REVERSE LOGISTICS OF POST-CONSUMER NON-INDUSTRIAL WASTE

Reverse logistics is a topic of growing importance that has been changing market dynamics and worrying companies, government and society. Several reasons drive the relevance of this theme, such as the reduction of the life cycle of products, the advancement of information technology, the increase in electronic commerce and awareness of the need for sustainable development, mainly related to the scarcity of resources and pollution. environmental.

Reverse logistics can be defined as “the process of planning, implementing and controlling the efficient, cost-effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin, for the purpose of recovery of value or proper disposal” (ROGERS; TIBBEN-LEMKBE, 1998). This reverse flow can be classified into two types (Figure 1): after-sales goods and post-consumer waste, both with the same objective – recovery of value, whether economic, service provision, ecological, legal, logistical or corporate image (LEITE, 2009).

Figure 1: Types of reverse flow

 

Post-consumer waste reverse logistics (LRR) is the area of ​​activity of reverse logistics responsible for the management and operation of physical flows and information corresponding to discarded goods after their original use has ended by the first owner, returning to the business cycle or to the production cycle (LEITE, 2009).

Post-consumer waste can be of industrial or domestic origin, with the first case already at a more developed stage of management. This is due to the existence of related regulations since 1975, such as Decree No. 1.413, which provides for the control of environmental pollution caused by industrial activities. On the other hand, the LRR of domestic post-consumer waste is not yet as mature and has recent legislation.

In this context, the readjustment of supply chains into environmentally appropriate chains is inevitable, that is, into sustainable supply chains, thus meeting the three dimensions of sustainability: environmental, social and economic. Figure 2 shows how these dimensions are related and the aspects related to building value in a sustainable supply chain.

Figure 2 – Sustainable supply chain (Rogers, 2010)

 

The purpose of this article is to present the development of the post-consumer waste reverse logistics operation in the world and in Brazil, illustrating the involvement of several actors, mainly logistics service providers.

POST-CONSUMER LRR: OVERVIEW

Taking the subject of post-consumer waste, in Europe (EU 27), the generation of household solid waste represented about 8% of the total, adding up to 221 billion tons in 2008 (EUROSTAT, 2012).

Organic waste can represent from 28% to 58% of household waste, depending on the consumption habits of each country (CABRAL, 2012). Therefore, we can make an approximate estimate that post-consumer household solid waste should represent around 4% of the total solid waste generated.

Figure 3 - Representativeness and gravimetric composition of household waste

 

In the 1990s, legal and operational guidelines were enacted in the European Union for the reverse logistics of post-consumer waste for non-industrial consumers, based on which its constituent countries organized collection and recycling targets for each of the different groups of waste. defined (Figure 4).

Figure 4 – Development and organization of reverse waste logistics in Europe

 

Each of the EU countries has organized itself to meet the guidelines and goals defined through the development, in many cases, of its own governmental structure and legislation. Figure 5 illustrates the case of Holland, where the government interacts with industries and importers, who in turn organized management entities (non-profit companies) to manage the reverse logistics operation (GOORHUIS, 2012).

Figure 5 – Scheme of the Dutch structure for reverse logistics of post-consumer waste

 

The management entities are composed of an administrative team that is responsible for the management and financing of the reverse operation (collection, transport, sorting, commercialization, etc.). In general, the operation is completely outsourced, that is, the management entity hires companies or even the government to carry out the operation stages.

The producing companies (industries and importers) are affiliated to these entities and pay them a fee called “ecovalor”, to guarantee the necessary cash flow to operationalize the proper disposal of waste.

It is important to emphasize that, in light of the guidelines and legislation regarding the reverse logistics of post-consumer waste, the destination of waste is changing over time in Europe, which changes the flow of values. In Figure 6, for example, it can be seen that the use of landfills has decreased, probably due to directives that inhibit or prohibit their use. This illustrates the impact promoted by the legal direction and business organization taken so far.

