United States
                        Environmental Protection
                        Agency
                        Solid Waste
                        and Emergency Response
                        (5306W)
EPA530-F-96-016
November 1996
vvEPA
Pick  Up  Savings:

Adjusting  Hauling  Services

While  Reducing  Waste

          aste reduction yields numerous environmental and economic benefits
          for businesses. By preventing waste and recycling, companies use
          fewer raw materials, thereby conserving natural resources, minimizing
energy use, and reducing pollution. Waste reduction also saves companies
money—through reduced purchasing and operating costs, decreased storage costs,
and increased recycling revenues. In fact, adjusting hauling services to reflect
reduced volumes of waste can add up to tremendous dollar savings through
decreased hauler fees, avoided disposal charges, maximized recycling revenues, and
lower equipment maintenance and service costs. This publication is designed to
help you evaluate your current hauling services to see your waste reduction results
reflected in your company's bottom line.
  Although hauling and disposal costs vary widely across the country, every ton
of waste avoided can help your company save money. Waste reduction activities
that directly reduce the amount of waste generated at your company, such as
switching to reusable dishware, preventing office paper waste, and reusing incom-
                ing packaging for outgoing shipments, can result in lower
                 hauling and disposal costs.  (Although activities for reduc-
                 ing materials sent out of your company, such as lightweight-
                 ing or two-sided billing, may not directly affect your waste
                 hauling and disposal costs, they can reduce purchasing and
                       other costs.)
                                                       WASTE
                                         This publication was developed
                                         by WasteWi$e, EPA's voluntary
                                         program, which assists businesses
                                         in taking cost-effective actions to
                                         reduce solid waste through
                                         waste prevention, recycling, and
                                         buying recycled products.

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L-.
        Cost-Cutting
        Opportunities to
        Consider:
        • Can frequency of service be reduced?
        • Are you charged per pickup regardless of
          the amount disposed of?
                                    Review Your Hauliing  Service
           hether you are fine-tuning service or completely rebidding your
           hauling contract, you have many opportunities to cut costs.
           Take a periodic look at your waste hauling services to ensure
that you are getting the services you need.  Get input from key staff mem-
bers within your organization including your facility manager, accounts
       payable department, and housekeeping personnel or vendor to find
         out when your current contract expires and whether it is flexible
         enough to meet your changing needs.

            If you lease office space you may also be able to significantly
         reduce costs by negotiating with your property manager or realtor
         to adjust service and reduce fees to reflect your reduced waste dis-
         posal. Even if you are unable to make immediate adjustments,
         you can take the opportunity now to identify where you can
         reduce costs later when your contract is up for renewal.
          Could you save money by renting fewer
          (or smaller) disposal containers?
          Is there an opportunity to get a more
          competitive bid?
          Are there opportunities to obtain better
          prices for recyclables?
           Waste reduction programs can reduce hauling and disposal
         costs by enabling you to reduce the frequency of pickups, dis-
         posal facility charges, and the number of disposal containers
         needed. Revenues from increased recycling activities can also
         help offset disposal costs. In order to achieve these results, your
         company will need to take three basic steps: (1) analyze your
         current hauling service and costs, (2) identify areas for potential
        sayings, and (3) revise or rebid your hauling services as needed.
Here are some suggestions for performing each of these steps, to ensure a
desirable level of service.

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1
Analyze your
disposal operations
and costs
   ANALYZING YOUR WASTE HAULING AND DISPOSAL COSTS
                                             :;-;' J&t AN^ALCOSIU
                                      lrash''cofttatn'ertenfa.
    To get an overview of the specific
  costs associated with your current
  service, review your hauling records
  and/or talk to your hauler. It may
  be helpful to find out the following:
  • Are disposal facility charges broken
    out as a cost item on the hauler's
    bill? If so, is your company charged
    by actual weight or by volume?
  • How much do container rentals
    cost? Are smaller containers signifi-
    cantly cheaper to rent than larger
    containers?
  • How much does it cost to haul
    containers to the disposal facility?
  • How much does it cost to pick up
    recyclables?
  • How much are you paid for col-
    lected recyclables?
    Analyzing your waste hauling and
  disposal costs should help you iden-
  tify how your hauler determines
  your company's costs. It may be
  helpful to develop a chart, similar to
  the one on die right, breaking down
  your waste hauling and disposal costs
            fee  '^;,
, (picup leej,,  -j,  '"     t*P>
                                                                                 wks) ~
                                                                                              *
                               :,5f seriatefrdnD"pickup
                                                                                          :W   ' £
                               !;'TOTAl4C,OSTS
                               * Your contractor (s) may itemize costs differently. For example, items such as recycling and trash haul-
                               ing fees, or transportation and disposal facility charges, may be combined into one item.
                               into their various components. If
                               you rent, work with your property
                               manager or realtor to get the neces-
                               sary data. Akhough your hauling bill
                               probably itemizes costs differendy
                               than die chart above, understanding
                               how you are charged for each item
                               will help you better negotiate widi
                               your hauler when the amount of
                               waste to be picked up has been
                               reduced.
                                   2
Identify areas for
potential  savings
                                     To identify potential savings, you
                                   need to monitor your current opera-
                                   tions. Consider assigning an
                                   employee or a team of employees to

