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Export Regulations Creating Cleaner Corrugated

By Ken McEntee
Mills and recyclers are addressing declining fiber quality and growing contamination levels in the OCC stream. Many worry whether one-bin collections will become prevalent.

My curled fingers retained their firm hold on each side of the box through its oval carrying cutouts. But as I stood behind the open hatch of my minivan in the parking lot of the home improvement store, the package suddenly felt 80 pounds lighter than it did a moment earlier, and the ground below me was instantaneously littered with the shattered ceramic pieces of a Chilean-made commode.

After the retailer provided a replacement, I took care to carry that box by securing it from the bottom.

As this episode demonstrated, fiber strength is critical to the containerboard that makes up corrugated boxes. That’s why it’s important that the feedstock that goes into containerboard—whether virgin or recycled fiber—is up to quality standards.

“Garbage in is garbage out,” emphasizes Marty Rusk, vice president of Smurfit Kappa North America Recycling, a division of Smurfit Kappa Orange County (Mesquite, Texas), which produces 100-percent-recycled linerboard and medium in Forney, Texas. “We’re very cautious about what goes through our pulper because we compete with virgin liner, and we want the best corrugated fiber [that’s] out there. That’s why we have always been pickier than the average mill in the market. Our standards are very high.”

That’s also why Rusk developed his own network of recycling centers more than 10 years ago, when Corrugated Services operated the Forney mill. “By building a recycling plant infrastructure, we were able to control our own destiny,” Rusk says. “When a MRF [materials recovery facility] or any processor can’t conform to our quality requirements, we have the ability to say no. I can always run more material through our own facilities.”

Mill procurement agents and their suppliers say the most common old corrugated container quality complaints relate to increasing volumes from single-stream MRFs, short-fibered OCC from Asia and other regions outside of North America, and moisture content.

High MRF Costs, Low OCC Value

When residential curbside programs began to take hold, the urban forest of recovered fiber consisted largely of old newspaper. Today, the decline of newspaper readership, along with the growth of online shopping, has made OCC the dominant grade coming out of U.S. neighborhoods, traders say.

Although the OCC that comes out of single-stream MRFs may not be “ideal,” the quality has improved in the past couple of years, says Waste Management Recycle America (Denver) Western Region Market Director Steve Wilson.

“It used to be that some mills didn’t want to buy corrugated from single stream,” Wilson says. “That is no longer the case. Everybody seems to run it now. There are some differences in the material compared to some other sources. There may be some boxboard in there, and some other paper that [mills] don’t necessarily want. The challenge to the single-stream MRF is the quantity of smaller-sized boxes—like the little boxes from Amazon—that MRFs are not well designed to mechanically pull out.” Because small OCC falls through the mechanical screen separators, it “ends up in the paper stream where labor is required for removal,” he explains. “With increasing volumes of small OCC and decreasing volumes of [old newspaper], some MRFs have skipped this additional effort and switched from making ONP to mixed paper, where the small OCC is acceptable.”

Rusk says MRFs today are challenged by high production costs that the selling prices of OCC and other recyclables don’t cover.

“In the beginning, when the market was really strong for all recyclables, and haulers and recycling companies were putting their new processing systems online, quality was a lot better,” he says. “When [selling] prices went down and [MRFs] were trying to reduce their payroll to keep up with budgets, it [became] a big problem. Source separation was discontinued in favor of more efficient single-stream collection, whereby the haulers saved a lot of money on the hauling side but transferred the additional sorting cost to their processing centers. If the huge regional processing centers are not making money, they are going to try to find ways to become profitable. When you have $80 [a ton] OCC, it might be an issue as far as putting on [the picking line] the proper amount of people and putting in the time needed to make the best OCC. We are thankful for the MRF operators contributing to increasing the recovery rates and keeping up with industry growth, but we sincerely encourage the MRF operator and other recycling companies to work with the end user/customer/mills as well as their source of supply to ensure the product meets the mills’ needs in both volume and quality.”

