For almost all document destruction firms, commercial generation sank with the onset of the COVID-19 pandemic last spring. Many commercial customers closed offices from April to May of 2020 in response to the pandemic, leading to a decline in demand for secure document destruction services.
Document destruction companies report that commercial generation remained low for most of 2020 and continued to be low into this year. Many say their commercial customers did not begin to return to their offices until later in 2020 or into the first half of this year as vaccines became available.
The effects of the pandemic on document destruction services varied across the country.
In areas with fewer COVID-19 restrictions, such as Florida, commercial shredding services took a big dip at the onset of the pandemic and then returned. “We had that tough spell in April and May of 2020, and then we had some ups and downs throughout 2020, but overall, we were only down 5 percent in commercial generation compared with 2019,” says Jay Burns, president of Crown Information Management in Winter Haven, Florida, adding that the company is currently on track to achieve its “best year ever.”
He adds, “We’re blessed to have the governor who is pro-business in the state, so we haven’t had any major shutdowns.”
In parts of the country with stricter COVID-19 protocols, commercial generation remained depressed longer. Kari Talvola, president of Shred Works Inc. in Burlingame, California, told Recycling Today in February that commercial paper shredding was still limited. As of early October, she says, things are improving but not quite to prepandemic levels.
“Commercialwise, there are some accounts coming back,” she says. “Some accounts did close. But more is starting to come back; it’s just not as full as before.”
Since document destruction firms generally have faced lower commercial demand in the last two years, many took creative approaches to secure new business to make up for lost revenue.
A rise in residential services
In almost all parts of the country, document destruction companies say they have noticed an uptick in demand for residential paper shredding services this year. Promoting residential services helped some document destruction companies boost their revenues while commercial services were slower.
Don Adriaansen, president and CEO of Titan Mobile Shredding LLC in Pipersville, Pennsylvania, says he noticed a rise in drop-off services at this company since the second half of 2020.
“Residential shredding went up a little bit during the height of the pandemic,” Adriaansen says. “We have had a lot of drop-off shredding. That went up quite a bit toward the second half of 2020, and it has stayed pretty busy. A lot of people are cleaning out their houses, their offices and everything else because they are working from home. That’s been pretty steady and remains that way.”
Although Titan Mobile Shredding remains focused on serving its core commercial clients—which Adriaansen says make up the majority of his firm’s business—the company boosted awareness about its residential services last year.
“We promoted our shred bags and put that information on our website. We launched a new website in March 2021 and optimized residential terms,” Adriaansen says. “We didn’t aggressively go out to homeowners or do postcards or anything like that; we just made it so it was easier for people to find us on our website.
He adds, “Our residential business is certainly higher than what it was a year-and-a-half or two years ago, but it’s still a small fraction of what we do.”
In Spokane, Washington, DeVries Business Services took advantage of the increased residential paper shredding demand in the past year. The company’s President and CEO Patrick DeVries says demand for purges and cleanouts has gone up significantly. He estimates that residential business is “at least 50 percent busier than it ever was before” for his company.
With the pandemic, he says his company “turned up the heat” on promoting its “Seal N’ Shred” bags to residential customers and partnered with local commercial customers, such as nearby banks, to host shred day events.
One local bank his company services launched what he called “Shred Bag, Shred Day” events in the last year. He says DeVries provided Seal N’ Shred bags to each of the bank’s local branches to give to customers. Then on a set day, the bank’s clients would drop off the bags at that bank branch for DeVries Business Services.
DeVries says that partnership has helped to boost awareness about its residential services. “It enabled us to market one-off to these customers. They tell their friends through word of mouth. You see some of these clients come back now after they clean out mom and dad’s basement or their storage.”
Action Shred of Texas, owned by Dallas-based Texas Recycling, kept busy this past year supplementing its commercial shredding business by hosting more mobile shredding events.
“This has been the busiest year, probably in the last five years, for shred events,” says Dennis McCaslin, senior business development manager at Action Shred of Texas. He adds that the company has hosted 24 shred events in 2021, with six more events planned for the rest of the year.
