With UPS's green disposal network, old electronic equipment doesn't go to waste

Good question. The typical company is awash in e-waste: desktop computers, laptops, servers, hard drives, cable, keyboards, telephones, cell phones, routers, switches, printers and even media like CDs. Companies have reason to care about what happens to all that e-waste.

Of course, environmental concerns are front and center. The lead in computer monitors, the mercury in circuit boards, the beryllium in copper fittings and other materials can be toxic when disposed of improperly. Plastics and other components can languish for decades in landfills. And increasingly strict regulation around the world regarding the disposal of e-waste can leave companies legally and financially liable.

"E-waste is certainly a big environmental concern," says David Guernsey, senior sustainability program manager at UPS. "But there can be other consequences. When equipment with your company name on it turns up in an environmental scandal, your company’s reputation and brand image can be devastated."

There are additional business incentives to improve e-waste management. "A lot of money is tied up in electronic equipment, and organizations need to get these assets off the books while hopefully recouping some of the costs," says Robert Gamer, purchasing supervisor at UPS. "This equipment also takes up a lot of space. And you have to worry about the confidential data and information on the devices that might be exposed."

Old Approach
UPS should know. Since 2000, UPS hassold or recycled about 24.5 million pounds of e-waste in the United States alone.

Before UPS redesigned its e-waste disposal network in 2000, the preferred option was to ship e-waste to UPS’s Louisville hub, where it was either repaired or sent to a vendor for recycling. This e-waste approach had definite business downsides, including the high cost of transporting relatively heavy items from all over the country to Louisville. Also, with so much equipment gathering in one place, it wasn’t easy to determine which equipment to repair and which to recycle.

"At UPS, our culture is to do the right thing," Gamer explains. "And the right thing to do was to use our logistics expertise to design an integrated, efficient and environmentally-sensitive e-waste disposal network."

Leveraging Logistics A team made up of Gamer from information services, Guernsey from corporate environmental affairs and a staff member from corporate legal set about designing a new disposal network in 2000.

The first step was to decentralize e-waste collection. Equipment that could be repaired was shipped to Louisville. The rest was transported to the nearest of seven consolidation sites around the country. These sites are co-located at existing distribution centers that are part of UPS’s logistics network. "The consolidation sites collect and palletize the e-waste, build loads and then send them off to our regional e-waste recycling vendors," explains Guernsey.

UPS also built a custom Web application that UPS employees sign into when they need to know what to do with a piece of e-waste equipment. By entering the serial number, the employee ascertains where to ship the item. The Web application automatically prints out a shipping label for UPS ground transport to the nearest UPS consolidation site. "We’ve taken the guesswork out of following e-waste policy," says Gamer.

Selecting recycling vendors was perhaps the most critical step in the redesign, says Gamer. "The hard part wasn’t setting up the logistics network — that’s the business we’re in. The challenge was to find good, ethical recycling vendors who offer a fair price." Unfortunately, he says, when it comes to evaluating vendors, everybody is on their own. "There’s no stamp of approval from the EPA or another third party."

Guernsey adds that companies have to not only vet the e-waste recyclers but also check out each recycler’s downstream vendors. "If one of their vendors somehow takes a shortcut, we still may end up with some responsibility."

Ultimately, UPS contracted with e-waste recycling vendors at seven regional sites around the U.S., close to the UPS consolidation sites. This regional approach helped UPS reduce its transportation costs.

Zero Landfill
Once the equipment reaches a recycling vendor, virtually nothing goes to waste. A highly choreographed process separates resalable items from recyclable ones. A giant crusher pulverizes each piece of recyclable equipment. For instance, a laptop going in the front end comes out the other end in pieces the size of cornflakes. Then, a powerful magnet draws out the metal fragments for further refining. There are also machines to sort and break down the plastics, leaded glass and other hazardous materials.

With the component materials in their most basic states, the vendor sells the raw materials and returns a portion of the proceeds back to UPS.

"The goal of all of our e-waste vendors is to contribute zero landfill," says Guernsey.

Not all UPS’s e-waste is recycled. Some used equipment is refurbished, its data wiped clean and resold to recoup some of the original costs.

Reaping the Benefits Now several years in operation, the e-waste disposal network is running smoothly. Gamer says that UPS continues to audit its e-waste recyclers. Surprise visits for audit purposes are allowed by contract, and paperwork that tracks every piece of equipment throughout its recycling trail is required.

In addition to the environmental benefits and lower transportation costs, the e-waste network helps pay for itself. The money UPS gets back for sale of recycled materials — along with proceeds of direct sales of functional equipment — usually more than offsets the costs of the recycling program (depending on the fluctuating market prices of raw materials and used equipment).

"Our main motivation is to do the right thing as good corporate citizens," says Gamer. "Any money we make on top of that is gravy."

UPS is close to completing a similar e-waste network in Europe and has plans to expand the program to operations in other continents.

"This is a complicated process," cautions Gamer. "My advice for companies considering the development of their own e-waste networks is to consider hiring experts who have been there and done that."