of our series on the marketing of recyclables, a key objective was to outline the pros and cons of the various marketing approaches that municipalities could pursue. In this blog, we present a financial comparison of the approaches with the intent being that municipalities and municipal programs utilize the data internally to evaluate the effectiveness of their approach.
Revenue from the sale of containers in five different communities over the past three years (July 2015 – July 2018) was compared by ReMM. Included with the results are two indices that track Ontario pricing trends – the CIF Price Sheet and Recyclingmarkets.net (New York/Ontario region). The CIF Price Sheet tracks monthly commodity prices as reported by Ontario municipalities whereas Recyclingmarkets.net tracks weekly commodity prices across the US and Canada.
|Broker Markets Material||Price Indices||Municipality/Program Markets Material||Contractor Markets Material|
|Commodity||Broker A -Single Stream||CIF Price Sheet||Recyclingmarkets.net NY/ON||City A - Dual Stream||City B - Single Stream||Contractor A - Dual Stream||Contractor B - Dual Stream|
|1-7 Mixed Plastic||$50||$126||$68||$50|
Readers are encouraged to compare their municipality’s data over the same period to the table. A significantly lower price for a marketed commodity may signify material quality issues or a cumbersome marketing approach and warrant a review of the municipality’s marketing and processing strategy.
This data and its availability highlight the importance and opportunity of taking the time to review a municipality’s marketing performance against available resources and giving consideration to adopting alternative marketing strategies to manage underperforming commodities. This point is echoed by Rick Clow, General Manager of Quinte Waste Solutions, “at Quinte Waste Solutions we utilize a hybrid approach to market our partners recyclables, which includes a bid process, spot marketing and longer-term contracts with end markets or brokers. But in whatever process we utilize, on a per material basis, we are regularly cross-checking pricing from other sources. This is important because if we find that we are sliding, we will try to determine why we are lower and may look to a broker, for example, for alternative pricing.”
For more information