How Hauler Contracts Make You Overpay on Waste Expenses: Part 1

Say you’re at Thanksgiving, and your sweet great-aunt Hilda offers you a piece of her legendary pumpkin pie. Of course, you say yes.  

But instead of bringing you pie, she brings you a plate full of green bean casserole. Would you be happy? 

Of course not. 

Unfortunately, this describes a lot of people’s experience with their waste hauler contracts. You thought you were getting a good thing! But you ended up feeling tricked.  

This post will show you how to determine whether you’re getting the short end of the stick on your contract. 

A terrible hauler contract:

  1. Allows for unlimited price spikes 

  2. Has inaccurate service levels

  3. Charges you for additional fees

  4. Makes it nearly impossible to cancel 

  5. Has no provision for bad service

Even if your hauler contract only does one of these things, it could mean a ridiculous amount of overspending. 

And while reading your hauler contract probably isn’t at the top of your to-do list, it’s completely worth it. You’ll likely be shocked with what your hauler is getting away with, but you’ll also know whether you need to consider renegotiating your contract. 

Price Spikes Allowed On Contract

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Your hauler is assuming that he will raise prices at least once a year. Don’t let him get away with that. 

If price spikes happen at least one a year, think about how much you’ll be paying a year from now, or two, or ten. Eliminating the possibility for price spikes now means you’ll be saving more later. 

Getting your price hike situation under control also means that you’ll be able to budget your waste expenses with more accuracy. If you know what to expect, you can factor that into your company budget. 

Now, dust off your hauler contract, and let’s have a look! 

Look in the Payment Terms of your Waste Hauler contract.  It’s typically titled something like “Charges, Payments, Adjustments.”  If you do not find language that limits or prohibits spikes, you need to re-evaluate your contract ASAP. 

Ensure your contract doesn’t allow price hikes, and you’ll protect your company - and your budget - for years to come. 

Inaccurate Service Levels

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If your dumpsters are only half-full when they are serviced, you are paying for too many pick-ups. And if this is the case, you’re in good company: roughly 90% of the companies we’ve worked with over the past seventeen years have containers that are being over-serviced. 

One quick pro tip: even if your dumpsters are full when picked up, you can re-arrange your pick-ups for optimal pricing. If you have five dumpsters, you can reduce your costs by requesting that each dumpster gets picked up at a different frequency.

Contract Includes Additional Fees

Most haulers will pass on the cost any number of administrative and overage charges to you. A lot companies pay these outright because they think they have to. You don’t.

Look for these on your current hauler contract:

  • Fuel/environment fees: This fee supposedly helps recoup the cost of gas, but is actually a huge profit center.

  • Recycling recovery fee: Covers the fees incurred by hauler to transfer recyclable, but again, is typically a profit center.

  • Minimum tonnage fees: Fee charged by the hauler (typically on roll-off or open-top accounts) when a container’s weight upon pickup is below a specific threshold. 

  • Administrative fees:  typically charged if a client elects to receive paper invoices instead of electronic delivery of invoices.

  • Regulatory Cost recovery fee:  Some haulers, (like Waste Management) will charge this fee to cover costs in other regions - not necessarily yours. They explain it like this:
    “This charge is not specifically tied to such costs to service your account, but instead helps us cover Waste Management’s enterprise-wide costs for host community fees, waste disposal taxes and similar charges to service all WM operating company customers in the United States and Canada, and to achieve an acceptable operating margin.” (From Waste Management, retrieved July 23, 2019.)
    The regulatory cost recovery fee is not “tied to . . . your account.” In other words, you’re helping cover their costs to service other companies. Why should you pay for what you don’t benefit from?

You can reduce or eliminate all of these fees; you don’t have to pay them.  But you have to do it prior to renewing a contract, or getting a new one. It’s extremely difficult to negotiate these fees in the middle of a contract.  

Waste Contract is Nearly Impossible to Cancel 

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What’s worse than a bad contract? Not being able to get out of it.

Most hauler contracts are written such that it’s extremely difficult to exit the contract. A lot of haulers probably do this simply because it’s industry practice - not because they’re intentionally unscrupulous. They’re doing what is unfortunately normative in the industry.

But just because it’s normal doesn’t mean you have to roll accept it. This isn’t how transparent people do business. 

And let’s face it: if hauler services were prompt and honest, they probably wouldn’t have to make contracts that trap their clients.

You know what’s best for your business. You should be able to make decisions about which services are the best for your company. If you can’t get out of your contract, you’re powerless to make those decisions.   

Has no provision for bad service

When there are service issues, you should be able to get them resolved quickly and promptly.

When a hauler misses a pick-up, it should be easy to get in touch with them to resolve it. If they’re leaving stacks of garbage around the dumpsters or make a mess every time they service them, the hauler should only need one request to service more conscientiously. But this isn’t often the case. 

Why pay someone for a service who is actually making your life (and your staff’s lives) more difficult? If you had multiple hauler problems with no resolution in sight, you need to know that you have an out if you need one. 

A thorough contract will include steps for resolution - and what will happen if you continue to be dissatisfied with service levels.

You Don’t Have to Overpay for Waste Services

By default, your haulers are going to let these things happen to your contract. But you don’t have to let them. You can solve current problems and prevent new ones from happening - all it takes is effort, and some persistence.

We help companies across the nation find waste solutions and implement changes on their behalf. Don’t be part of the 95% of companies that are overspending on their waste disposal! Drop us a line to learn how you can fix your contract.