Simply put, single-stream collection makes processing OCC too expensive compared with current OCC values, says Johnny Newsome, manager of the Recycling Division of Sonoco Products (Hartsville, S.C.). “You need to operate at slower speeds to make a clean bale,” he says; “the equipment is expensive to purchase and maintain; the per-ton cost to operate has gone up; [and the] selling price has gone down, [so] there is little to no money to be made in the MRF business. People don’t run businesses when they can’t make money.”

Is “Asian” Fiber an Issue?

Most fiber buyers consider U.S.-made corrugated the strongest available due to its high virgin fiber content relative to corrugated boxes made in China and other overseas countries. However, OCC coming from major retailers typically contains a large percentage of boxes made in China, which generally are made from 100-percent-recycled fiber.

“If you’re going to buy from a paper recycling plant, you’re just not going to get material without Asian fiber in it,” Rusk says. “Most products are being manufactured in China today, so that’s where a large percentage of the boxes are going to come from. Fortunately, the quality of Chinese boxes is improving, but there is still a lot of it out there that seems like it’s made from old newspapers, mixed paper, [and so on]. You can tell the difference because when you rip it, it tears apart very easily and is full of short fibers. It may look similar, but the bottom line is, the shorter the fiber, the weaker the board.”

Newsome also says Asian OCC has increased in the domestic supply over the past five to 10 years. The boxes usually can be identified by their grayish color, he adds.

“To us, Asian board is not No. 11 OCC,” Newsome says, referring to the ISRI specification for that grade. “We can’t take a whole load of it to the pulper. When we get it, we have to segregate it in storage, and we have to treat it similar to how we would treat mixed paper. We have a specific formula that we blend in, and we will pay less for it than we do for a good Grade 11.”

Asian OCC, or short-fiber OCC, is particularly problematic for mills like Smurfit Kappa Orange County, which produces 100-percent-recycled board, Rusk explains.

“If you have a mill that can control long fiber content by adjusting the ratio of wood chips and OCC, the impact isn’t as great,” Rusk says. “But I can’t run it in my system because we need to have the long fibers to achieve our high quality standards. If it comes in as No. 11, depending on the circumstances, we might reject it or downgrade it to mixed paper. Or maybe we can divert it to a mill that is able to use it.”

In February, ISRI’s Paper Stock Industries Chapter hosted a summit in Dallas to discuss possible changes to the organization’s paper stock specifications. One change they addressed was whether to create a specific grade definition for “Asian” or “foreign” OCC. The consensus, however, was that OCC grade definitions should consider fiber quality rather than the source of the fiber.

Mills Demand Less Moisture

Moisture content is a decades-long issue, traders say, although some mills recently began enforcing moisture standards more rigorously.

“Nobody wants to buy water,” observes Greg King, senior vice president and general manager for recycling at WestRock (Norcross, Ga.), the paper and packaging company newly formed from the merger of RockTenn and MeadWestvaco. Generally, the industry standard limits moisture to 12 percent in a bale, but that can vary from mill to mill. “In the South, for example, we have heavy seasonal rain, and a lot of our supply is on bale routes; therefore, we monitor more aggressively for moisture content compared with mills in drier climates like the West Coast,” he says.

Moisture claims are a greater concern than a couple of years ago, particularly for export orders, Newsome says. He questions the accuracy of current probe-testing methods.

“You can probe the same bale in 10 different places and get 10 different readings,” he says. “Moisture is the big unknown for the industry. It is very subjective, and it can be manipulated very easily. When the market is going up, and the material is in demand, claims are down. When loads are backed up [due to less demand], claims go up.”

Wilson agrees that inconsistent testing with probes is a big problem. “You can keep measuring until you get the measurement you want,” he says. “It is getting to be a bigger issue than it was. People are always trying to find a way to buy tonnage at a cheaper price, so moisture claims can sometimes depend [on] how [badly] somebody needs the fiber at the time.”

