Through no fault of their own, most companies have terrible hauler contracts. You don’t know what you don’t know - and most companies just don’t know!
All terrible hauler contracts have at least one of the following problems:
They do not preclude price spikes
They have inaccurate service levels
They charge you additional fees
They make it nearly impossible to cancel
They have no provisions for bad service
Below, we’ll go over each of these in detail. If your contract includes even one of these items, it’s not a question of if you’re overpaying, but by how much.
Take Rhonda Cummings of Presbyterian Homes, for instance. She had a poor contract, just like many of you. She was paying ancillary fees, and she had inaccurate service levels. As a result, Rhonda was overpaying by $22,000 in her waste expenses every year before we stepped in. What could you do with an extra $22,000?
Waste Industry Profit Centers
The five contract problems above are examples of waste industry profit centers. Most waste companies are typically set up to exploit profit centers.
A profit center is an opportunity that haulers use to generate revenue. Profit centers yield more revenue, and they are almost never tied to the actual cost of servicing your locations. The ancillary or additional fees on your waste hauler contract, for instance, are huge profit streams. These fees are often not actually tied to recouping costs, and they are different from the line items for the services performed. They exist on your invoice because they can.
On the sample invoice below from Waste Management, this company is being charged:
A Fuel/Environmental charge
Regulatory Cost charge
Administrative charge
All of these are additional fees that do not necessarily have to exist on your invoices each month. They can be either reduced or completely eliminated.
If your contract allows, your hauler can - and almost always will - pass on excess charges outside of standard operating costs.
Most haulers will not willingly or voluntarily cap their revenue. Very, very few haulers are going to come to you with ideas on how to reduce your expenses - because it’s not in their financial interest to do so. For this reason, it’s critical to have an impartial third party review your waste and recycling expenses. Without review, haulers have no accountability to charge fair pricing for their services or to provide ideal service levels.
As industry experts, we know where to find the gaps in your current waste management process and provide permanent, cost cutting solutions.
Want to learn more about how you’re overpaying on waste?
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