The Extra Fees That Haulers Add to Invoices: Are you protected?
Haulers win waste contracts with low prices for waste disposal, making you think that you’re going to get a great deal by switching to them. But to make their money back from these contracts, they have developed a variety of additional ‘fees’ that they may add on top of their disposal charges.
In this article, we take a look of some of the most common extra fees that haulers will try to charge. Every day, NWA’s Vendor Services team works tirelessly for our customers to fight against these additional fees.
Business Compliance Charge
Although this fee has been applied by some haulers for a while, it has just become a mandatory fee for one of the waste majors. They argue that their fees are necessary to address the company-wide impacts associated with oversight and compliance.
The fee is now applied to all of their invoices, regardless of how their contracts were initially drawn up. This is an example of the strong-arming that the major haulers carry out, where additional fees are forced onto accounts because they know that in many parts of the U.S., companies have no alternative but to use their services.
Every waste management site has to manage compliance, and yet only a small handful of haulers charge an additional fee to cover these costs.
When this fee is added to one of our customer’s invoices, our Vendor Services team searches for competing haulers that service the same area, but offer a better, more transparent price.
One national waste hauler explains that their fuel surcharge allows them to keep up with the changing costs of fuels, including diesel, in order to achieve necessary operating margins. However, they calculate it as a percentage of all invoice charges, even those that are not directly affected by diesel prices. It’s hard to understand why charges like disposal fees and equipment rental should go up, just because fuel prices increase.
The base rate of diesel ($0.95/gallon) that this hauler uses for their cost comparison hasn’t been so low since December 2001. But they always use this figure to calculate their fuel surcharge, rather than the price of diesel on the date when a new waste contract is started.
Another problem with fuel surcharges is that they always increase, regardless of the pump prices. Even when fuel prices drop considerably, as they did in 2016, the fuel surcharge remains the same or steadily creeps up.
One waste major describes this fee as covering their costs to “operate in a safe and environmentally responsible manner”.
Another says that the charge allows them to also cover the costs of “managing and disposing of wastes in an environmentally sound manner”.
All licensed waste management firms have the same legal obligations to operate in a safe and environmentally responsible manner, ensuring the environmentally safe disposal of wastes, but the majority of haulers don’t charge an additional fee to do so. Wherever possible, these are the firms that NWA’s Vendor Services will seek out and contract to service your sites.
Regulatory Cost Recovery
Regulatory cost recovery fees are meant to cover waste management costs such as host community fees and waste disposal taxes. They are calculated by one waste major as a percentage of all invoice fees, plus their Fuel Surcharge and Environmental Charge.
As with all the other fees, regulatory costs are standard operating costs for all waste management companies, and yet only a small handful of haulers pass these costs onto their customers.
Haulers explain this as covering the cost of generating paper invoices and processing payments. Businesses can avoid or get a discount on the fees by signing up for automatic, pre-authorized payments. The problem with pre-authorization is that it’s easier for the waste company to overcharge on invoices, since invoices can only be contested after they have already been paid.
This is a more time-consuming and challenging process than reviewing each invoice and contesting erroneous charges before authorizing payment. NWA provides this review as a service to customers.
How NWA Protects your Business
NWA has a specific department dedicated to managing vendor costs. At the start of your contract, we go out to the market to find the best, most reliable, and cheapest haulers to undertake your waste collection.
Then when we receive each invoice, we check it off against the agreed rates. If we discover a price rise or the application of an extra fee, we go back to the hauler and challenge its legitimacy, looking out for any patterns of frequent or excessive increases.
In these cases, we search for other haulers in the marketplace to replace the existing service provider. When they’re the only company that a municipality allows to service the area, our team will lodge official complaints directly with the municipality.
NWA works as another arm of your business, continually fighting to make sure that your waste prices are fair and your costs are controlled. We believe that the price you pay during your contract should be the price you signed up for at the beginning, and we work tirelessly to make this the case.