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How to Become a Scrap Metal Vendor

Opportunities at Various Levels of Capitalization

One of the great things about becoming a scrap metal vendor is the ease of entry. Entrepreneurs can participate with little or no investment, while those with more substantial capital may consider starting or acquiring an asset-based entity.

Further Reading

The Benefits of the Metal Recycling Industry

The United States recycles 150 million metric tons of scrap materials annually. In 2008, the scrap recycling industry generated $86 billion and supported 85,000 jobs.

Further Reading

Recycling Spotlight10

Buffalo Recycler Faces $61,000 in OSHA Fines

Thursday April 28, 2011
A Buffalo recycling operation is facing $61,000 in fines from the Occupational Safety and Health Administration stemming from an accident in October 2010 that injured a worker's arm, according to an OSHA release.

"These citations illustrate two primary workplace safety and health concerns: traumatic injury from being caught in machinery that wasn't properly shut down and locked out, and potential exposure to disease from inadequate precautions against blood and sharps," said Arthur Dube, OSHA's area director in Buffalo. "Both of these hazards can be addressed by equipping employees with knowledge and tools to minimize work-related hazards and help them do their jobs safely."

The inspection by OSHA determined that the conveyor had not been de-energized and had its power source locked out before the employee attempted to clear the jam. Subsequently, the area supervisor had not verified that the employee was clear of danger before restarting the machine.

The inspection also found that employees involved in the cleanup as well as in handling needles and sharps had had training with respect to bloodborne hazards. Furthermore, OSHA noted that the facility's bloodborne pathogen program had not been reviewed and updated, annual refresher training had not been provided to workers, the hepatitis B vaccine was not made available and sharps were disposed of improperly.

According to the Buffalo News, Buffalo Recycling is challenging the allegations, with its lawyer characterizing the OSHA action as overreaching.

Robert Walsh, an attorney for Buffalo Recycling, described the injured worker in the Buffalo News report "as an "expert" who injured himself while directing the repair of the equipment," adding that "We feel OSHA knew or should have known the cause was the in-effect expert who ended up hurting himself."

From my experience, a "blame the worker" strategy is rarely successful, unless the operation already has a strong health and safety program in place and can prove it. In many cases it is too easy to blame the injured employee, when in fact such an approach may stop an accident investigation short of finding a legitimate root cause that will prevent future injuries - such as identifying the absence of an adequate lockout/tagout program.

Lockout/tagout is a serious matter. Never take it for granted.

Is New Pallet Pool a PLUS for Pallet Recycling?

Wednesday April 27, 2011
This story is perhaps a decade or more in the telling. Over the years, pallet rental companies have gradually taken a larger and larger share of the FMCG (fast moving consumer goods) market at the expense of the informal 48x40" white pallet pool, and independent pallet recyclers have struggled with trying to figure out how to maintain their share of that pallet market segment. Fruitless discussion about collaborative pooling efforts that would improve pallet quality, or introduce the more desirable block style pallet, has gone on for years.

But it was the Costco factor, as I have outlined elsewhere, that seemed to be the spark. The major retailer announced that it would no longer accept white stringer pallets, the pallet used in the informal 48x40" white pallet pool. Instead, pallets had to be block pallets, specifically those from rental companies including CHEP, PECO and iGPS.

Rallying to provide a competing product, members of the pallet industry have launched PLUS, or Pallet Logistics Unit-load Solutions. This program is intended to deliver a block style pallet as desired by industry, with quality controls ensured through a 3rd party inspection program.

And best of all, it is a free market system. Any pallet company that meets requirements can join the program. Pallet users are free to choose from among authorized providers.

From a recycling perspective, the more standardization there is in a secondary market such as pallets, the greater efficiency can come to recyclers. There are higher volumes, less variation, higher demand, and more competition. Individual margins per unit are lower, but it is a bigger pie in terms of volume.

Read more about PLUS.

Sims Shows Strong Performance in Metal Scrap Sector

Wednesday April 27, 2011
Prior to its formal announcement of May 6, Sims Metal Management has pre-released its results for the nine months to March. Its unaudited figures show a 23 per cent rise in sales revenue to $6.2 billion with net profit up 74 per cent to $123 million. Earnings before interest, tax, depreciation and amortization for the period was up 38 per cent to $295m.

After a sub-par first half, blamed on harsh U.S. weather conditions, notes www.theaustralian.com, Sims is enjoying better weather and a stronger economy, resulting in stronger scrap availability and demand.

Through recent mergers with Hugo Neu and Metal Management, Sims now has about 15 per cent of the vitally important U.S. scrap metal industry, thanks to recent mergers with Hugo Neu and Metal Management, and about two-thirds of its revenue comes from North America.

FBI, Local Police Investigate Pallets at Recycler Facility

Monday April 18, 2011

The Toledo Blade has reported a raid involving Perrysburg Township police and the FBI have at a local recycling business. The move came in conjunction with a probe into a potential grand theft scheme involving stolen pallets.

Investigators were trying to determine if 400 plastic pallets at Pallet World Inc., had been legally acquired. The report suggested that the theft scheme might involve losses to iGPS amounting to seven figures.

It is worth stressing that recyclable materials theft, including that of plastic pallets, is a serious problem, which is best addressed collaboratively by stakeholders. One such approach is ScrapTheftAlert.com. Owners of reusable pallets and containers should take necessary steps to safeguard their assets.

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