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Reverse Logistics Lesson: Turning Trash into Cash Is a Growth Industry

Reverse Logistics Lesson: Turning Trash into Cash Is a Growth Industry

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Start a reverse logistics degree at American Public University.

By Dr. William Oliver Hedgepeth
Faculty Member, Transportation and Logistics Management, American Public University

Trash is a core pillar of the reverse logistics business. There are mountains of trash in every city and town in the country. In the world of supply chain management, trash has become an essential ingredient for manufacturing new products.

If you are like me, you have a recycling bin for plastic/glass containers and paper products. The recycling truck comes by every week and hauls away the contents of those bins. The trash is then turned into raw materials for different products that come back to us as boxes, grocery bags, toys and much more.

China, Our Biggest Purchaser of Trash, Is Shutting Down Waste Imports

The Institute of Scrap Recycling Industries (ISRI) is tracking a growing problem that is among the paper and plastics trade surplus discussions in the White House, Congress, and manufacturing and retail businesses.

Erica E. Phillips in the Wall Street Journal writes that “the biggest buyer of the stuff doesn’t want it anymore.” China has served notice on the U.S. business and political community of Beijing’s strategy of limiting foreign waste.

One of the leading recycling industries is the Allan Company of Baldwin Park, California. This company has been in the recycling business since 1963. The company has huge warehouses that are piled high with plastic bottles, bales of office paper and smashed cardboard boxes.

Allan ships more than 1,000 containers of trash to China each month.

The U.S. is the world’s top producer of waste, and the home recycling program shows no signs of diminishing. It’s no wonder that the popularity of bachelor’s and master’s degrees in reverse logistics, as well as specialized certificates in reverse logistics, continues to grow.

Growth of the Trash Industry Has Created Higher Education Opportunities

The growth of the trash industry and higher educational opportunities have expanded simultaneously. In 2012, for example, APUS launched the first bachelor’s and master’s degree programs in reverse logistics.

As the business of exporting household and business scrap grows, so does student enrollment in these academic programs. In fact, one reverse logistics student was promoted to VP of Recycling at her company after she demonstrated that she could sell the trash her company had paid others to haul away for more than 17 years.

“In any given year, approximately one-third of the scrap recycled in the United States is prepared for shipment to the export market, and China is the recycling industry’s largest customer,” Recycling Today reports, citing ISRI figures. “This includes more than $1.9 billion in scrap paper (13.2 million tons) and $495 million in scrap plastics (or 1.42 million tons).”

US Scrap Exports to China Are Worth $2.2 Billion More Than Food Exports

If we compare U.S. scrap exports to China with our exports of wheat, rice, corn, meat, dairy and vegetables, Phillips writes, paper and plastic scrap exports to China were worth $2.2 billion more than our food exports.

China has reexamined its own homegrown recycling programs as Chinese households gain increased access to more goods. As a result, they produce more waste, which is collected and recycled domestically. China has put its foot down on our dirty trash. In fact, China is planning to stop imports of U.S. plastic waste by December.

China is also imposing new restrictions on “carried waste.” That includes paper staples, glue and food that is still in its container, such as cat food. Basically, China is banning anything that requires a separate step in reclaiming the material for clean raw materials.

This change in China’s waste policy may be included in future negotiations between Chinese and American leaders.

Reverse logistics is all about adding value to what we call waste or trash. Whenever we recycle materials, we add value not only to transportation, logistics, supply chains and retail/wholesale businesses, but also to our communities. We also teach our children a lesson about value without having to preach to them.

Waste and scrap materials are worth money. Pick up your recyclable materials and clean them off. Recycling is worth your time.

Start a reverse logistics degree at American Public University.

About the Author

Dr. Oliver Hedgepeth is a full-time professor at American Public University (APU). He designed and developed the B.A. and M.S. programs in Reverse Logistics – the first in the U.S. He is the former program director of two academic programs: Reverse Logistics Management Program and Transportation and Logistics Management Program. Dr. Hedgepeth was a tenured associate professor of Logistics and chair of the Logistics Department at the University of Alaska Anchorage. He has published two books, RFID Metrics and How Grandma Braided the Rain.

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