The Construction & Demolition Recycling Association (CDRA) held a conference call with several mixed C&D recyclers April 3 to discuss the impacts of the COVID-19 pandemic on businesses throughout the country. Among the topics discussed were the effect the pandemic is having on the industry, tactics recyclers are using to respond to and survive in this environment, and ideas for helping industry participants.
On how the virus is impacting volumes:
- According to the CDRA, everyone is seeing reduced volumes of material coming into their plants, even in those areas not yet hard hit by the virus.
- Northern California is seeing volume declines of 20 to 50 percent, Oregon volumes are down 10 to 15 percent, and New York City is seeing income volumes of just 20 percent.
- A couple bright spots reported include New Jersey and the Midwest, where there has been minimal reported declines in volume.
On how companies are working on social distancing:
- Companies report spacing on the picking line is being set at least 6 feet, even if that means skipping stations.
- This spacing is presenting some issues in terms of communication.
- Managing spacing during breaks and lunch has presented more of a challenge.
- Some companies are erecting glass panes at scale houses to minimize contact between scale and truck operators.
- Some companies are offering hazard pay to keep employees coming in.
On end markets:
- Most everyone with a plant operating reported that end markets are still viable, especially with cardboard as retail locations are shut down.
- Metal prices are down significantly.
- There is a fear that because of reduced volumes, end market participants may begin to look for other sources of materials.
On future projections:
- Most recyclers believe the worst is still yet to come, with expectations being that things might not begin to get back to normal until around June.
- There are two main considerations for businesses today: Total economic inactivity leading to little C&D being generated and companies not paying their bills.
- C&D recycling is a relatively low-margin business that relies on volumes to be successful. Without those volumes, some companies, especially smaller ones, will not survive.
- Some recyclers have had to initiate strict pay-as-you-go policies with companies that have fallen behind on their payments. This is expected to become a bigger problem in the future.
- Although the future of the construction market is murky, there will be a huge gap in business and revenues that will be difficult to make up no matter how much work comes back.