New York is preparing to adopt multiple policies that guide supply chain practices toward increasingly reusable and efficient supply chain operations. Similar to how it introduced new proposed rules for how producers will be responsible for items after they are delivered, NYC is introducing commercial waste reform policies that further specify how waste will need to be separated, transported and reported to the state.
NYC’s new commercial waste reform law provides logistics companies an opportunity to better consolidate shipments, with larger volumes of materials being shipped at a time. Being able to track shipments at each step will provide logistics companies with the ability to provide more consistently low-cost services to customers.
Changing Packaging Laws at the State Level
Currently, New York State legislators are aggressively encouraging and drafting legislation similar to Extended Producer Responsibility (EPR) that requires companies to design packaging products with the goal of promoting re-use and tracking how companies recycle their packaging at its end-of-life.
The NYC Commercial Waste Programs (CWP) are changing how commercial waste is collected and organized. They focus on creating a more organized way of collecting commercial waste, using a zone-based contract for the entire City. The CWP is also aimed at reducing commercial truck miles and creating a uniform level of service for all commercial collection services throughout the city.
By standardizing commercial waste services, businesses will change how they calculate their marginal costs for pick-up in the CWP: businesses operating in the CWP will likely start using different pricing models for CWP deliveries due to the new contractual requirements.
With the Manhattan ‘Congestion Pricing’ program, businesses are experiencing significant increases in operational costs (e.g. fuel/salary costs) for transporting products to and from the CBD. The new pricing structure for Manhattan also creates a cash flow incentive for many businesses to use consolidation, and creates incentives to reduce the number of trips through the CBD.
Here is how these policies impact circular logistics:
Higher Per-Trip Costs Make Reusables More Attractive
As tolls or surcharges have become predictable for the delivery or pick-up of goods into Lower Manhattan, it is natural for businesses to want to increase their ‘value’ on each trip they make. Reusable crates and consolidated loads reduce costs per unit on each trip, and the amount of trucks required to deliver those units.
Zone Contracting And Regulation Lead To Consolidation Opportunities, Routinization, And Better Delivery Routes
The Commercial Waste Zones program allows haulers to receive contracts based on geographical boundaries and standardized service. It reduces the need for ad hoc or emergency delivery trips and allows for the establishment of location-based Consolidation Hubs and predictable reusable return visits. Consolidation hubs will only succeed where haulers are contracted to provide services, and there is a reliable route.
Producer-responsibility Rules Push Material Accounting And Take-back
Packaging Stewardship and EPR proposals establish a requirement for businesses to track and report on the movement of packaging through the distribution cycle, thereby increasing the value of tracking information for those materials and their reuse. Standardized reusables are easier to account for and recover than non-standardized disposable packaging.
One of the most important steps businesses must take in response to these policy shifts is updating their contracts and terms of sale to reflect New York’s evolving waste, packaging, and congestion regulations. These agreements should clearly define responsibility for lost or damaged reusable assets, reporting frequency, congestion-related surcharges, and compliance obligations under EPR and Commercial Waste Zone rules. To ensure these clauses are enforceable and aligned with current New York regulations, businesses should consult a contract lawyer when drafting or revising their agreements.
Endnote
New York State’s policy changes represent an actual operational/financial incentive to know how to properly manage products with waste-free logistics, providing economic disincentives for inefficient trips and rewards for predictability and high product recovery. The most effective strategy will be practical – conduct pilots, track performance and data, and then put the proper reporting/ liability language into contracts, to position for reuse after the economic basis for reuse becomes clear.
Rick LeBlanc, EMBA, is the founder and editor of Reusable Packaging News (subscribe to the free newsletter) and editor of Western Pallet Magazine. A supply chain journalist with more than 30 years of experience, he specializes in pallets, reusable packaging, material handling and related operations. Rick is co-author of Pallets: A North American Perspective and Pallets & Progress: A Collected History of Pallets and Palletized Handling 1922–1945. He is also an advisory board member of the Virginia Tech Center for Packaging and Unit Load Design. Read Rick’s full bio.
