The Myth of the Corporate or National Waste and Recycling Contract
Well, it’s been a while since we had a blog post. We’ve been pretty busy with getting the new website up and running along with launching RecycleSmart, our new tracking and reporting tool for all Keystone clients.
I wanted to discuss an item that often comes up when speaking to companies with multiple locations across a large geographic area. Often a company has contracted with one of the 3 major waste hauling companies to provide waste and recycling services at all their locations. They are given a so called “preferred rate” in exchange for volume of business that they are giving to one vendor. Makes sense right, buy in bulk and save money? Anyone who has shopped at Costco or bought wholesale knows how this basic business principle works.
Well, not so fast. While it’s true that by consolidating vendors and using purchasing leverage a company can drive down procurement costs. But the waste industry is unique in that the local characteristics in each market largely determine the how competitive a particular hauler can be in any given market. And often the large hauling companies don’t serve the smaller towns and villages so they end up sub contracting the service to the local hauler anyway, while making mark up on the service at the expense of their customer.
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