Newsome advocates having a different moisture baseline for export shipments than for domestic orders. The reason, he says, is that containerized bales can pick up moisture while on the ocean en route to their destination. That point was heavily debated during the PSI specifications forum. One participant, who represented a Chinese mill group, argued that shipping containers are airtight and therefore their contents will not absorb moisture from the external environment.

“Paper is like a sponge,” Newsome counters. “Common sense will tell you that if it is going to sit in a container for 45 days in a high-humidity area on a boat on the ocean … it is going to absorb moisture. Exporters I talk to say that it could be [a difference of] 3 to 5 percent.”

Rusk says the Smurfit Kappa Orange County mill in Forney generally accepts up to 11 to 12 percent moisture.

“Normal moisture content in the air is around 8 percent,” he says. “We leave a little buffer before we take deductions [for moisture] over 8 percent, which is similar to all the other mills in our region. I do know of one mill that starts deducting if you’re over 9 percent, but we feel that is unrealistic.”

The Smurfit Kappa mill in Forney last year replaced moisture probes with digital moisture meters—an AP 500 model from Emco (Leipzig, Germany)—designed for recovered paper.

“It works so much better than a probe,” Rusk says. “It covers a broader area of the bales (up to a depth of 20 inches into the bale) instead of one spot and more limited depth like a probe would.”

Enforcing Higher Standards

Although traders generally acknowledge the importance of industrywide guidelines to serve as a basis for quality expectations, most agree that it is up to each mill to set its own standards, then foster a good cooperative relationship with its suppliers to be sure that they are meeting the standards.

“There is always the point where somebody comes along at the mill and says they have to improve their fiber quality, so they hire somebody to do quality assurance,” says Ken Rasmussen, sales manager at CasCell Trading Group (Surrey, British Columbia). “A lot of mills are doing that. But sometimes along the way, the quality control goes out the window. Maybe the person doing it retires and isn’t replaced, or there is a reorganization and it falls through the cracks.”

Random inspection of incoming loads is part of most quality-control efforts, Rasmussen says.

“Somebody will take a representative sample bale [from] every load,” he says. “They weigh it and break it apart and try to do their due diligence. Maybe one day it will be the seventh bale off the truck. Every day it’s something different, so the supplier can’t figure out where they need to put the good stuff.”

The quality-control program of Smurfit Kappa Group’s Forney mill begins with the certification of each supplier.

“We frequently tour [the supplier’s facility] to see how they sort their materials,” Rusk says. “We educate everyone in the process where we can, then we monitor incoming shipments and [use] our testing procedures at the mill to ensure the required quality is met. PSI standards and practices require a certain level of quality, and we want to maintain that. We also encourage our suppliers to tour our mill so they might better understand our quality standards and why sorting out unwanted material is so critical to our ability to make high-quality containerboard. Every mill has its own unique problems with one contaminant or another: Ours is wax. So we have always [held our suppliers] above and beyond the standards for quality when it comes to wax content.”

Rusk says strict quality standards by one mill or mill group—particularly a high-volume buyer—can improve the overall market supply.

“A couple of years ago, Asian mill groups tightened up their programs for moisture and quality, and that’s excellent because that helps all mills,” he says. “If a supplier ships to three different locations, and one accepts the lower quality or high moisture content [material], it is bad for the rest. One major integrated mill group with a lot of purchasing influence recently cracked down on quality. They analyzed their whole system and started from scratch. They wrote procedures, trained their people, set standards, and notified all their suppliers as to what the procedure was. They did it the right way—not just by suddenly making rejections. We highly support that.”

Although Rusk didn’t name the group, he was probably referring to WestRock, North America’s second-largest containerboard producer.

Educating New Suppliers

Retailers, municipalities, and other fiber-scrap generators who are not recyclers are the ones toward whom the ISRI paper specifications should be aimed, some traders say. Several participants of the PSI Specifications Summit expressed that view as well. These “new generators” need to be educated about the specifications and about what is or is not acceptable in a corrugated bale, the summit participants said.

