American Recycler News, Inc.


Vehicles recycled after Superstorm Sandy Click to Enlarge

Several months after Sandy smashed into the northeast in late October with the worst storm in 100 years, the National Insurance Crime Bureau (NICB) revised its estimate upward for the number of vehicles damaged. The new total now stands at a staggering 250,500 vehicles. But keep in mind, this number only represents reported insured losses, so add tens of thousands more unreported uninsured vehicles that were damaged or destroyed by the storm.

According to NICB, New York suffered most with 150,000 vehicles damaged followed by New Jersey with 60,000. Fourteen other states accounted for the total of over a quarter-million.

NICB issued a warning about Sandy damaged vehicles that have been reconditioned and offered for sale. While it is not illegal to sell flood-damaged or salvaged vehicles, sellers must disclose the information to buyers. The NICB offers a free VINCheck to help research if a vehicle has been reported as salvage or stolen.

Whether insured or uninsured, many vehicles damaged by Sandy wound up at auto auctions as the first step in the recycling process. Depending on the extent of damages and the winning bid several outcomes are possible. The vehicle may be reconditioned and offered for sale, exported to a foreign country, dismantled for parts or processed for scrap metal value.

American Recycler interviewed Christine-Carrol Palfrey, vice president of Auto Exchange, an independent salvage remarketing company located in the heart of Sandy’s area of destruction in the borough of Sayreville located near Raritan Bay in central New Jersey. Auto Exchange is a salvage remarketing company offering a central marketplace to dispose of salvage vehicles. Her company offers vehicle pick-up, in-house titling, on-line assignment, digital imaging, marketing, vehicle inspection areas and auctioning.

“On behalf of our clients, we picked up over 5,000 vehicles as a result of the storm. These vehicles ranged in age and type from new to old, and high end to low end. Many different neighborhoods along the shore were affected. There were also neighborhoods inland that happened to be along rivers and bays that flooded. It really affected all income levels which meant we had all different types of vehicles. In addition to flood damage there was also significant damage from falling objects like trees and debris.”

Palfrey explained how her company operates. “We get a call from an insurance company after they get a claim and then we pick up the vehicle on their behalf. Once titles are processed properly and claims are settled by the insurance carrier, the vehicle goes to auction. Auction participants include licensed dealers, recyclers, exporters or scrap processors. The vehicles are sold “as is” at the auction to the highest bidder. The vehicles have varying levels of damage. Reporting to the appropriate agencies is completed as required by state and federal law.

“As a result of the storm, we increased staff and increased our number of physical locations to handle the extra volume. In addition to passenger vehicles, we handled tractor-trailers and other commercial vehicles, as well as a handful of motorcycles.”

While many salt water flooded vehicles appear to be structurally undamaged, salt water is highly corrosive and can cause severe damage to electrical systems, interiors and mechanics. For that reason, many owners require certified destruction.

Besides cars and trucks, many other vehicle types were victims. The Boat Owners Association of the United States (BoatUS) estimates than 65,000 recreational boats, both insured and uninsured, were damaged or lost in Sandy at an estimated dollar loss of $650 million. That made Sandy the single largest disaster for recreational boats on record. Scott Croft, spokesman for BoatUS said, “We think that about half the recreational boats out there have insurance. It’s not mandatory. Usually people want insurance simply for the protection, or their bank requires it for a loan on the boat. But if you don’t have a loan and the boat is of low value many people don’t insure.”

Total loss steel and aluminum boats, and marine engines, of course, can be processed much like autos by eliminating environmental hazards, and be recycled for scrap metal. Recycling a fiberglass boat is much more difficult. When size-reduced fiberglass tends to fluff, it is nearly impossible recycle. However, several non-profit organizations accept donations of total-loss fiberglass boats for reconditioning projects.

Untold numbers of other types of recreational vehicles were also affected by Sandy such as travel trailers, motor homes, motorcycles, snowmobiles and personal watercraft.

One company that auctions the full variety of vehicles is Insurance Auto Auctions, Inc. (IAA). IAA focuses on the automotive salvage industry and provides sellers and buyers with venues to process and acquire total loss, recovered theft, fleet lease, dealer trade-in and collision damaged rental vehicles.

The land IAA procured at Calverton Executive Airpark in New York was the finish line for a recovery effort that gathered thousands vehicles from Sandy-affected regions.

IAA works with a variety of sellers including insurance companies, dealerships, rental car companies and fleet lease companies to facilitate the efficient sale of salvage vehicles. IAA offers vehicle pick-up, in-house titling, on-line assignment, digital imaging, marketing, vehicle inspection areas and live, and live-online auctions.

