I have worked with and for several waste brokers over the last 30 years and I am going to be really honest – possibly even ruffle a few feathers in writing this piece. But I feel it is important for a business to understand all aspects of working with a broker rather than directly with a waste supplier.
Waster brokers can provide the convenience of a single contract and work directly with the waste suppliers, coordinating services amongst many suppliers that collect different types of waste material. The idea being so you as a business have one less thing to think about and the broker deals with any issues with collections etc.
While billing consolidation is convenient, using a broker removes a business’ ability to:
- Decide which waste contractor they would prefer to use and, on most occasions
- You are unable to see the actual the waste contractors’ invoice for waste removal.
- Take ownership and control of YOUR sustainability journey
How it works
- You look for a waste broker online to give you a quote to dispose of your waste.
- Once found you place a request for a quote.
- They take a contractor who is able to provide a service from their own supply chain.
- Contractor quotes the broker a price then the broker will a mark-up on that cost with whatever percentage they want and submit the quote to you for approval.
- You the client accept the quote because its below your current costs.
Things To Consider When Deciding Whether to Use A Waste Broker
Little control over contactor selection
You will have little or no control over waste supplier selection or changes in suppliers. If the service is poor, you may be stuck with them. Or you may simply be caught in a revolving door of new service providers.
Your broker could decide to bid out the route on a frequent basis, leaving your staff in the role of managing constant change. Most broker contracts allow the broker to select the haulers. While some brokers may profess to consider the client’s preferences in haulers, if this arrangement isn’t contractually stipulated, you are at risk of poor performance that you can’t control.
In some markets, brokers may be aligned with suppliers and even receive financial incentives from suppliers to win your business. Because you are using a broker to negotiate the deal you may not see the contracts between the broker and the hauler, you therefore, may be unaware of the actual cost of the services, or any such incentives accepted by brokers.
Waste suppliers are pleased when the broker awards the business, but unfortunately, they can very quickly become disenfranchised by the business practices of some brokers.
Brokers don’t typically reward good service either, they bid the business out too frequently. Even worse, some brokers have a reputation for late payments. This can understandably lead to a deterioration in the relationship between the broker and the supplier and leave you, the customer with a less than satisfactory service.
Brokers will switch waste suppliers and pocket 100% of the savings. Typically, a client will agree to a fee for services and sign a contract with the broker for a period of years. Then, in markets where competition is high, the broker will rebid the services and award the job to a lower bidder. In this case, the broker can change haulers from the higher to the lower cost service provider and keep 100% of the savings. So you as the customer are no longer benefitting from the cost savings from the brokerage service that you had signed up for in the first place.
If you use a broker, you are relying on the broker to manage your waste program and optimise it on your behalf. Your waste broker is not likely to provide you with process metrics such as:
- Total cost by location
- Total cost by supplier
- Cost per cubic yard, by location
- Cost per cubic yard, by supplier
- Locations with the most additional service orders
- Suppliers with most invoice errors
- Recycling/diversion rates by location
You should be asking your broker:
- Are they on the road to sustainability? What are their green credentials? What evidence can they supply? For example, promoting the ISO 14001 certification does not make them sustainable.
- Does the broker audit its waste suppliers? Including, its second and in some cases third party suppliers? How does this fit in for example reducing the carbon footprint throughout their supply chain?
- Does the broker work with waste suppliers with zero to landfill commitments?
- Does the broker check the supplier against compliance with environmental legislation, for example checking the supplier has not been prosecuted for breaking the law?
This year there has seen an increasing number of large fines, some fines into the millions, with environmental penalties set to becoming more significant. This can have a knock-on effect to your brand if there is a connection with your business.
So, what are your choices?
Many businesses believe the only options they have available to manage their waste are self-manage or use a broker. However, the reality is that you have three distinct options:
- Sustainable Consultant to manage your waste suppliers’ credentials and whilst you maintain control.
The advantages of working with a sustainable consultant are:
- Full transparency of any financial contracts and getting you the best all round deal – not just based solely on cost saving
- Ensuring that you are meeting or working towards your sustainability commitments
- Checking that your waste suppliers are complying with the environmental legislation
- Creating a robust supply chain that is accountable