Although Lakeshore Recycling Systems is less than a decade old, the Chicago-based company has already made an impression in the waste and recycling space. When Lakeshore Waste Services and Recycling Systems Inc. merged in 2012 to form the company, its first year consisted of a couple hundred employees and nearly $50 million in sales. Fast-forward to today, the company’s nearly 1,000 employees and $184 million in revenue in 2018 has earned it the No. 21 spot on Waste Today's inaugural Top Haulers List.
Lakeshore Recycling now operates a growing fleet of natural gas-powered trucks and four material recovery facilities, servicing thousands of residential and commercial customers, including all 642 schools in the Chicago Public Schools system.
Waste Today magazine caught up with company CEO Alan Handley on the company’s latest growth and what he sees for its near-term future.
Waste Today (WT): What technology have you implemented over the past five years that you think has contributed to your success?
Alan Handley (AH): We did a large RFID [radio-frequency identification] implementation in Chicago about four years ago, which I think has allowed us to gain a fairly significant market share in areas where
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sustainability and recycling are probably closer to the forefront [of people’s minds] than maybe in the general population. It's embedded in all of the trash receptacles for a community, and then when those trash receptacles go over our readers that are mounted on our trucks, it bills you by how much you actually throw away versus just billing you a set amount each month. So, that's been extremely helpful for us, and it helps with the people who are generally more progressive and really want to try to change the recycling algorithm that's present in the trash collection cycle.
We're also continually looking for ways to introduce automation, whether it be robotics or other forms of automation, to lower the cost of recycling so that we can make it more sustainable in the longer term because the cost keeps creeping up. The way we view it is that the only way to really make recycling sustainable in the long-term is to reduce the cost of recycling going in and reducing the labor associated with it.
WT: How big of a focus is merger and acquisition activity for your company and why?
AH: It's a big part of what we do. Organic growth is great, but it takes a little bit longer, so we've been aggressively growing through acquisition over probably the last six years. We've completed 12 acquisitions throughout Chicago, in western Illinois and then into southwestern Wisconsin. And we continue to have a pretty active pipeline as well. We probably have close to $400 million of acquisition targets, and we have probably two or three deals that we'll close this year. So, it's a big part of what we do, augmented, of course, by growing the organic side of our business.
WT: What do you think it takes to be successful in the waste business?
AH: I think for me and for the company as a whole, we have found three main things to be very successful. One is a continued emphasis on our people. It's a tight labor market, and it's hard to find good, qualified talent. When we do find them, we want to make sure they have a good, meaningful career with us and that we provide an opportunity for them to grow with our company. So, we spent a lot of time and focus effort and energy into really developing our people and making sure we have a good pipeline of talent as we look forward. That's been a big emphasis for us, and I think it's key to the future.
The other thing that we've been focused on is hauling safety. I know everyone talks about it a lot, but we run in a very urban market in Chicago and in some other areas in southwestern Wisconsin, and I can't overemphasize the need for our drivers and the general population to come home safe every night. We put a lot of time and effort into making sure that is addressed and that it's at the forefront of everyone's thoughts. The people are critical to my success and the company's success. We can't do it without them. We can't do it if they're not safe.
I think the other one is that we really do have a culture that we've developed of trying to be as innovative as possible: embracing new technologies, listening to our customers and making sure that you don't just do things the old traditional trash way. A great example is when Highland Park came to us, a large suburb north of Chicago, and they wanted that RFID technology because they wanted to only have people pay for what they threw away and not penalize them for recycling. And so we work with them. We spent many six figures to develop that program, whereas everybody else told them that they wouldn't do it. So, I think by doing that—by listening to people's ideas and what they're trying to accomplish and focusing on that and making that a priority—I think that has helped us really create a culture of saying, "Hey, let's think about that. Does that work? Does it make sense? Can we all make money doing it? Can the company and the community achieve what they're trying to accomplish at the same time?" And it goes for our customers as well. So, I think those three things are really the hallmark of who Lakeshore is, and I continue to press for all three of those things in earnest pretty much every day.
WT: Can you talk about any notable sustainability initiatives or investments you’re planning on making in the future?
AH: We probably recycle more material than any other company, I would argue, in the Midwest. We control close to 2.5 million tons of material to come through our facilities. It's very close to 35 to 40 percent of Chicago’s and southwestern Wisconsin’s waste stream, and out of that material, pretty close to 50 to 60 percent is recycled or diverted. Our entire corporate DNA and everything we talk about is how we keep material from going to the landfill. I'm pushing to try to find end products for about everything we possibly can.
So, everything that we do in our company is a sustainability initiative. It's really why I think we've been very successful over the last six years or so. We are very different in the market from pretty much anybody else you can think of. It’s mostly because from the very founding days of our company, we set that out to be our goal—that we wouldn't sacrifice environmental stewardship or sustainability for profit. And we believe in that. They really aren’t mutually exclusive—you can be profitable and do the right thing for the world.
"We really do have a culture that we've developed of trying to be as innovative as possible: embracing new technologies, listening to our customers and making sure that you don't just do things the old traditional trash way."
-Alan Handley, Lakeshore Recycling Systems CEO
WT: How has the hauling business changed over the years, and how has your company remained relevant in that time?
AH: I think it's dramatically changed, at least in the markets that we operate in, in the short time that we've been a company. I mean, you look at things like the tightening of the labor markets and automation and technology, and I can't believe how much things have changed just in the last five years. There's a host of things, both good and bad, that we face every day. Frankly, we struggle to continually recognize them, find ways to overcome them and [find] the keys to thrive.
For instance, drivers: It's very hard to find drivers, and safety goes hand-in-hand with trying to find good drivers. So how do we tackle that? Then you have minimum wage issues in Chicago—it was $8 or $9 an hour in 2012, and now we're pushing that a $12 or $13 an hour. So, while it doesn't sound like a lot in absolute dollar terms, when you're talking about the number of employees that we have that work at that level, it has a dramatic impact on costs. It's also never been more dangerous to operate heavy machinery in major urban markets when you have things like scooters, bicycle lanes and distracted drivers and walkers. It's quite a challenge.
So, you know, it's not an industry, at least in Chicago, for the faint of heart. But we work with good customers, we continually push sustainability as part of our business, and I think because of those three things, we’re able to overcome much of the headwinds that could get us.
WT: What are your company’s major goals for the future? Are there any new innovations or upgrades in the pipeline?
AH: Lakeshore will be the largest independent waste and recycling company in the greater Midwest. That's my goal, and that's our company's goal, and I think we're well on the way to becoming that company. We'll take advantage of every opportunity we can to achieve that goal, whether it be through acquisition or through organic growth. I believe wholeheartedly that the country, and the Midwest particularly, is really in need of having a strong, independent, well-capitalized company operating in these markets, especially in light of Waste Management’s Advanced Disposal acquisition. So, we plan on continuing to grow as we have and to seize on those opportunities as they come about.
Our goal was to be a progressive, recycling-first, diversion-first, customer-focused independent recycling and waste company, and then be a dominant player in the markets in the greater Midwest. As far as how we get there, I think we’ve spent a lot of time as of late on the robotics and automation side. We believe that that's a game-changer for recycling, and I continue to look at ways to add more and more robotics and more automation to the recycling side of our business. And that's not just on the consumer side, but also on the industrial and the construction side as well.
