By: Michael P. Smith
The President of an independent hospital consulting organization specializing in cost containment and sustainability recently alerted me about the practices of some RMW haulers and how their pricing isn't as straightforward as they would have their clients believe. In fact, this consultant’s experience leads him to say that their pricing can be up to 50% higher than the price per pound quoted in their contract language. Waste haulers generate the additional revenue by adding all kinds of ancillary charges to the invoice. There is language within their contract that allows the hauler to pass along price increases when their variable costs increase outside of their control. The consultant spoke about the different charges he sees that are levied to a facility and how they are worded. I thought there might be a benefit by knowing their terminology. This is offered as a means of creating an awareness with perspective clients to look deeper into their pricing than the cost per pound number that appears in their contract. Often a review with Accounts Payable reveal unexpected and significant additional charges.
Here are some of the terms:
Documentation Fees (required by some states). Each waste generator is required to weigh their waste before turning it over to the company transporting it to the incinerator or processing site. Haulers often say to the facility; "why buy a scale and use your people’s time to weigh the waste- we can do that for you for a small fee". The fee can be up to $4.00/container. The hauler also weighs the RMW so they can bill the client in accordance with their agreement. Looks like they get paid twice for the same function.
Fuel Surcharge- As the price of fuel goes vacillates haulers use this fee to offset their costs. They are quick on the trigger to institute this fee but very slow to remove it. This is a very common charge.
Landfill Tipping fee - The cost of dumping at the landfill. This charge is levied to each customer who has waste on the truck hauling waste to the landfill. The charge is $40-80.00 per customer per load dumped.
Minimum Fee- This is to cover the cost of showing up to a small volume generator where the cost per pound revenue is small.
Missed Pick Up Fee- Waste wasn't ready at the assigned pick up time and you missed the pick up? There can be a fee for that.
Environmental Fee- for hauling long distances. This is a variable fee.
Rental fees -Monthly expense for the rental of a 30 or 40 yard roll off container.
Dumpster Exchange Fee – For exchanging dumpster on facility’s site.
There are probablly others.
When you do your financial review and analysis be aware that there can be more to a waste haulers agreed upon price per pound of waste collected, sometimes a lot more.