Jeanene O’Brien, vice president of provider marketing at IAA shared her company’s experience with the catastrophe. “Our locations in the New Jersey and New York metropolitan area were naturally most impacted and it was the largest event we have managed to date. Our efforts, specific to Sandy, required significant additional staff, towing companies and space in order to accommodate the dramatic increase in volume. All of our auctions are live and live-online, and we also held screen sales, allowing buyers to efficiently bid on vehicles that were in holding yards.”

“IAA does not complete mechanical or body repair, but to accommodate our buyers, we offered additional sales and opportunities to secure the vehicles they needed. We also worked with our sellers by segmenting our inventory to assist them in completing inspections and estimates for the claims process. We consider our salvage auction process to be very efficient. We currently have less than five percent of Sandy volume remaining to be auctioned,” said O’Brien.

Lastly, Joe Payesko, general manager of Sims Metal Management’s east coast Claremont Region, spoke with American Recycler. Sims’ facilities most affected by Sandy were located in Jersey City and Port Newark-Elizabeth, New Jersey and in the Bronx and Long Island City, New York.

Sims recycles on five continents, which includes the U.S., Australia and the United Kingdom, and has one of the largest networks of processing facilities and feeder yards.

Payesko, like millions of others in the New York metro region, lost power at his home for 10 days. But what Payesko and his team did prior to the storm was critically important to protecting their scrap metal operations. Sandy was predicted to hit the area on Monday, October 29th, but they began preparing on Friday, the 26th.

“We shutdown our transformers on Sunday afternoon and moved what we could to higher ground because we knew we would not be working on Monday. Our biggest concerns were powering down our transformers and protecting our leased fleet of barges and our floating cranes. We had the only ship in the New York harbor at our dock in Jersey City. We had tugboats on standby from Sunday on, making sure our barges were pulled out and off the docks as the tide was rising. The water rose five feet above the dock. Anything that was floating, was floating up onto the land. During the height of the storm, the tugs were pulling our barges back off the docks. We had a six million dollar crane on a barge in Port Newark and we had a tugboat nearby, keeping it safe. The crane actually went up on the dock, but the tug was able to pull it off before the tide went out. As quickly as the tide came in, it went out. After the storm, if you went around the New York and New Jersey coastline, there were barges and ships and many other things that were lying on top of docks. Because we were prepared, that didn’t happen to us.”

Of all its water-borne assets, Sims suffered only one hole in one barge and even that didn’t sink. By Tuesday morning Sims’ people, some living along the Jersey Shore whose homes were affected, were back at work. Five feet of water had covered the Jersey City yard. After only three days Sims was receiving material and using generators to power its scales. Within one week, with power restored and after a day of maintenance, their Jersey City mega-shredder was back online even though there were issues with other aspects of the operation in low lying areas of the property.

“We had devastation here – facilities down. We had 250 workers in Jersey City and another 60 in Long Island City. That place was also completely flooded. I still have operational people who are not back in their main offices.”

“We started to acquire vehicles from Sandy after December 15th and it went on through the month of January at a very high volume. There were tens of thousands of vehicles processed. We were very busy at our Long Island City and Jersey yards with cars coming in from auto wreckers and from the ports that were totally flooded out,” Payesko reported.

At the Port Newark-Elizabeth Marine Terminal alone, about 16,000 vehicles were ruined by Sandy’s tidal surge at an estimated loss of more than $400 million. These imported vehicles, recently off-loaded from car ships and parked in lots at the Terminal, had been destined for dealerships throughout the northeast.

“There were also cars from the communities that were flooded out that went to auctions and were bought by people like ourselves, other scrap dealers, and auto wreckers. People also bought saltwater damaged vehicles for parts or reconditioning, but there were many OEMs and other owners that wanted certified destruction because they did not want the vehicles or parts going into the marketplace. During December and though the middle of January we worked around-the-clock to de-pollute vehicles – taking out mercury switches, CFCs out of air conditioners, and removing fluids. We performed the certified destruction and customers actually watched their vehicles going into our shredder. Besides cars and light trucks, we processed busses, tractor-trailers, backhoes, bulldozers, motorcycles and ATVs – all sorts of things.”

Sandy-damaged vehicles coming into Sims’ Claremont Terminal began to taper off by mid-March.

“Going through Sandy and having no casualties was amazing. I was so proud of our crew. After we got up and running I took 30 guys out to dinner to thank them – supervisors and managers that were part of it. They were here every day and I was proud to be working with people like that,” Payesko concluded.