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monitor disposal containers when
they are emptied. (Periodic spot
checks may be sufficient.) If con-
tainers are not always full when ser-
viced, less frequent pickups or
smaller containers may be hi order.
Understanding the specific waste
disposal costs associated with your
company (see step 1) will help you
determine where savings may best
be achieved. If you know that pick-
up costs are more expensive than
container rental costs, for example,
you may want to  ask the hauler to
make fewer pickups, rather than
decreasing the number of containers
rented and maintaining the current
pickup schedule. Some questions to
ask include:
How many times a. week are your
containers picked up and how foil
are they when picked up?
If containers are not foil, how often
would you estimate pickup should
occur to ensure foil containers?
Could fewer or smaller disposal
containers be used (saving rental or
maintenance costs)?
Would using pressure gauges on
your compactors to determine
capacity help to reduce the
frequency of pickups?
Will the hauler provide "as need-
ed" pickup service rather than a
predetermined schedule?
What additional materials could
you reduce or recycle?
                                   3
    Revise  or rebid
    if necessary
                                      After you review your situation,
                                    if you think changes are necessary,
                                    decide whether to work with your
                                    hauler to adjust the current situa-
                                         tion or look into rebidding
                                         your contract when it expires.

If your contract does not allow you
to adjust die frequency of pickups
(thereby saving costs when fewer
pickups are needed), you may want
to specify this adjustment when your
contract comes up for renewal. Also
consider specifying a review and
renewal clause, which would allow
you to make such adjustments in
your contract at specified intervals.
   If you need additional informa-
tion on service contracts, many
resources are available. An  example
is Trash Collection and Recycling: A
Guide to Specifying and Obtaining
Services by Property Management
Association, Inc., which focuses on
trash removal and recycling for
property managers.
   If you decide to rebid, your goal
should be an effective agreement
that leaves nothing to assump-
tions—and yet allows flexibility for
your company's changing condi-
tions. The following seven steps will
help you obtain competitive bids for
hauling services.

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Measure your waste accu-
rately. Knowing the volume or
weight of the waste you generate
is the key starting point for
obtaining competitive bids.
Measure for at least a week, and
be sure to account  for any sea-
sonal variations or  changes in
occupancy. If seasonal variations
exist, you may want to contract
different levels of service for dif-
ferent seasons. Also, take a closer
look at various solid waste com-
ponents—something that may
seem like garbage to you may be
of value to others. Resources such
as EPA's Business Guide for
Reducing Solid Waste (EPA/530-
K-92-004) contain step-by-step
guidance on performing waste
audits. This guide can be ordered
by calling EPA's RCRA Hotline
at 800 424-9346.

Talk to other local business-
es in your industry to find
out what they are paying
for waste removal, and ask
if they can refer you to a
hauler in your area. Check
the hauler's references and deter-
mine if they have the qualifica-
tions you require. When
obtaining a reference on haulers,
consider the following questions:
-How accurate have the hauler's
audits been?
-How effective have their recom-
mendations been?
-Have their pickups been on time?
-Have they cleaned up?
-Do they maintain the equipment
well?
If relevant, you may want to ask:
-Have they provided assistance with
respect to getting recycling programs
up and running?
It can also be helpful to review
business journal articles and
trade publications about sec-
ondary materials for information
on rates for recyclables and waste
removal fees.

Write a concise bid solici-
tation including:
-A brief facility description
including drawings of the loca-
tions of containers.
-Volume of each type of material
you generate each week or month.

-Time frame in which you expect
these volumes to be collected (e.g.,
before 8 a.m., 3 days a week).

-Equipment you have or need (e.g.,
baler, compactor, storage bins).

-Length of the contract and can-
cellation provisions.

-Any particular requirements you
have of the contractor (e.g.,
insurance information, waste
license numbers, references, a
requirement of verification from
the hauler on actual weights and
volumes, and other reports you
require of the contractor).

-Request for available recycling
and waste reduction services
offered by the hauler.
  Friendly Advice When Rebidding
  Your Hauling  Contract:
  •  Require a cap on yearly increases during the contract term.
  • , Ensure the ability to change the type and size of disposal
     containers, the number of pickups, and the time of pickups
     without penalty.
  •  Don't get tied into a contract with automatic renewal.  Make
     sure you ihave the option to renew with similar terms.

