How the Consumer Price Index Impacts Trash and Recycling Disposal
At SAV-ON we monitor the Consumer Price Index (CPI) for “garbage and trash collection” and fuel since they are inflation gauges that directly impact our clients’ costs. From 2000 thru 2021 the average annual CPI was 2.5% for waste disposal, this can be monitored at the US Bureau of Labor Statistics website www.bls.gov/cpi. The highest year on record was 7.1% in 2018 this was a direct reflection of China pulling out of the recycling industry. The CPI trend is up, since 2020 the CPI average is 4.6% for waste disposal. 2022 trends look like it could be a record CPI year for waste and recycling disposal. This does not fully take into account the price increase influence, the CPI for fuel in the past year is up 50% and many haulers have a separate line item calculated monthly based on the price of the monthly fuel index. Most haulers have a specific diesel fuel index calculation that they use for your monthly fuel fee and it fluctuates monthly based on the indexes.
Update December 2022– The CPI for Garbage and Trash Collection for the previous 12 months came in at 6.6% and fails to beat the 2018 high tide mark of 7.1%. That’s the good news, the bad news is with record fuel and metal costs, the waste disposal industry is setting record rate increases and fee increases in many North American markets. Haulers are leveraging mainstream media inflation talks to increase costs and fees and consumers are accepting it as the price of doing business. We have seen aggressive rate increases and in some cases, haulers have doubled and even tripled some fees like the “overage fees”.
SAVON has performed thousands of trash and recycling audits for commercial clients since 2010 and on average I would say our clients were experiencing annual price increases (before our review) of 10-20%, this is during a period where the CPI averaged only 2.5%. How is this possible? The CPI was nearly double that in 2021 (4.8%) and we are seeing haulers moving aggressively to increase rates and fees to ensure profits in 2022 and into 2023.
We all can monitor gas/diesel prices easily as we drive around town and since the competition is great for fuel, prices at the pump are in direct correlation to the CPI. That is not the case for Trash and Recycling disposal because a hauler does not publish their rates. Our national database of clients has those rates, we leverage our database and fact analysis like the CPI to lower our client’s rates. We also use billing errors to leverage even greater results.
Large companies have in-house procurement teams to keep costs low and audit invoices. Small and medium-sized companies often are too busy to review disposal invoices and monitor market trends. National Waste Consulting is all we have done at SAV-ON for 12 years and I have a degree in Waste Management. We get results and our testimonials page is full of clients’ success stories/case studies, many influenced by our understanding of the Consumer Price Index and its impacts on trash disposal, recycling disposal, hazardous waste, and medical waste disposal.
SAV-ON Waste Solutions is a waste management consulting company that has successfully audited thousands of commercial trash and recycling accounts nationwide to help their clients reduce waste disposal costs and improve efficiencies/processes/equipment. We offer a risk-free shared-savings approach to waste consulting so there is no upfront cost for our services.