McCaslin says Action Shred of Texas focuses on serving commercial clients during the workweek, while residential customers primarily are serviced at city-hosted shredding events on Saturdays. The increase in events is partly because of rescheduled events that were canceled because of COVID in 2020, but several cities book multiple events throughout the year, he adds. “We see the Saturday events as an additional revenue generator from noncommercial customers and a strategic way of expanding brand visibility with the general public,” McCaslin says.
Although many companies say residential business—be it through purge jobs or foot traffic at local shredding events—is up right now, they anticipate demand might die down in the coming years.
DeVries says purge business is strong right now but could decline with time. “Someone drops off a career’s worth of legal work, but they’re not recreating that [paper]. I think the purge volume will taper off or reduce itself over time once people get reset.”
Benefiting from a price boost
Despite setbacks in commercial generation in 2020 and 2021, document destruction businesses have benefited from stronger sorted office paper (SOP) prices in recent months. SOP prices—along with most recovered paper prices—were depressed in 2019.
Domestic SOP prices spiked from about $130 per ton in April of 2020 to almost $200 per ton in the May buying period because of unprecedented demand for tissue products across the United States. SOP pricing dropped back down by the summer of 2020 and remained lower until recently.
“In 2019, 2020 and the first half of 2021, the market was depressed,” Adriaansen says of SOP pricing. He adds that pricing has been strong since July.
While SOP prices have been strong for only a few months, Adriaansen and other document destruction firm representatives say the extra revenue right now certainly helps make up for slightly lower commercial generation.
“Having a little extra revenue from paper is very helpful,” Adriaansen says, adding that a lot of document destruction firms tend to use revenue from paper sales to help with equipment purchases.
Talvola says the higher SOP prices this summer and fall helped to make up for lost commercial generation.
But, she adds, “It would be really nice if we had strong volumes plus higher paper pricing. We definitely miss the volumes from commercial.”
While SOP prices are strong for the time being, document destruction firm owners know prices can tank at any moment as a result of various market conditions. Because of that, McCaslin says it’s important for document destruction firms to focus on what they can control such as delivering strong customer service and let the market fluctuation of paper grades take care of itself.
“At the end of the day, the company reputation is paramount and everything else usually follows,” he says.
Selling other services
In addition to promoting residential services and benefiting from high SOP prices, secure destruction firms fared better this past year if they offered more than just paper shredding services.
With softer commercial document destruction demand, McCaslin says Action Shred of Texas has focused on awareness and growth of its product destruction revenue in the last two years. He says Action Shred of Texas is one of the few paper shredding companies in Texas that has a facility, purpose-built equipment and expertise to manage product destruction projects. The company began offering product destruction services in 2015 and added an industrial shredder in 2018 to increase its service capabilities.
“So, once we get a product destruction customer who understands we can manage their job professionally and securely, we get their repeat business for the next project. We’re also getting referral business from our product destruction customers,” McCaslin says.
He adds, “We’ve shifted some of our marketing efforts to educate and attract new customers who may not be aware that product destruction services can be offered by a paper shredding company. At the end of the day, destroying proprietary products is as important as shredding confidential documents.”
Other document destruction firms are expanding into hard-drive destruction and record storage. DeVries says he is grateful his company is diversified to be able to handle setbacks in document destruction demand. In addition to document destruction, his firm offers media and hard-drive destruction, record storage, electronic recycling, scanning and courier services, as well as office moving, reconfiguration and cleanout services. He says, “I love when clients ask us, ‘What don’t you do?’ It’s a good feeling.”
Diversification could be the key to survival for many document destruction firms. Many company owners say some commercial paper shredding demand might not return and, in general, document destruction is declining as more documents are digitized.
“I’m curious about seeing the long-term effect of digitization and people working from home,” Adriaansen says. “I’m curious what effect that has on paper shredding. We mainly shred paper, but we are moving toward offering shredding for just about anything, and we’re going to continue to do that to use our equipment in any manner possible.”