No one I know reads their waste hauler contract for fun. No one who finds a few hours to spare in the work week says, “You know what? I should really take an hour and look at the fine print on my contract.”
But they should - because they’re overspending.
If you devote some time to your contract, you’ll understand where you’re overspending. You’ll save your company hundreds if not thousands of dollars, and you’ll have peace of mind knowing that you’ve prevented future headaches.
You probably already know something is wrong with your waste spend. and you’ve narrowed it down to your awful contract. And you’ve realized that it’s actually better for you to stick it out with your current waste disposal provider than to get a new contract.
Renegotiating a contract can sound tricky - but it doesn’t have to be! You’ll first need to gather some information, and then you can renegotiate fully informed.
Prior to renegotiations, you need to:
Know what a good contract has in it,
Evaluate your own contract,
Decide what you want to change,
Know what market rates for services are.
Set yourself up for success, and spend some time gathering some critical waste disposal information.
Before you Begin the Renegotiation Process
You’ll need to know what your current contract length is. If your contract is a almost up, consider including some service or pricing addendum in the next contract. It’s much easier to negotiate a renewing contract than a current one. (This is also why those of you with month-to-month contracts actually have the best shot at renegotiating!)
And it’s also important to keep in mind that it’s incredibly difficult to renegotiate a contract that has quite a bit of time left in it. It’s not impossible, but it’s not something that we recommend doing. Haulers are simply not as likely to agree to new terms simply because you want them - there has to be some benefit in it for them as well. And since you’ve already signed a contract with them, they know they can just tell you “no” and go on their merry way.
However, if your contract is about to expire, you have some leverage. The haulers know that if they don’t give you at least some of what you want, you’ll likely switch to a different provider. So they have incentive to bend a little more than they would otherwise.
Determine if your contract is month to month. If it is you have more leverage and should get pricing from 1-2 other waste haulers if possible to determine the market pricing in your area.
Know What a Good Contract Looks Like
Most people don’t really know what a good contract includes. A good contract is one that has terms that are fair to the client as well as the hauler.
Limit price spikes
Has accurate service levels
Limits ancillary fees
Is easy to cancel
Has provisions for poor service
A contract that includes these things will actually prevent waste headaches before they start. If you have a haulers who keeps missing pick-ups, you’ll already have a penalty in place. If a hauler tries to raise prices above a certain percentage, you can point to your contract and kindly say, “Not today, amigo.”
In short, you’ll have immediate recourse for when things do go wrong.
Know What You Want to Change About Your Current Contract
Make a list of things you want to change about your current contract. Some of these things may include:
Service levels (the number of pick-ups made by the hauler per week)
Term (the length of the contract)
Price Increase Caps - language that limits or eradicates price hikes
Fee Caps - language that limits or eliminates ancillary fees.
Auto-renewal - cancelling your auto renewal puts you in the driver’s seat when it comes to whom you entrust your waste disposal.
Now, prioritize that list. You have to be prepared to not get everything you want - especially if you’re trying to renegotiate in the middle of a term. Having clear top priorities will help you let smaller issues go, if need be.
Know the Waste Market Prices
Even if you’re not intending to switch haulers, it can be exceedingly helpful to have a few bids from other area haulers. Some bids may be higher than your current service fees, but some are bound to be lower.
Knowing waste market prices will give you an additional bargaining chip. Unfortunately, a lot of times haulers are banking that you don’t know what other haulers charge. If you’re blind, you’re more likely to accept the prices they’re charging you.
But if you know market prices, you’ll have a pretty good idea about what’s fair and, well, what isn’t.
If you know what you don’t like about your contract, what a good contract includes, and what area haulers charge, you’ll be well armed to renegotiate your contract.
Renegotiating Your Contract Is a Critical Part of Your Waste Expense Reduction Strategy
Your contract can play a huge part in protecting you and your bottom line from waste expense increases. Renegotiating your contract can be time consuming, but you’ll reap the benefits for years to come.
Ignoring waste problems don’t make them go away, unfortunately. Strategizing about how to stop overspending on your waste disposal and coming up with a plan of attack can yield surprising savings - and peace of mind!