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Volume 9, Issue 5
September / October 2012
Security Shredding Storage News
Serving the Security Shredding & Paper Recovery Markets Visit us online at www.securityshreddingnews.com
ATTENTION: READERS !
Are you looking for Products, Equipment or Services for your business? If so, please check out these leading companies advertised in this issue: Collection & Storage Containers Big Dog Shred Bins – 10 Bomac Carts – pg 5 Jake, Connor & Crew – pg 12 Mobile Truck Shredders Alpine Shredders Ltd – pg 3 Shred-Tech Limited – pg 5 ShredFast – pg 8 Vecoplan LLC – pg 10
Shred Companies Sound Off Over Cut-Rate Shredding Services
Moving Floor System Keith Manufacturing – pg 11 Paper Balers IPS Balers, Inc. – pg 7 Replacement Parts Dun-Rite Tool – pg 12 ShredSupply – pg 9 Stationary Shredders & Grinders Allegheny Shredders – pg 11 UNTHA America – pg 16 Waste commodity purchasers Dan-Mar Components – pg 4
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By P.J. Heller
PRSRT STD U.S. Postage
PAID
Mentor, OH PRSRT STD Permit No. 2 U.S. Postage
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Mentor, OH Permit No. 2
ocument destruction companies have been doing more than shredding papers in recent years. They have also been shredding their prices in an effort to attract new customers and keep existing business, hoping to make up the revenue shortfall with the resale value of the paper they collect. “We actually have people bidding to do the shredding free, with only the value of the recycled paper as revenue,” says Ray Linzy, chief financial officer at Absolute Secured Shredding near Sacramento, Calif. In one case, he reports, a document destruction company won a state contract in California by actually offering to pay the agency for its shredded paper. “This is obviously a foolish strategy when paper prices are so volatile,” Linzy warns. “They seem to ignore the fact that it is easy to lower prices but difficult to raise them back to profitable levels as paper loses value.” Both large national document destruction companies and small local shredding businesses come in for criticism by some in the industry for driving down prices to near unsustainable levels. Such moves are driven by a variety of factors including growing competition by national and local firms, high paper prices and a tough economy where document destruction companies are struggling to survive and their customers are looking for rock-bottom prices. As soon as one shredding company cuts its prices, others tend to follow, slashing prices even further to remain competitive and to get work.
“You can go broke for a lot of reasons, and having your trucks sit idle because you never get any work would be the biggest one,” says Linzy, who admits that prices at his company have dropped 25 percent to 30 percent in some cases but adds, “We’ve never done a job for free and we‘re not going to.” “Some document destruction companies in my opinion are irresponsible,” he says, noting that they fail to take a long-term view of the industry. “They’re all short-term oriented. It makes it real tough. It’s easy to push prices down but it’s going to be hard to get the prices back up.” “Our problem has been major companies offering free service for paper, rebates for market share and small owners at 50 cents a box to stay alive,” says Dale Kasel, director of sales and
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Inside This Issue
4 Cold Comfort The U.S. market for recovered
paper is shrinking but still sizable. Tissue products are one bright spot on the horizon for recyclers seeking domestic consumers
12 HSS to Collect $3 Million for HIPAA Violations 13 U.S. EPA Challenge Stimulates E-Waste Recycling Industry 14 Military Medalist Social Security Numbers Found Posted Online