Does anyone understand pricing behind waste removal?

6 Replies

As the controller for a property management company, I have to sign off on all of the bills. Most utility bills are pretty straight forward whether they're high or not, but the waste removal bills are a different animal. I usually check on the costs of an 8-yard dumpster and divide it by the number of dumpsters and the times it is picked up in a month so I can get the cost  of one pick up for that dumpster. So far, I've seen fluctuations between $30 to $300 per pick up of an 8-yard dumpster. Can anyone explain why there is such a variation in pricing?

Two answers, both serious, but only one that SOUNDS serious.

First, check and see if you are paying by the "tip" (individual pickup at a flat rate) or by the ton.  Sounds like you might be paying by the ton.  This often actually works out cheaper, by the way, so don't immediately switch to by the tip without doing the analysis.

Second, while I don't think it is likely to be true in Alabama, in large parts of the Northeast, garbage hauling is controlled by certain families of Italian extraction, and pricing is what they say it is.

I'm pretty sure that we're paying by the tip. Each bill has a unit cost, but unit costs don't just describe a single unit. The unit cost describes, for example, a quantity of two dumpsters 8-yards in size picked up twice a month. I've found separate bills that will have the same quantity, size, and pick ups that will vary wildly in the price. 

I've actually asked our representative about the costs and she said she would look into it. We do have contracts on the different properties, so it may just be a question of how each contract was negotiated. 

I'm not sure how connected the Alabama garbage industry is, so I may back off if I get a new representative who is large and Italian. 

As with most business with few alternatives,  they will charge as much as they can get away with.  Get the details and a copy of your contract from your sales rep and bid it out with the other haulers in town.  You may or may not have a better option.   We have three options in my town and their pricing is very similar so it is pointless to move unless your service is bad.  

That's what I'm going to have to do. My rep is really nice and is very responsive except for when I asked about price. I know she was dealing with some family issues at the time, so I'm keeping my hopes up that she's not dragging her feet because I've stumbled across something they've pulled.

I'll definitely make sure to get some proposals by the other companies around. Luckily, there are quite a few waste removal options. 

You might be locked into a longterm contract.

Get a hold of the contract that they are operating off of to get the base price.  That should not vary for the term of the contract.

Now have them explain all their crap fees:  fuel surcharge, city surcharge, fuel surcharge on the city curcharge (I love that one).

If they are "getting froggy" with what they actually bill, hold them accountable!

We are definitely locked in to a longterm contract, but it comes up at the end of the year. There are a few competitors that have been asking around about them. As much as I like the current company, I don't want to fall into complacency when it comes to negotiating these out.