Shhh…. What The Haulers Don’t Want You to Know About Their Hidden Fees
The waste management industry has a bad reputation for hidden fees, erroneous invoicing and unannounced price increases, and it’s not without reason. In this article, we highlight one of the new ways that other waste companies have found to hide fees from their customers, along with some of their favorite strategies to squeeze more money out of your account.
This is a new mechanism by which large national haulers have started to roll all of their additional fees together into one line item.
Previously, you may have received an invoice with three or four additional line items, for such things as:
- Fuel / Energy surcharges: Calculated as a percentage of all invoice charges, apparently to allow for increases in fuel rates over the course of the contract.
- Environmental charge: Sometimes as much as 16% of the total invoice charge, to cover costs for ensuring their landfill sites operate in a safe and environmentally responsible manner.
- Regulatory cost recovery charge: When charged as a separate line item, you’d have been able to see that this percentage was calculated after the fuel and environmental charges had already been added. It covers standard operating costs such as host community fees and waste disposal taxes.
- Administrative charges: Covers the cost of generating paper invoices, and processing payments; waived if you signed up for pre-authorized payment, although that just made it harder for you to contest your invoices in general!
Now, all of those fees are no longer itemized, but have been “bundled” with the pickup fee as one single line item. This offers no transparency as to what makes up that total figure; no explanation of how much of the cost is for haulage, versus tonnage disposal costs, versus additional surcharges – just one line and a price for you to pay.
This makes it much harder for you, the client, to contest the extra charges on the invoice, since you no longer know exactly what it is you’re contesting!
It’s not just “slippages” on the invoices that contribute towards making your waste fees higher than they should be. Waste haulers can also make a lot of extra money off of their customers by keeping larger waste containers on site than your operations require.
When you initiate a waste contract, your new hauler will provide you with bins for each site based on their volume estimates. Well, actually, they’re likely to provide you with bigger bins, because that prevents the risk of overflows while they’re setting up your service, and they can charge you more to haul bigger bins! They then set up the collection frequencies and start servicing your sites.
If some bins regularly overflow, the hauler will contact you to increase their collection frequencies. But, if they’re collecting bins that are only half full, they’ll probably keep this information to themselves. Why? Because this way, they’ll still be able to invoice you every time they service the bin.
The result for customers like you, is that you end up paying more than you should for the hauler to move and empty bins that are only half full!
Over Servicing Compactors
The other mechanism that waste companies utilize to skim more profits from a customer account is to put them on a schedule that results in their compactors being serviced too regularly. They will say that this keeps your site from experiencing problems and downtime from over-filled bins, but the reality is that they’re just making extra money by charging you for more hauls than you really need.
Many company’s waste volumes rise and fall throughout the year, as they go through peaks and troughs in activity. Equally, over the course of a several year contract, waste quantities at certain sites may gradually increase or decrease. A conscientious waste management partner will adjust service frequencies accordingly, so that you are not caught with overflowing bins, or being charged to move air. This process, known as “load optimization” or “right-sizing”, is a continuous exercise that ensures that waste bills are kept down.
The trouble is that not all waste haulers are conscientious. Many will try to keep your collection frequency unnecessarily regular, which prevents the risk of overflowing containers, but also means that you’re paying for them to haul containers more regularly than they need.
Then, when your sites have peaks in business activity, they will encourage you to manage this extra volume by asking for one-off, or “emergency”, collections. However, these collections cost much more than scheduled collections, so you will end up paying more than you should, when, instead, the collection frequency could have been adjusted proactively to accommodate the extra tonnage.
Not Diverting Waste From Landfill
No matter what industry you’re in, or the types of locations in your portfolio; your business will have lots of opportunities to divert valuable materials from landfill. This can save you significant money in the long term, particularly where your waste company can find opportunities to divert materials in a way that generates revenue.
The problem is, that many waste companies own their own landfill sites, and so their biggest interest is to fill these up. It’s a conflict of interest that rarely goes in favor of the customer.
Sending waste to landfill isn’t economically or environmentally the best strategy for your business. Recycling a greater proportion of your waste costs less than disposing of it as waste, and provides your business with the opportunity to generate rebates for valuable materials such as metals. It also ensures that your business is in line with the EPA guidelines to reduce, reuse and recycle as much of your waste as possible.
A trustworthy waste management partner will analyze your business activity, seek to understand the material types that you are disposing – generally through conducting waste audits – and will propose cost saving exercises to separate out valuable materials from your waste stream so that they can either:
- Reduce the weight of material being sent to landfill, saving money on your waste bills,
- Generate a rebate from materials such as HDPE or metal,
- Or sell them to another company that views that material as a primary feedstock.
Depending on the materials and their volumes in your waste stream, there could be a great opportunity for your business to save, or even make money.
How NWA protects our customers
National Waste Associates’ (NWA’s) accounting department combats erroneous charges and hidden fees by auditing each and every invoice that they receive from a hauler. If they find an invoice that has increased beyond the agreed rate, they will flag this for our vendor service team.
Vendor services then gets to work contesting these un-negotiated price increases with the haulers, on our client’s behalf. Because we believe you shouldn’t pay a dollar more than you’ve agreed to. This activity often results in compounded cost avoidance of thousands of dollars over the course of a contract.
NWA isn’t like the other waste majors who own their own landfills and trucks, and so have to cover their capital costs. We’re a full service management company that acts as a fiduciary, which means that we harness the expertise across all of our departments to actively control our clients’ costs.
And the service optimizations that we propose don’t just save our clients a ton of money, but also help the environment by eliminating unnecessary hauls and diverting valuable materials from landfill.
Sick of scouring through invoices to find the hidden surprises your hauler has left for you? Leave it to us to fight that battle for you!
Contact us at 1-888-692-5005, or email us at firstname.lastname@example.org
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