The Uber of the waste industry

Weight-based billing may be a disruptive technology, but just how far away is it from shaking up the waste industry in Australia?

When Garrett Camp co-founded Uber in 2009, the Canadian digital entrepreneur had a clear goal in mind – to provide an alternative solution to standard cab services.

According to media reports, the idea emerged from an exorbitant New Year’s Eve trip with a private driver. A US$800 private driver service convinced Camp that there had to be a better way, and he devised a plan shortly thereafter to split the cost of transport through a ride sharing model.

While the service took several years to take off, it’s now well and truly exploded, with 40 million riders using the service in a single month in 2016. The snowball effect of this continues to disrupt the taxi industry, with the state of Victoria recently introducing a $2 levy for all commercial passenger vehicle trips in order to create a level playing field.

Now almost 10 years down the track, the term ‘disruption’ has become somewhat of a buzzword, as numerous industries undergo periods of change. Deloitte’s Digital disruption – Harnessing the ‘bang’ report has identified 13 industries – comprising 65 per cent of the Australian economy – potentially facing significant disruption in 2017.

One industry yet to experience significant disruption is Australia’s waste industry. From driverless waste vehicles to Internet of Things (IoT) sensors, there are a few technologies which could disrupt the market. One technology closing in is (WBB) weight-based billing. The concept provides real-time data on the billing of waste management services for front and rear loader bins in the commercial and industrial sector. This is a stark contrast to the industry trend of having a sales person provide an assessment on the cost of disposal every six to 12 months. The idea is to incentivise recycling by discouraging landfill through clearer price signals and improve profitability with accurate measurements of waste. Its proponents believe that if waste generators know the full price of disposal to landfill in real time, they may be more likely to recycle.

NEW BEGINNINGS 

While it’s been around in Europe for quite some time, the billing system, which comprises commercial and industrial waste bins (shops, schools and buildings), has only recently gained traction in Australia. Recently, a study was undertaken by MRA Consulting Group (MRA), with support from the New South Wales Environmental Protection Authority (EPA). Mike Ritchie, MRA Director, says the early results of the trial between MRA, waste management company REMONDIS, truck manufacturer Bucher Municipal, and weighing systems company Diverseco are “promising”. While we could be at least three to five years away from the service becoming mainstream, Mike says he sees enormous potential for WBB – provided there is support from state and territory governments to conduct trials, test the technology and ensure the market is fairly regulated. This is because there are a number of unregulated weighing systems already in the market and these are cheaper and easier to install.

“The results of the trial, based in the Hunter Valley of NSW, are in line with what we expected. Although the sample size of 300 businesses, including the control groups, is very small, the trend is as expected. Weight-based billing sends a price signal to business waste generators, and as a result encourages recycling and discourages waste to landfill,” Mike says.

“As indicated by all the studies around the world, if people get a transparent price signal, their behaviour is influenced.”

One research paper looking at WBB, published in the peer-reviewed journal the American Economic Review by Fullerton and Kinnaman (1996) , gathered data on 75 households in the city of Charlottesville, Virginia, using a unit-pricing system to measure and bill household waste. Households reduced their volume of garbage by 37 per cent and increased the weight of their recyclables by 16 per cent. Another Environmental Protection Agency study conducted by consulting firm STRIVE from 2007-13 found that weight-based charges were the most effective system of pay-by-use, when compared to a flat fee, tag-based charges (pay-by-lift/tags) and weight-based charges. It showed weight-based charges prompted the highest per household recycling levels, which were between 27 and 32 per cent. Mike notes that MRA’s interest in WBB is to improve business recycling. He believes it has more application and utility in the commercial sector rather than the household sector, where recycling rates are already high.

Mike explains MRA’s Hunter Valley trial involved three groups of businesses: a control group that remained on their usual volume-based service, another that received only education on recycling, and the third which received WBB with education. The groups of businesses were monitored before the program in 2016, and for six months after the introduction of the program, ending earlier this year.

EXPERT VIEW

Brenton Cunningham.
Brenton Cunningham.

Brenton Cunningham, Chief Executive Officer of the DiverseCo group of companies, has entered the market with AccuOnboard’s BinWeigh system. He says it is Australia’s only NMI-approved in-motion weighing trade system and the company has invested up to $250,000 in the technology. Brenton says companies typically use strain gauge technology – which is a type of load cell (a transducer used to send weighing signals) of the weighing system. Instead of using strain gauge technology, AccuOnboard engineers opted for force-coil technology, as testing in Europe showed more accurate readings. Brenton maintains that the most important variable the team considered was that WBB technology was scientifically accurate and fulfilled a need within the waste transport industry.

“When I viewed the technology in use in New Zealand with Stuart Knight, General Manager AccuOnboard, we asked ourselves, what’s so different about this? That’s when the penny dropped I discovered there was a different type of cell,” Brenton explains.