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Consider whether to bid
trash and recycling services
together or separately.
While using one company for
both services may be convenient,
using two or more companies
often optimizes recycling, and
saves you more on your trash
bill. If you use more than one
contractor, don't forget to calcu-
late your cost for time spent due
to increased management over-
sight. Be aware that charging
companies up-front for recycling
collection services then reimburs-
ing them for recycling revenues
after materials are sold is not
unusual.
Send bid solicitations to a
minimum of three to five
companies including your
current hauler. Doing so will
allow you to compare service lev-
els and prices. You may want to
consider the following:
-Where do assumptions and
approaches differ and what will
that mean to you?
-Does one contractor offer a lower
rate because its fees are lower, or
because it is estimating use of
smaller receptacles or fewer pickups?
-How will the price be affected if
their estimates are off?
-Who is responsible for contamina-
tion of recyclables?
-What is the charge?
Lowest price is not always best.
Consider best value instead.
Let  potential contractors
review your operations
before bidding. Offer to
make an appointment to show
potential contractors your facili-
ty. Consider having potential
contractors conduct an audit.
Allow 3 to 4 weeks for contrac-
tors to respond and set up
appointments.
Have an attorney review
your contract before sign-
ing  it. Read the fine print. Be
aware that many standard con-
tracts offer a termination clause
allowing you to terminate with
90 days notice, but they may
include a liquidated damages
clause (e.g., payment of 2
months in service charges). Make
sure  you know who owns the
   recyclables. If you decide to recy-
   cle something, you may not want
   to be giving away those potential
   revenues.
  Once a hauler is selected, a repre-
sentative of the owner or property
manager should watch the hauler
perform from time to time to deter-
mine whether or not contract speci-
fications are being followed. Also,
the hauler should furnish a contact
person who can make service
adjustments as necessary.
This publication uses informa-
tion contained in the
following documents:
Business Peer Match  Recycling Program.
Dumpster Diving: Cash for Trash.
Monroe County, NY.
Philadelphia Streets Department
Recycling Office. "How to Get a
Competitive Bid." Reading: We Mean
Business - A Guide to Turning
Philadelphia's Commercial Recycling
Regulations Into An  Opportunity.
Philadelphia, PA, 1995.

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  State  Farm:  Enhanced
  Brings  Lower Disposal  Costs
          "^                       -=:-'&, < jA   .        ' '&£?&' '
t
I
\
I
      State Farm Mutual
      Automobile Insurance
      Company, headquartered in
Bloomington, Illinois, has cut dis-
posal costs by 50 percent since
1990 as a result of aggressive waste
reduction activities and associated
adjustments in disposal services.
Over the same period of time, the
number of employees at participat-
ing State Farm facilities has
increased by more than 2Q percent
  State Farm offices use perma-
nentdishware, flatware, and mugs
in	cafeterias^and.jeuse^shipping
materials, corrugated containers,
pallets, binders, and other office
products. By viewing reports on
Hnes State Farm's Systems Division
eliminated millions of pages of
paj>er. In addition, State Farm
 ""     ^ •> s n ^ f^^f  ""   ^    ^£>* fe***^
- material la. 1995, restimng in
 recycling'rate ofr5,0 percent:' ^

    Less waste translates into
          '  ' K"^£"   *J$T,~f
 disposal costs tor-State Fatm because
 designated employe^^
 facilities perbcUcaEy monitor thetr'''
 ,  >t**r   - .~$»*^;"  i,;:^^**
 level of ser^ce,;S£atB^arrn;offices
:        ; '>3%j ''•'     - -v-p'- *-
 are encouraged to negotiate 1-;
 contracts with local haulers'to,.
 vide more.
   '<$*-•'    ^ ,  -if-  i-' "t- '-   -"'
   5n'trac^dir^y^J>f haujin|ser-s

>5t6sts usuay.f -are^ included 'in th.e|r>A:;-";
 4easi'aOTeetaent Either way»,,Stal:e:-, - •'''
  -r :  -ly'L  ••*$?'"•#**''.   •-:• y
  Bum has,feri;able to save mpney>; ./,-
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                                                                 ' ''   ' ,^&%&>*'ff^'f J'''"" '  '   f, vjrv4V*f'"     '
                                                                        iafi.foflandM'avoidanceli^;';
                                 ' Some'officesmve
                                  haulers^, estaoM«
                                "• •*•.' «  ^'J<"^«-!;-
                                  tainers ,ar,e full ""
                                  instead of routine
                                  'pickup schedtllf'
                                  facilities
 vvEPA
    United States
    Environmental Protection Agency
    (5306W)
    401 M Street, SW.
    Washington, DC 20460
    Official Business
    Penalty for Private Use
    $300

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