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Evolution of the Garbage Industry

Sun, Dec 13, 2015 at 11:25AM

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The waste industry, as all of us know, is always extremely competitive. Many times, the average salesman will do or promise anything to gain a new customer and meet a quota. The realistic fact is that our industry is too costly to continue to work under this mantra. It’s very easy for our customers to complain over an increase when the reason hasn’t been explained. I find that once a customer is given the reason for an increase, it is acceptable. Reasons for price increases can be for a number of things, all depending on how we run our businesses. The main point I plan to make is: do not be afraid to charge for the risk we all take to collect and dispose garbage and recyclables safely and properly.

Increasing Pricing

Let’s break down a simple sale. Think about all of the assets moving and non-moving, that have to touch an account from setup to servicing. If I sold a 2yd front load container for 1x week service at $85 a month, it breaks down to under $19.76 of revenue per visit. The initial container cost of $400, the truck that services the account is upwards of $300,000 new, and the employee driving the truck makes $20 to 25 per hour. Using this as an example, I urge our industry to get and demand better pricing. The cost of good employees, the cost of insurance, operational cost and managerial cost continue to rise. A question I always hear about through the industry is: why must we work for cheap? Our industry, depending on where you look, is ranked anywhere from the 4th to 6th most dangerous occupations in the world. Am I the only one that scratches my head at the dot-com companies that have better margins with zero risk?

The industry occupational danger ranking could change if the industry as a whole demanded higher compensation for services. To be honest, the larger companies do have it figured out when it comes to increased pricing, and that is why, in my opinion, they are successful. The composition of the waste industry, once you get past the larger companies—Waste Management, Republic Services, WCA, Waste Connections and Allied Waste Services—you are left with smaller private companies. This article is aimed more so at the smaller haulers to learn from the larger companies. With more revenue generated, there can and should be a budget tied directly to making your company safer. With a large enough budget, you can afford to employ a safety director, and other staff members, to ensure every employee is doing their part to make our industry safer as a whole and improving on the “dangerous occupations” rankings.

Creating a Safer Workforce

In my opinion, this change is inevitable due to the evolution of the regulations set for our industry. The cost and capital needed to start a company will no longer allow the “average joe” to buy an old diesel truck for $30,000 and operate out of a field. It will only be a matter of time when pre-regeneration diesel trucks eventually die out of service, and fade into the sunset as hood ornaments or conversation pieces. The only trucks left will be from the regenera and greater, and the cost of operating these trucks are significantly higher. Waste Management under Harry Wayne Huizenga, started as a one-truck operator. It is now the world’s largest waste hauler and recycler. They are the benchmark for our industry. Anyone stepping into this industry in the future will need to have industry knowledge and a good-sized bank roll. If we all can create a safer workforce in our companies, we can change the future of our industry. 

Every company big or small needs to make safety its top priority and not be afraid to raise rates. We work too hard and encounter too many risks on a daily basis as an industry to work for low rates. With increased rates, all will benefit, especially the frontline employees who put themselves directly at risk every day. | WA

John Paglia, III is a 4th generation garbage man. Before he climbed the ranks to become Florida Express Environmental’s General Manager, he had a successful career in college and professional athletics. John has been around the garbage industry since his car seat days. Currently, John is focused on growing his company and offering the highest level of customer service and prolonging the world we live in today. John wakes up every day knowing the impact professional haulers have on their community is far greater than most realize. He can be reached at (352) 629-4349, e-mail John3@floridaexpress.us or visit www.floridaexpress.us.


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