Figure 6 - Destination of solid waste

 

In Brazil, in 1981, the law 6.938 National Environmental Policy was conceived. From this law, in 1990, several discussions began, which culminated in the formulation of the Water Law in 1997, in addition to Conama's revision of the criteria used for environmental licensing. In 2000, the law on the collection and disposal of pesticide packaging waste was regulated and, in 2010, the National Solid Waste Policy (PNRS) was established.

The Brazilian targets for the volume of waste that must be collected and recycled are still in the process of being defined. However, the goal of ending dumps/landfills is already foreseen in the law, a fact that should lead to a change in the representation of final destinations for post-consumer waste in the country in the coming years.

POST-CONSUMER LRR OPERATION

Figure 7 exemplifies a generic flow of post-consumer waste reverse logistics, containing the main needs of an operation of this type.

Figure 7 – Main questions to be answered when designing the post-consumer waste reverse logistics operation

WASTE COLLECTION AND SORTING

Basically, the collection of non-industrial post-consumer waste can be done through door-to-door selective collection and collection points. Each type of waste has a more suitable alternative, which provides greater adherence by the population.

In the Netherlands and Portugal, the selective packaging collection service is carried out by the municipalities and paid by the industry. Municipalities commonly outsource the service, hiring specialized logistics service providers. The costs of this operation are negotiated with the management entities, which pay the municipalities for this activity.

In Portugal, in addition to door-to-door collection, there are collection points for various types of waste, which can be at retail establishments or even fire departments. The implementation of these collection points requires negotiation with the establishments due to difficulties such as managing movement and space for storing waste.

It is worth mentioning that in some countries, such as the Netherlands, for example, the electronic material collection points are remunerated for the service of receiving and storing the waste, while in other cases this cost is the responsibility of the establishment. The management entity is responsible for negotiating and remunerating, when necessary.

With regard to collection equipment, there are the most varied types, depending on the waste and the operation designed: containers, cans, underground collectors, automatic and multi-waste, among others. The specificity of the designed collection process also extends to the vehicles to be used for transport. In general, common trucks are used with few adaptations, given that for most of the waste, pressing can be harmful to the recycling process. However, in cities that use underground containers, for example, the vehicle to be used is special.

In addition to the specificities of each operation, the requirements for transporting and storing waste vary depending on its characteristics and legal classification. We can highlight some regulatory topics (ANTT, 2010) such as: the need for licensing of installations and operations; monitoring through traceable records, according to the project previously approved by the bodies provided for in law or specific regulation; prohibition of the joint transport of dangerous goods with another type of category, among others.

In this context, logistics service providers that intend to operate waste must obtain specific certifications and licenses for each type of waste. Batteries, for example, are items that require a Cadri – Certificate for Handling Waste of Environmental Interest.

The availability of reports and special tracking services brings a competitive advantage to service providers in this activity, given the legal relevance of this item in the operation with waste.

In Brazil, some logistics operators already carry out post-consumer waste transport and handling activities, such as Translix, for example. However, the PNRS establishes the inclusion of collectors in the reverse chain. Currently, collectors' cooperatives do not have adequate structure to carry out high volume collection activities. They are not paid for providing services and earn only from the sale of waste. Its availability of vehicles depends on donations and financial support from third-party companies. In this context, several low-cost solutions for vehicles are found, such as bicycles and adapted motorcycles, for example.

After the collection stage, the waste undergoes, in most cases, a sorting or processing stage. It is at this stage that they are selected in order to meet the necessary requirements for their final destination. Packaging, for example, is organized according to the material it is made of, forming batches to be directed to the different recycling industries (paper, PET plastic, PP, PE, aluminum, etc.). In this process, an initial separation of “unusable” waste is already carried out, waste that cannot be sent for recycling or reuse, with, in some cases, the possibility of energy recovery (eg incineration).

Waste from electronic products goes through a differentiated sorting process, such as the so-called urban mining. In this process, electronic equipment has its components separated in order to make it possible to extract precious metals, such as gold and copper. In these cases, the operation tends to be automated, due to the wide variety of products to be dismantled and the materials involved. The separation of the components can be done through equipment that detects the different densities and characteristics of the materials, being a complex process.

