While laying out a set of bold predictions and educated analysis are generally open to interpretation, one trend for 2022 isn’t up for debate: The cost of solid waste and recycling is rising.
Numerous factors have led to year-over-year increase for the cost of doing business as it relates to managing byproducts and waste materials. And when working with traditional haulers, offloading this trash responsibly undoubtedly comes with a hefty price tag.
So, as a convergence of new trends stands to disrupt solid waste management, we’re zeroing in on how much each might cost you—and providing a plan to contain them.
Landfills Are Filling Up Faster Than Predicted
Landfills are expensive to run—between $1.1M and $1.7M to construct, operate, and close. To pay for the initial investment and continue on to turn a profit, landfill operators charge a permission-to-dump payment called a tipping fee. These fees have risen 133% over the past three decades.
And there isn’t a situation where they’ll go down, especially as landfill space will be at a premium.
As we covered in our post Landfills: We’re Running Out of Space, a 2015 analysis provided a realistic timeframe for our landfill crisis.
“‘Seven states are looking at running out of landfill space in the next five years, one state will reach capacity in five to 10 years and three states have 11 to 20 years to go. But 22 states have available landfill space for decades to come.’
Nationally, that examination put us at 62 years until all of our currently operating facilities are stuffed to the gills.”
There are New Methane Emission Standards for Landfills
In May 2021, the EPA instituted a rule that effectively lowers the emissions threshold for when landfills must install greenhouse gas collection systems. Worsening the issue, Americans are annually wasting between 73M to 152M of food per year—a number that’s growing, not shrinking. Once in landfill, rotting food accounts for 9% of human-caused methane emissions.
With necessary, and incredibly expensive, collection technology looking inevitable for landfill operators, tipping fees will likely surge to cover costs, raising the overall price of waste management.
M&A in the Waste Industry Reduces Competition
Mergers and acquisitions have always been a part of the waste management industry, but with pandemic fatigue and headwinds from increased scrutiny on excess waste, rollups are accelerating. In 2021, North America’s five publicly traded solid waste companies made an estimated $3.46B in acquisitions.
55% of MRFs, the centerpiece of the North American recycling landscape, are owned by and operated by just four companies. Against this pressure, independent and family-owned waste fleets are bought up, reducing competition and possibly reducing your business’s ability to negotiate contracts and rates.
Recycling Has Washington’s Attention
On America Recycles Day in 2020, the EPA unveiled a first-ever national recycling goal. It wants to take our 32% recycling rate to 50% by 2030. A year after making the announcement, their late-2021 report shed light on how important recycling and a circular economy will be.
Part of a five-pronged plan, investment will be made to improve markets for recyclables, increase and improve collection/access to collection, reduce stream contamination, and standardize measurement, data collection, and reporting.
Being as the nation’s single-stream process of recycling hasn’t drastically changed in over two decades, even a small shakeup could be costly for the incumbent waste industry and the commercial businesses they serve.
The Pandemic Has Made Waste Workers More Scarce and Expensive
As we covered in a post at the height of the waste industry’s labor shortage crisis, the nation’s skeleton staff of truck drivers, mechanics, and specialized recycling facility workers broke down in summer 2021. Across the nation, the depleted collectors fell desperately behind on pickups, often indefinitely discontinuing all recycling services in order to prioritize solid waste.
Known for being an undesirable, underpaid, and sometimes dangerous vocation, waste companies have struggled to attract and retain the workforce they need. To counter the situation, the nation’s top haulers are increasing worker pay across the board while tacking on benefits like paid leave, reimbursements for education, and signing bonuses.
While, overall, a win for socioeconomics, waste and recycling companies will likely look to factor their additional labor overhead into the operational fees charged to their customers.
Need a cost containment strategy? When a business signs on with RoadRunner, we become their materials management partner, onboarding existing incumbent solid waste companies while implementing flexible recycling options customized to fit their business that keep costs in check.
Using proprietary technology and industry buying power, RoadRunner aims for cost to only trend in one direction: down.