American Dockworkers Are Savaging Your Recycling Bin.

Last year, roughly one-third of the recycling generated in the United States was exported to more than 160 countries and territories. That’s 42.8 million tons – enough weight to fill over 2 million standard-sized shipping containers – worth $23.7 billion. China was the top destination for those exports (Canada was number two), while South Korea, Japan, and India were in the top ten. So when, back in July, a labor dispute and slowdown hit US West Coast ports, one of its first and most significant victims was the multi-billion dollar trans-Pacific trade in recycling, much of which ships from those ports.

ContainersAtPort

In recent weeks, the toll – both economic and environmental – has started to come due. In San Francisco the city’s recycling contractor is running out of space to store recyclable paper and cardboard that typically ships to Asia, and the excess is piling up in mountains of cardboard. In neighboring San Mateo County, a different contractor, who also depends on shipping scrap paper to Asia, did run out of space – and the city had to lease it a 28,000 square foot warehouse to hold it. Meanwhile, two weeks ago, the California Refuse Recycling Council, a trade group, warned Governor Jerry Brown that its members might soon be forced to redirect all that California recycling to “disposal.” In other words: unless recyclers can start shipping to Asia again, a lot of scrap paper and cardboard might be landfill-bound.

Why can’t all those recyclables be recycled in the United States? The simplest answer is that Americans toss roughly 30% more stuff into their recycling bins than American manufacturers can make into new goods (and recycling, despite its green connotations, is always about making new stuff). Before the mid-1980s, that excess would often find its way into landfills, incinerators and – in the case of scrap metal – onto public lands. But in the late 1980s, China’s industrial expansion changed that equation (I describe this transformation in Junkyard Planet). Hungry for raw materials, Chinese companies started buying American scrap (and cleaning up the American countryside), exporting it from the West Coast, and transforming what Americans didn’t want into new products. In effect, the decline in American manufacturing quickened the exodus of American scrap to Asia and other emerging markets (and California, due to strict environmental regulations, doesn’t have much manufacturing at all, anymore).

However, it wasn’t just a decline in manufacturing that pushed American recycling to Asia. It also went because Americans import so much stuff from China, while making so little that the Chinese want to buy. As a result, there’s been a roughly three-decade-long surplus of empty shipping containers at West Coast ports looking for a cargo – any cargo! – to ship back to China. To remedy this situation, shippers typically discount “backhauls” significantly. During the 2000s, for example, the trip from LA to Hong Kong could be made for roughly twenty percent of the cost incurred going from Hong Kong to LA. In fact, it’s invariably cheaper to ship a container from LA to China, than it is to ship by rail or truck over the Rocky Mountains. West Coast recyclers have told me that the month-long journey back to Asia could be had for as little as $100 per container – so long as you were chartering an entire container vessel, as at least one big paper recycler reportedly did over the years. Under those circumstances, anyone recycler located more than a $100 truck ride away from LA – basically, everyone in the US – loses.

In the three decades of the trans-Pacific scrap trade, there’s been only one major disruption prior to the current one. It happened in fall 2008, when the price of commodities – including scrap metal and paper – crashed in the wake of the global financial crisis. In the resulting loss of consumer confidence, American and Europeans stopped buying Chinese-made goods and – as a result – the Chinese stopped buying American and European scrap to make into new goods. By early 2009, recycling warehouses across the United States – lacking markets for their paper – quietly landfilled and incinerated countless tons of it.

The current crisis with West Coast ports isn’t nearly as dire as that one. Unlike then, China and other developing economies still want US recycling, and the Gulf Coast and the East Coast ports can send it to them. But that’s little solace to recyclers across the United States, who will soon decide it’s cheaper to landfill – rather than recycle – the recycling.