Waste removal is one of those expenses that every business has, but few people think about.
You set up a contract with a waste management company, your dumpster gets emptied, and you get a bill every month. That’s pretty much where the engagement ends.
But waste management fees add up quickly. In fact, commercial trash removal costs businesses in the US over $50 billion per year. That’s a ton of money for your business to spend, literally on garbage.
If you think your business is paying too much for waste removal and recycling, then you probably are. But just in case, I’ve identified the top signs that you’re actually overpaying. So if any of these scenarios sound familiar, your money is basically going into the dumpster alongside your trash.
1. Frequent Price Increases Without Clear Justification
This is by far the most common sign of waste management overcharging.
Haulers will often send vague notices about “increased operating costs” or “regulatory requirements” to explain a rate hike. But these increases are arbitrary and designed to increase profits for the trash removal company.
So if you’re getting annual or potentially even semi-annual increases without justifiable documentation, it’s the first red flag that you’re paying too much.
Pull out your most recent waste bill and compare it to the same month one year ago. And if you still have the records, check the prior year as well. Calculate the percent increase over that stretch. If you’re seeing a double-digit percentage increase over the past two years (assuming your service didn’t change), then you’re being taken advantage of.
2. Excessive Fuel or Environmental Surcharges
Beyond your base waste removal fees, haulers love to add surcharges that are seemingly random to the average business owner.
- Fuel surcharges
- Environmental fees
- Sustainability fees
- Administrative fees
These are common offenders, though any add-on as its own line item should be looked at closely.
Do waste management companies face environmental compliance costs? Absolutely. But these fees are typically inflated on customer invoices much higher the actual expense.
The key factor here is transparency. If your hauler can’t provide a clear explanation of how these surcharges are calculated or why they’re necessary, it’s a sign that you’re overpaying. And these types of surcharges are one of the most negotiable costs on waste removal bills.
3. You Haven’t Audited Your Waste Fees in Years
When was the last time you actually sat down and truly audited your waste removal invoices?
Not just glancing at them and throwing them in the filing cabinet. I mean really scrutinizing every line, comparing costs month-to-month, and assessing your actual charges against what was agreed upon in your contract.
Most businesses go years between these types of in-depth audits. By the time they catch something, it’s too late to fix.
Your hauler isn’t going to refund or credit you for a mistake on your invoice three years ago. But if you audit your statements on a regular basis, you can catch mistakes immediately and push back against new fees or random increases.
Trash removal companies are hoping that you don’t have proper oversight over your costs. That’s what allows them to continue raising your rates whenever they want. Don’t let this happen.
4. You’re Paying For Empty or Partially Filled Containers
This is a huge waste of money that many businesses tend to overlook. If your dumpsters are consistently half full at pickup time, you’re essentially paying your waste management company to haul air.
Haulers have no financial incentives to optimize your service levels. Frequent pickups and larger containers mean more profits for them.
I realize it’s not always possible to predict your exact waste removal needs with every pickup. But it’s worth your time to assess your actual waste generation patterns over several weeks.
If your containers are rarely full, then you either need to negotiate less frequent pickups or smaller containers. This single change could reduce your waste costs by 20% to 40%.
5. Your Dumpsters Are Overflowing
On the flip side, an overflowing container can lead to you being penalized for your hauler’s poor planning.
When waste exceeds the container’s capacity or if additional trash is piled up outside of the container, there’s a good chance you’ll have additional charges on your bill.
Overfill fees can be really expensive. Sometimes they could be close to your entire monthly service fee for a single violation.
But here’s the thing. Overflow usually means that your business isn’t being properly serviced by the hauler. It doesn’t mean that you’re generating too much waste.
Your hauler is happy to keep hitting you with these penalties because it’s more money in their pocket. But it would be cheaper for you to get a bigger dumpster, second dumpster, or arrange for additional pickups (they just aren’t going to tell you that).
6. Confusing or Non-Itemized Invoices
Waste management bills shouldn’t be a mystery. A truly transparent provider will provide you with a clearly itemized invoice that breaks down every single charge.