In Europe, in general, sorting activities are carried out by specialized service providers, who use industrial-sized equipment due to the high volumes handled. In Brazil, currently, sorting is carried out by collectors' cooperatives, which are unable to invest in industrial-sized equipment or specialized labor. Service providers must emerge to meet the need in the Brazilian market and will have to deal with the legal obligation to include waste pickers in this context, indicated in the PNRS.

In addition to sorting, waste classified as hazardous must undergo decontamination processes before being sent for recycling or other destinations. Fluorescent lamps are in this situation.

CONSOLIDATION OF VOLUMES AND SALE OF WASTE

Currently, the volume collected by collectors' cooperatives is not sold directly to recycling industries. This occurs because there are few recyclers and they only buy materials in large quantities and of good quality.

In Brazil, the recycling chain includes so-called intermediaries, or middlemen, who buy waste from cooperatives, consolidate volumes and sell to industries, achieving better negotiation conditions in the sale price of waste. Table 1 shows the main requirements imposed by recyclers on their suppliers.

Table 1 – Cost per activity of the reverse logistics operation for electronics in the Netherlands (Vlak, 2012)

 

The implementation of standardized reverse logistics processes, under the supervision of management entities, can make it possible to organize these cooperatives, in order to consolidate volumes of waste for sale to recyclers without the need for intermediaries, which would increase the value of the revenue generated in the sale of waste. This consolidation of volumes can occur at transshipment and storage points, with the possibility of logistical operators participating in this step.

In Portugal, the management entity is the “owner of the waste” and is responsible for negotiating sales with recyclers. The revenue generated from the sale of waste is then used by this entity to deduct the costs of the operation. Another activity with great potential for adding value to waste is urban mining.

Considering the carrying out of activities related to the reverse logistics operation of waste, there is a new organization of agents in the supply chain, which brings with it challenges and opportunities for various sectors such as, for example, transporters, sorting companies, industries recycling and energy recovery.

To get an idea of ​​the amounts involved in these new opportunities, we can check Table 2, which illustrates the amounts spent on each activity in the Netherlands, for the reverse logistics of electronics. For a volume of 109 million tons of electronic waste, the total cost would be around 30 million euros, of which around 13 million euros are dedicated to the logistical operations of collecting, transporting and sorting the waste.

Table 2 – Summary of requirements imposed by recyclers on their suppliers (AQUINO; CASTILHO JR. and PIRES, 2009)

 

It appears that the resale of waste reduces part of the costs paid by the management entity; however, it is still not enough to generate a self-sufficient operation.

CONCLUSIONS

Transporting, storing and managing inventories, as well as other traditional logistics activities, are also necessary in reverse operations. Specific additional services such as sorting, waste processing and special tracking may be additional activities.

The volume to be handled in this type of operation is significant and the complexity is high, given that it deals with waste generated by the population and has a wide geographic dispersion, mainly in Brazil. This can be an opportunity and attract large providers of logistics services.

The challenge is to achieve a highly efficient operation, as the cargo handled has low added value, giving high relevance to topics such as operational scale, cargo consolidation and process automation.

The negotiation stage for the sale of waste is also a relevant challenge, as it is impacted by the quality of waste acquired at the end of the process, in addition to volumes (industrial scale; waste as raw material).

In this context, it is necessary to verify the possibilities of including collectors in the process, given the obligation indicated in the PNRS, and there is still no solution designed for this point.

Considering the shared responsibility, it is important to emphasize that, although the industry is responsible for remunerating the costs of the reverse logistics operation, this cost, or part of it, ends up being passed on in some way to final consumers. These must be aware that the amount they pay for a product includes the costs of the direct and reverse chain, and that this second cost can be a significant part of the total cost of the product.
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Authors: Gisela Mangabeira de Sousa and Yumi Fusse Madeira