Glossary
The words in a recycling contract
30 terms you will meet in rebate and buy-back agreements, each with a link to the clause where it matters.
- Audit right
- A contract right to inspect the buyer’s records for your material, such as scale tickets and sale prices.More.
- Bale
- A compressed, tied block of material made by a baler. Cardboard bales are sold by weight; mills set minimum and target bale weights.More.
- Buy-back
- An arrangement where a buyer purchases used items, such as pallets, gaylord boxes or totes, back from the business that used them, usually per unit.
- Cap
- The highest price per ton the buyer will pay, whatever the formula says.More.
- Core
- A broken or damaged pallet bought for repair or for parts.More.
- Cull
- An item rejected during sorting, such as a pallet or box that does not make any paid grade.
- Deduction
- A fixed amount per ton subtracted after a percentage of the index is applied, as in "60% of index minus $20".More.
- Downgrade
- Paying a load at a lower grade’s price because it missed the specification.More.
- Evergreen clause
- A clause that renews an agreement automatically for another term unless notice is given in a set window.More.
- Exclusivity
- A commitment to sell all of a material, or all material from some sites, to one buyer.More.
- Floor price
- The lowest price per ton the buyer will pay, whatever the formula says.More.
- FOB (free on board)
- The point at which the buyer takes over the goods and the freight. The main US OCC index is assessed FOB seller’s dock.More.
- Gross ton
- Usually 2,240 lb (a long ton). Some contracts define it as 2,200 lb. Always check the contract’s definition.More.
- High side
- The top of a published price range. Contracts state whether they use the high, low or midpoint.More.
- Index
- A published price assessment, such as Fastmarkets RISI’s monthly OCC (11) range by region, that a contract formula reads each month.More.
- Indexed transaction
- A sale whose price is set entirely by a formula on a published price. Fastmarkets excludes these when assessing the index.More.
- Light-load charge
- A charge for a pickup below the agreed minimum weight or count.More.
- Matching right
- The buyer’s right to keep your business by matching a better written offer from someone else.More.
- Moisture deduction
- Weight or money taken off a load because measured moisture exceeded the contract limit.More.
- OCC
- Old corrugated containers: used cardboard boxes. OCC #11 is the standard grade in the ReMA Scrap Specifications Circular.More.
- Offtake agreement
- An agreement under which a buyer commits to take a supplier’s output, here a generator’s recyclables, on set terms for a period.
- Outthrows
- Papers that make a bale unsuitable for use as the grade specified, such as boxboard mixed into OCC.More.
- Prohibitive materials
- Material that, above the allowed amount, makes a bale unusable as the grade specified, or that could damage equipment: plastic, metal, wood, glass, waxed board.More.
- Rebate
- Money paid (or credited) to the generator for its recyclables, usually per ton under a formula.
- A percentage of what the buyer earns from selling your material, sometimes with a floor.More.
- Scale ticket
- The weighbridge record for one load: gross, tare and net weight, with date and load number.More.
- Short ton
- 2,000 lb, the unit of the main US OCC index.More.
- Spread
- A fixed amount per ton added to or taken from the index, as in "index minus $25".More.
- Tare
- The weight of the empty trailer or container, subtracted from gross weight to give net weight.
- Title
- Ownership of the material. The contract says when it passes to the buyer.More.