In general, supermarkets generate clean, consistent bales of OCC, while retail-store bales are more likely to contain unwanted materials. You can see the difference in OCC a typical Walmart generates, Newsome says.

“Walmart produces bales from their grocery side that are good-quality grade No. 12 double sort, and we pay more for them because they are consistent, with more fiber and minimal moisture,” he explains. “Their retail side is more likely to have a lot of Asian fiber” in its bales, he says.

According to Rasmussen, however, getting clean supermarket bales also requires some education.

“You do have to train them to keep certain things out,” he says. “Overall, the quality of supermarket OCC is pretty spectacular.”

Rasmussen says getting quality OCC is less about tweaking the recognized grade specifications than it is about developing a good relationship with your suppliers.

“When you want to supply a mill, you show them five representative loads of your product, and they either accept it or they don’t,” he says. “If they like it, then you can negotiate the price and go from there. I don’t see the point of overcomplicating the grade definitions.”

The Next Challenge

Even as PSI works to revise its paper stock specifications, the rise of “dirty MRFs”—which process commingled garbage and recyclables—is presenting the industry with perhaps its greatest challenge yet.

“We are adamantly opposed to the ‘recycling’ role that dirty material-recovery facilities offer, largely in order to protect the quality of the recycled fiber stream,” King says. “This is already a reality because these facilities are out there. It limits the paper supplies for paper mills, and you have to be conscious of biological contaminants in the fiber stream. The United States is the breadbasket for the world; a lot of old corrugated containers go into food packaging, and we have to protect fiber quality. It is a battle that, if we are not successful in winning, could mean putting the domestic fiber supply at risk of not meeting standards.”

Ken McEntee is the Strongsville, Ohio–based editor and publisher of The Paper Stock Report and other business periodicals. This article originally appeared in the July/August 2015 issue of Scrap magazine. Reprinted with permission.

One Mill’s Approach to Quality

WestRock recently implemented a companywide quality-control program aimed at improving the quality monitoring and tracking of its inbound recycled fiber. The company adapted the program from one instituted by WestRock’s Solvay Paperboard mill (Syracuse, N.Y.), a containerboard mill the company acquired in 2008, and the resulting savings have been “traceable and very meaningful,” according to Greg King, senior vice president.

The Solvay mill based its quality-control process on “research from the yields of various fiber supply points,” King says, “and, in order to meet the specifications they needed for linerboard and corrugating medium, they adopted a recipe and focused on sourcing the right fiber for the mill’s needs.”

The process “inspects and validates the materials coming into the mills by supply point,” King says. It begins with a visual inspection of the incoming bales, with the ISRI specifications as the foundation. “Every person at the receiving dock is trained in observation and grading so the paper can be graded at the point of receipt,” King says. “You can’t expect one person to be responsible to inspect every load, especially when you’re doing hundreds of loads a day at the larger mills.” If the bale’s exterior appearance causes a concern, the inspector may have it broken open for further examination.

WestRock holds its own 23 recycling facilities to the same standards as it holds outside suppliers, King emphasizes. The company’s recycling plants supply recovered fiber to its own mills and other mills in the United States and overseas.

“Loads coming into the WestRock mills all go through the inbound quality-control process,” he says. If the inspectors believe a bale is not of the quality the supplier said it was, “then it is documented, photos are taken, and communication goes back to the supply point.”

Inspectors classify OCC bales beyond the ISRI specs into sub-classes based on their fiber content. “Something that would come out of a single-stream facility, for example, tends to have more mixed paper content than what you would expect from a grocery bale. The objective is achieving the highest yield and quality of output on a consistent basis,” King says.

WestRock’s quality-control program “has been well received” by suppliers, King says. “We educate before we enforce. We work with suppliers and give them the data before we take stronger action. It helps the recycling plants to be more cognizant of what is going into the supply stream. Even large accounts that generate and bale OCC that are not recyclers have been very receptive.”

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