The Rising Cost of Waste – Keep Your Waste Costs Under Control

Published Tuesday 2nd February 2021

Cutting the cost of waste disposal

The cost of waste disposal is increasing at a rate well above inflation and is set to rise further during 2021 in spite of the economic downturn. However, proactive organisations are fighting back by focusing on waste minimisation, recycling and tighter supplier management.

There are several key factors which are having an upward effect on prices charged by waste contractors:

Market Forces

Driver shortages, changes in international legislation or threats of changes, the Coronavirus pandemic, the rising cost of fuel and a shortage of empty shipping containers in Asia and bottlenecks at the UK’s deep sea ports are behind the problems. Certain wastes are classed as commodities and feel the effect of market forces more than others.

Material sales

Demand for recycled materials, a rapidly increasing source of revenue in recent years, has been severely affected by reducing global manufacturing output. For example, Chinese reprocessors who have historically paid large amounts for certain materials have closed their borders to other countries ‘rubbish’. Alternative disposal outlets have been identified, but this has driven the cost of waste disposal up.

Landfill costs

The government’s annual Landfill Tax “escalator” will increase again in April 2021, increasing the rate of disposal. To compound the issue further, landfill capacity is reducing as sites are filling up faster than new waste disposal facilities are coming on stream, leading operators to increase their charges in other areas.

Understandably, waste management companies are trying to pass on the effects of these changes through price increases to their customers. A common ploy, however, is for them to use this opportunity to increase their profit margins at the same time.

What should you be doing?

1. Annually seek out the best price through a formal tender process, otherwise the cumulative effect of regular increases will erode the competitiveness of even the best initial contract pricing;
2. Make sure that annual increases applied by waste contractors are fully justified and reflect true increases in disposal and transportation costs;
3. Conduct a detailed waste audit to ensure optimal segregation and recycling, thereby minimising expensive General Waste charges;
4. Ensure you select suppliers who can provide the most cost-effective range of disposal and recycling services for your waste streams.
5. Are you getting the correct rebates for materials of value. Fluctuations in markets are good excuses to reduce prices – are these in line with what is going on? Despite everything above, scrap metal, plastic and cardboard prices have increased recently – have your prices increased?

Do you need help? Talk to an expert.

About the Author: Daniel Howells, through his experience in the waste management contracting field, Daniel has a wealth of knowledge regarding the industry. Daniel has previously worked with the Chartered Institute of Waste Management Head Office in Northampton, helping CIWM’s clients to become more sustainable and manage their waste and resources more effectively.