“The field of metrology is a science. It’s a precision weighing instrument at the end of the day, so there are factors we needed to consider when developing the BinWeigh system, such as how long do drivers generally stop for at a site and how easy is it for them to operate without affecting their normal duties? Another factor we considered is maintaining and lifting the bin without damaging the precision-weighing technology. Our reliable technology ensures the driver doesn’t have to focus on learning to be in a stable position. It just works.”

“The main thing we became aware of on this journey, and we already had an approved underbody system, was that while the NMI approval is most important, the critical thing is to make the system suitable for the ‘bash and crash’ waste sector. This is as opposed to trying and teaching drivers how to be measurement people. We have managed to bring measurement to the waste sector, rather than vice versa.”

Yet despite the significant investment, Brenton concedes that the challenge is getting the industry to comply.

“Because it is a new technology, there’s probably a 25 per cent price differential than other sorts of non-legal or static on-board products in the market.”

The challenges will be to adapt to the various configurations of a variety of vehicles, he adds.

“There will be ongoing engineering to suit the different lifters and trucks that we will come across.”

“We’re now in a position where we’ve had some trials done and we’ve got companies like REMONDIS saying it’s going to use our systems, so that’s a rubber stamp of approval for me.”


EXPERT VIEW

Headshot2017
Gerard Kissane.

Gerard Kissane, AMCS Group Head of ANZ Region, says the push towards WBB in Europe has been largely driven by the exorbitant cost of disposing of waste – affected by landfill levies. The company is currently working through the process of gaining NMI-approval within the Australian market.

AMCS Group has been involved in WBB since the company was founded in 2004. It has implemented WBB technology in its Ireland, Europe and US operations. Gerard argues its point of difference is processing both the bill sent out to the customer and weighing system used on the truck. “The guidelines here are similar to those in Europe, so we’re 100 per cent confident we’ll get an NMI approval soon,” Gerard says.

One hurdle the company sees is the manpower required to process WBB technology. In Ireland, there are no council contracts for residential waste collections. The market is fully privatised with each household having a subscription with a private collector.

“WBB is going to bring an additional administrative layer and I’m not sure all the companies looking at the technology are aware of it. The government is actually looking at making WBB a mandatory requirement in Ireland.”

Gerard explains that the waste collection system in Ireland is either by volume or weight-based, but a majority of customers are running a hybrid system. A heavy lifters allowance of up to 25kg protects the collector from losing money, taking into account the cost of running the service.

“Some people run a purely per kg charge, but there’s a service portion – there’s the cost of providing the bin itself, a vehicle to go visit your business and there’s the disposal of the waste itself. Some people run purely on a per kg charge, based on whatever is presented,” Gerard says.

“What we’ve seen is the most successful is a flat charge per lift that covers you up to a certain weight and per kg charge for any additional weight after that. The majority of our customers in the European market run such a system.”

Gerard says AMCS uses an advanced extensometer technology for front lift bins and certified load cell technology on its rear loader.

“There’s a variety of technologies out there, but at the end of the day it all comes down to reliability and accuracy over the lifetime of the installation based on the nature of the truck.

“I think the problem I see is the technology is there, but the solutions are based across a wide range of businesses. You’ve got one company doing the weighing and another doing the invoicing. The integration between the various systems is crucial to ensuring your billing is accurate.”

He says he’s been working with Superior Pak and Bucher Municipal to review lifter configurations to ensure the best accuracy possible.

EXPERT VIEW

Luke Aitken.
Luke Aitken.

Luke Aitken, National Sales Manager – Truck Mounted Equipment at Bucher Municipal, explains that WBB billing requires a high level of weighing accuracy and collaboration between the body and weighing system manufacturer. This is critical to ensuring a seamless integration between the two systems.

“We work very closely with the weighing system suppliers to ensure their systems are fully integrated into our bodies rather than being a ‘bolt-on’ extra. This minimises the amount of manual intervention required by the driver for the weighing system to function while operating our body, making it more intuitive,” Luke says.

“Integration is important not only from a physical point of view by ensuring drivers aren’t picking up overly bulky items, but for control. It’s about making sure there’s minimal additional screens and controllers in the cab and ensuring drivers are picking up bins as they normally would, but the weighing system is working.”

He says the company’s sales and aftersales team is on hand to ensure drivers understand the maintenance and functionality requirements of their new vehicle.

The biggest lesson, Bucher has learnt, is that accuracy depends greatly on the strength and stiffness of the compactor body it is mounted to. To achieve this, Bucher Municipal constructs its refuse bodies from strong, quality materials, critical to ensuring WBB requirements can be maintained throughout the vehicle’s working life.

“Some weighing systems are quite heavy so the design process is very much a balance between strength of components for weighing accuracy and the tare weight of the body for maximum payload capacity and efficiency. Our engineers use Finite Element Analysis software during the design, as well as real world testing of prototype units to ensure the accuracy of the weighing systems, and validate the strength of components to make certain they are safe for operators and the general public.”

Luke says the company is working with AMCS, Loadrite Scales, AccuOnboard and Botek to install their various systems onto Bucher rear loaders and front loaders.

Read the full story in Issue 13.