Reverse Logistics of the Recycling Industry

When people think about recycling, they normally think in very general terms. Recycling refers to the process by which we take used materials and transform them into new products, thereby reducing waste. But in truth, recycling is a very complex process with several steps. In order to create a recycling system, we must set up procedures that work in the opposite direction of traditional production. Instead of taking a raw material and turning it into a final product, the goal is to take a final product and turn it into a raw material. Normally, the term “logistics” refers to the process of bringing the product to the consumer. The recycling industry, however, employs “reverse logistics.”

Recycling systems have several steps. First comes “source separation”, which refers to the initial disposal process. The goal here is to have consumers clean and separate their materials to facilitate distinct collection of recyclables vs. waste. This is the step that is most visible to the general public. Supplying adequate recycling containers and educating people to clean and sort materials are the most crucial elements in this phase of the process. When materials are not cleaned or sorted property, it creates greater inefficiency in the process and makes it harder to distinguish between waste collection and recycling collection, thus resulting in recyclable materials being sent to incinerators and landfills as well as dirty trash being sent to sorting facilities. Improving source separation strategies is a key element of reverse logistics.

The next step is collection and transport. Recycling systems require their own unique forms of transport and collection which we refer to as “selective collection”. Normal waste disposal employs compactor trucks that compress material in order to increase the quantity that can be transported at once. For recycling transport, this is not possible because compressing the material will mix it together and create greater difficulties in the sorting phase. This makes transport trickier and much more expensive, as a recycling truck can pick up only a small percentage of the materials that a compactor truck can. Also, transport must be designed in a way that maintains efficiency gains from source separation in the sorting process. For example, if residents separate aluminum, glass and plastic in separate containers, but then these materials are dumped together for transport only to be separated again during sorting, this creates inefficiencies in the system.

After transport comes sorting. This requires an appropriate facility (warehouse) as well as a team of workers. There are various forms of sorting, although the most common procedures I have seen in Brazil involve either sorting by hand out of bags on the ground, using a “silo” where material is dumped and falls down to a workbench by a standing worker, or a conveyor belt with a group of workers, each responsible for collecting a different material. A student of Dr. Lima and a good friend of mine, Cinthia Varella, designed a diagram for understanding various sorting processes within the scheme of reverse logistics (with my translation):

The sorting process is quite complex, and of course, many inefficiencies can arise within the warehouses, whether it is in the flow of materials within the space, personnel issues, equipment difficulties, etc. Normally, the sorting process tends to be the most labor-intensive phase of reverse logistics, and is the focus of most associations and cooperatives of catadores.

The final phase of reverse logistics is the transformation of the product from its raw form to a new, prime material. This is the most technologically complex step and one that requires more detailed industrial expertise. It is important to remember that even the best recycling systems with wonderful source separation, selective collection and sorting will be complete failures if there are not businesses out there interested in buying the materials and turning them into new products. There are many problems with this phase that continue to hinder the development of reverse logistics internationally. First, there are technological limits, and we need to study and design new industrial recycling processes that businesses can use en masse for materials that currently are unable to be transformed. (Electronics, for example, continue to present special difficulties due to their complex design.) Second, there are economic limits, as business owners find virgin material (paper, plastic, etc) to be higher quality and relatively cheap and abundant, and thus tend to prefer using these materials when possible. Third, there are social limits, as the general public does not place a very high premium on buying recycled goods and promoting recycling, and thus does not put any pressure on the private sector to change its practices or on the government to invest in new research and development.

Established the reverse logistics of recycling systems therefore requires attention to all four of these phases, and is not as simple as promoting “awareness” or installing recycling containers across town. Inefficiencies arise in every step of the process, and the investment required is significant, especially when compared against the costs of conventional collection using single bins, compactor trucks, and landfills/incinerators. Because of all these complications, recycling is enormously expensive and normally not cost-effective when you compare the costs of these four phases to the limited profit of selling materials to industry. That is why a private market for recycling does not spring up naturally, with businesses competing with each other to enter the market. In fact, the sector only exists at all for two main reasons. First, the economic desperation of waste-pickers has led them to rely on the activity for a basic mode of subsistence, using their manual labor as the chief input in the process. Second, environmentally-minded governments, normally with a push from their constituents, recognize that conserving natural resources is a public good with a positive externality, and thus begin to subsidize the activity. In poorer countries, recycling tends to persist due to the former motive; in richer countries, it is the latter that drives the market. One is considered “informal” and the other, “formal”, although I do not believe this rigid distinction is an appropriate way of separating the two approaches, especially considering that catador is a profession officially recognized by the Brazilian government.

The future of reverse logistics is one that is immensely important to understanding associations and cooperatives of catadores. One interesting debate in the waste management field regards the concept of “best practices.” To what extent will the technologies and systems designed OECD countries set the standard for use in the developing world? As my previous post about carts demonstrated, implementing technology is not always so straightforward. But as governments here in Brazil move to subsidize recycling systems more and more (especially through the new Solid Waste Law passed in 2010), it is possible that they will begin to mimic systems in the U.S. and Europe. While this may be good for promoting recycling in general, it represents a grave threat for the catadores. If new capital-intensive technologies such as robo-sorters replace labor-oriented approaches such as manual sorting warehouses, the catadores may find themselves pushed out of the market by new private companies subsidized by the government. Figuring out how to integrate the benefits of Western technologies into waste management systems in the developing world without harming the catadores will be a huge challenge.

While I am home in Maryland during December, I will be conducting research on the Mongtomery County recycling system, often considered to be a model across the country. I am particularly interested in observing technological differences between the U.S. and Brazil as well as best practices in reverse logistics. Afterward, I will write a blog update to explain the lessons I learned from the experience and their significance for the future of Brazil’s catadores.