So if your invoice is too difficult to read, uses vague terminology, or lumps a bunch of costs together into one line item, it’s a red flag.
This makes it nearly impossible for you to spot errors, track price increases, or understand what you’re actually paying for.
And there’s a good chance that your hauler does this on purpose. A lack of transparency is a common tactic in the waste management space to mask unnecessary fees and price hikes.
7. Charges For Contaminated Recycling
More businesses are committed to sustainability, and many states have implemented mandatory commercial recycling laws.
Some of these penalties from your hauler might be legitimate, but we tend to find that recycling contamination fees have become a major profit center for waste management companies.
You should be getting an explanation of why you’re being charged and what was contaminated. For example, were your cardboard boxes so soiled with food waste that they needed to be diverted to a landfill? Or are your employees just throwing clean plastics in with your garbage instead of recycling it?
Transparency here can help you fix errors to avoid legitimate penalties moving forward. But what’s worse is that a lack of transparency could mean that you’re being penalized for violations you didn’t actually commit.
8. High Dumpster Rental Fees
Most of the big haulers require businesses to rent or lease containers. This is typically to ensure compatibility with their truck dimensions and helps them maintain control over the service.
Rental fees are also a huge profit for waste management companies because they’re obviously required for the service.
If possible, buying your own commercial dumpster is almost always going to be cheaper than renting one. You just need to make sure you have a hauler who will service that container.
But if buying isn’t an option, it doesn’t mean you should be getting killed with sky-high container rental fees. It’s definitely worth negotiating this fee or exploring alternatives, as it could save you thousands of dollars every year.
9. Your Contract Has Built-in Escalation Clauses
One commonality that we see in most waste service contracts is that they auto-renew if you don’t negotiate new terms by a set date. But what’s even worse than an auto-renewal clause is built-in escalation clauses that guarantee annual rate increases upon renewal.
Often referred to as an “evergreen” clause or self-renewal provision, these contractual agreements allow waste management companies to increase the service rate each year.
Sometimes they’re tied to a combination of inflation or CPI, but whatever the case might be, it means you’re paying more money automatically.
Some adjustments are reasonable. But if your rate increases are above the consumer price index or the contract doesn’t specify caps on the rate hikes, it means you’re likely overpaying.
Plus, escalations should only apply to base rates. If they’re being applied to all fees, then you’re definitely overpaying. Over five years, an escalation clause can easily increase your total waste removal costs by 20-30% or more.
10. Your Business Uses One of the Big National Haulers
If you’re using one of the big national waste management companies instead of a local alternative, there’s a good chance you’re paying too much to remove commercial waste.
- Waste Management
- Republic Services
- Clean Harbors
- Waste Connections
- Stericycle
- Casella Waste Systems
- Waste Pro USA
- US Ecology
- Advanced Disposal
- USA Hauling and Recycling
These are some of the biggest companies out there.
They know it, and they use their branding to their advantage when it comes to setting your rates. That’s why all of these companies consistently generate billions of dollars.
For publicly traded companies, you can quickly look up exactly how much they’re making. Everything they do is designed to generate more money for shareholders. For example, Waste Management generated $5.39 billion in net cash last year. That’s a 14.2% increase from the year before.
I’m not suggesting you switch companies. There’s still room for negotiation with your existing hauler.
11. You Just Have a Gut Feeling That You’re Overpaying
Sometimes you just know you’re paying too much for waste removal.
It could be the sticker shock of your latest bill without knowing the actual breakdown. Or you know that you’ve been neglecting these costs because “it’s just garbage.”
Whatever the case may be, there’s a reason why you landed on this page.
Follow your gut and spend 20-30 minutes looking at your statements and comparing what you see against the other red flags that you’re overpaying. Best-case scenario is that your gut was wrong, and you spent 30 minutes to find out you’re not wasting thousands of dollars.
At worst, your gut feeling was right and you’ll need to spend more time getting things straightened out.
If you feel like you don’t have the time to audit your invoices or negotiate with your hauler, let our team here at The Cost Guards handle this on your behalf. Contact us today for a free audit.