"What is a waste hauler contract?"
A waste or recycling hauler contract is a service agreement between you and your chosen vendor to provide waste and recycling service at a location or at multiple locations. You agree to pay them at a particular rate for a 3- or 5- year term, and they will pick up and dispose of any waste and recyclable materials.
99% of haulers will not do business with you unless there is a contract in place. Larger vendors like Republic Services and Waste Management will always require a contract to provide service. Some regional providers will operate on a ‘gentleman’s agreement’, but this is rare.
The agreement itself is typically short - only 2 or 3 pages. The first page specifies your site and billing addresses, service information, pricing, and any special terms of the agreement. The second page usually states the contract terms, any auto-renewal language, and other service information.
Below, you can see an example of a contract one of our clients had with Waste Management. It includes an automatic renewal clause that made it more difficult for them to get better pricing from other vendors at the end of the 3-year term. This clause is in the black square).
Is my contract costing me?
If your hauler contract has any one of these five issues, it's almost certainly costing you money.
1. Allows price spikes.
2. Has inefficient service levels.
3. Allows ancillary fees.
4. Has inefficient waste equipment.
5. Has an automatic renewal clause.
Have one of these issues means you're likely overspending on waste and recycling expenses. Having all of them practically guarantees it.
Most companies don't realize that their hauler contract is set up in their hauler's best interest. The hauler wants to be able to increase your rates at will - this guarantees more revenue. They don't have financial incentive to provide service that meets your true needs. They are more than happy to service your dumpster 5 times a week when you really only need service 2 times a week. They are not going to suggest cost-cutting solutions because it cuts into their profit.
You can read more about these issues - and their solutions - here!
Should I sign a waste hauler contract?
You almost certainly need a waste hauler contract; but you need to ensure you have a good one!
Most of the contracts we’ve seen in the 18 years we’ve been in business favor the hauler, not you - their client. They can raise prices at their discretion, and there is often no recourse clause for service issues. As a result, some of our clients have overpaid by 50% on their waste expenses.
You should only sign waste and recycling contracts that:
Limit price spikes
Outline the allowable annual % increase on services
Have no auto renewal clauses
Include the correct service levels
Have an unresolved service clause
Reduce or eliminate ancillary waste fees
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