If your contract doesn’t include rate caps, it’s not a matter of when and if you will receive price increases, it’s a matter of when, how much and how egregious the price increase will be.
You can expect your hauler to increase prices up to two times each year, by as much as 15% each time. In the worst cases, we’ve seen up to four prices hikes in one year. Most haulers will only increase your rates once a year, but if there’s nothing stopping them from increasing more frequently, chances are they will.
Take the screenshot below, for example. This Republic customer’s rates increased by 200% over the past two years.
They were paying $275.42 for service. Now they’re paying almost $300 more - $573.15. That’s a 200% increase at a single location! If this increase occurred in a portfolio of many locations, this client would in effect be overpaying by thousands - something they could have prevented by just a few additional lines on their contract.
This is why we’re so intent on solving every contract issue you have. When we lock in your in your price, we eliminate the possibility that this will happen to you. Your staff will be able to budget with confidence for the entire term of your contract since your rate increases will be capped. And we’ll be there to hold the hauler accountable if they “forget” the price cap.
Are Some Price Spikes Legitimate?
As time passes, the cost of providing services increases. Fuel prices tend to rise over time, disposal charges at the landfill increase, as do the price of dumpster and garbage trucks. It’s reasonable for your hauler to increase prices to match the cost of doing service. But price spikes often go beyond these allowances.
How do we know? We know how haulers calculate their costs. To service your locations, your hauler incurs the following charges. We would expect for them to pass on some of the cost of these fees, but we find that they typically pass on the majority of them - and how much is added in on top of that.
Disposal cost to drop off waste materials at disposal facility. Waste disposal facilities (landfills) charge for the garbage they receive. Haulers must pay this fee, and this fee can be passed onto you in its entirety.
Cost of hauler equipment. Dumpsters, garbage trucks, and compactors are expensive to make and they can be extremely expensive to service. The trash haulers isn’t gentle on equipment. Dumpsters lose tops. Dumpster container bottoms become rusted. Compactor parts stop working. Since most companies rent the dumpsters or compactors from their waste hauler company, the haulers have to buy the equipment and service it.
Cost for servicing account. It’s expensive for haulers to drive their trucks to and from your locations. Haulers have to take into account employee compensation, the fuel charges, and the cost of maintaining the trucks. Haulers will typically divide up the number of locations they have to service to figure out how much to charge each customer.
This means you aren’t necessarily charged exactly what it takes to get from your location to another; it’s presumably divided up equally among those who are on the same route. However, it must be said, there’s no external oversight on this. Most companies trust that their haulers are accurately and fairly charging them.
Haulers should make a profit doing what they do - it’s important work! But they don’t need to overcharge simply because they can.
Want to know more about how you’re overspending?
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