Waste Management Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 18,700 waste management companies in the US provide hazardous and nonhazardous waste collection, hauling, and treatment; operation of transfer stations and landfills; septic system pumping; and remediation including specialized cleanup of contaminated buildings, mine sites, soil, or ground water. About 66% of industry sales receipts come from services to businesses, organizations, and farms; 19% to residences; and 15% to government.

Worker Injury

Workers are exposed to a wide variety of risks including contact with contaminated and hazardous materials in trash and remediation sites, working with heavy machinery, and handling curbside trash bins near traffic.

Vertical Integration

Waste management companies are using vertical integration to control their waste streams, broaden services, cut costs, and improve profitability.

Industry size & Structure

The average waste management company operates out of a single location, employs 23-24 workers, and generates about $5-6 million annually.

    • The waste management industry consists of about 18,700 firms that employ about 445,700 workers and generate about $110 billion annually.
    • Average revenue per employee is about $246,000.
    • The industry is concentrated at the top with the four largest firms controlling 29% of revenue. Otherwise, the industry is fragmented with many companies offering one or a few types of waste services.
    • Major US companies include Waste Management, Republic Services, WCA Waste, and Stericycle.
                                      Industry Forecast
                                      Waste Management Services Industry Growth

                                      Coronavirus Update

                                      Jan 6, 2022 - Omicron Disrupts Waste Collection
                                      • While current CDC and OSHA guidance say that no additional precautions are needed to handle solid waste that might be infected beyond standard personal protective equipment used for medical waste, several operators have also made operational changes such as staggering collection shifts and starting shifts earlier to avoid crowds. Distancing issues may lessen as more workers become vaccinated. On April 19, all Americans over age 16 became eligible to be vaccinated. Some waste management firms have developed campaigns that incentivize vaccination, including paid time off to receive vaccines and waving quarantine requirements once employees return to work after being on vacation.
                                      • Collection volume shifted from commercial to residential as businesses temporarily shuttered and more people work and shelter at home. Waste streams saw significant upticks in glass, plastics, and aluminum. Growth in online shopping and meal delivery is generating more corrugated and paperboard box waste. As businesses reopen, residential and commercial waste levels have gradually shifted back toward the pre-pandemic balance. Rising COVID-19 cases amid the rapid spread of the Delta variant of coronavirus during the summer slowed traffic for many types of businesses in hard-hit communities. Infection rates began to slow in mid-September but then began rising rapidly in December amid the spread of the Omicron variant.
                                      • Waste collection and recycling firms enjoyed strong revenue growth in the third quarter of 2021 compared to the same period in 2020. Houston-based Waste Management’s revenue grew 20.8% in Q3 2021 compared to Q3 2020. Republic Services saw a 14% increase in revenue, while Waste Connections’ revenue enjoyed a 14.9% jump in Q3 2021. Much of the revenue increases in Q3 were due to broad-based improvements in collection (residential, commercial, and industrial) and other revenue sources. Recycling revenues got a boost from an improving economy and higher commodities pricing. As a whole, the US waste management and remediation services industry saw a revenue increase of 4.6% in Q3 2021 compared to Q2 2021, according to the US Census Bureau. Revenue was up 13.5% compared to Q3 2020.
                                      • Waste disposal contracts with local governments are often fixed, so higher waste collection and management volumes can affect a company’s bottom line. Industry insiders suggest waste management companies may be pressured to reduce fees as municipal contracts are renegotiated and renewed. The third round of stimulus, the $1.9 trillion American Rescue Plan Act passed in March 2021, included $360 billion in aid to state and local governments. In October, the National League of Cities’ City Fiscal Conditions survey showed that cities’ general fund revenues fell about 1% in 2020 and are expected to drop an additional 2% in 2021. However, more than 80% of city finance officers reported that direct federal aid has positively impacted their fiscal 2021 budgets and contributed to a more positive economic outlook.
                                      • Some waste management operations have found recyclable materials are increasingly contaminated with disposable personal protective equipment (PPE) – including masks and gloves. The concern is not so much safety but the increased costs of separating PPE from recyclable waste. The EPA has issued guidelines urging consumers to keep used masks and gloves out of recycling bins.
                                      • The huge spike in e-commerce drove up demand for old corrugated containers (OCC) used by containerboard mills to manufacture new containers. Amid the spikes in demand, OCC prices have risen through most of 2021 but began to moderate in October. The US average price for OCC in December fell 10% compared to the prior month, but prices were up 115% compared to December 2020, according to RecyclingMarkets.net. Prices for post-consumer polyethylene terephthalate (PET) bottles and jars were down 5% in December compared to the prior month but were up nearly 179% year-over-year, according to RecyclingMarkets.net. Curbside collected natural high-density polyethylene (HDPE) prices dropped 26% in December and were down more than 10% compared to year-earlier levels. Prices for polypropylene (PP) fell about 19% in December compared to the prior month but were up more than 170% over year-earlier levels. Sorted, baled aluminum can prices fell about 2% in December compared to the preceding month.
                                      • The pandemic worsened an existing labor shortage in the solid waste collection industry, according to the Solid Waste Association of North America (SWANA). Increases in consumer spending and e-commerce during the pandemic have led to a significant uptick in demand for trucking, which competes with the solid waste collection industry for drivers. Other causes for the shortage include an inability to return to work due to childcare or other family needs. As a temporary solution to labor shortages, some collection services were cut back or temporarily suspended (such as recycling and bulky item collection). Long-term fixes include emphasizing the industry as recession-resistant, boosting collection fees to pay for higher wages, and making capital investments in automated collection equipment that reduces labor requirements. Worker shortages are also driving up costs. Waste Management’s labor and benefits expenses increased nearly 18% year-over-year in the third quarter of 2021.
                                      • Some municipalities that operate their waste management and recycling services are implementing vaccination requirements for workers, according to data compiled by the National League of Cities (NLC). Cities that are requiring public-sector waste employees to be vaccinated include Los Angeles; New York; Philadelphia; Washington DC; Denver; Raleigh, North Carolina; and Dayton, Ohio. On September 9, the Biden Administration announced that businesses with more than 100 employees would have to require their workers to be vaccinated or be subject to at least weekly COVID-19 testing and masking requirements, according to The Wall Street Journal. The requirements will be implemented through a temporary standard issued by the Labor Department’s Occupational Safety and Health Administration (OSHA). The temporary standard went into effect on November 5 and compels affected companies to require their employees to be vaccinated or face testing and masking protocols. On November 6, the 5th US Circuit Court of Appeals temporarily blocked the OHSA rule due to potential “grave statutory and constitutional issues.” More than two dozen states, business groups, individual businesses, labor unions, and religious organizations sued to block the OSHA rule. Due to lawsuits in several circuit courts, federal law required them to be consolidated and heard in a single court chosen by lottery. In mid-November, the lottery was held, and the case was set to be heard in the Sixth US Circuit Court of Appeals. On December 17, the Sixth US Circuit Court of Appeals overturned the lower court’s ruling, and some businesses immediately appealed the ruling to the Supreme Court. The Labor Department has extended the deadline for compliance with the OSHA rules’ full enforcement from January 4 to February 9. Of the 18,690 waste management and remediation firms in the US, only about 600 have more than 100 employees, according to the US Census Bureau.
                                      • The rapid rise of new COVID-19 cases fueled by the Omicron variant of the coronavirus has disrupted some trash and recycling collection operations, according to Waste Dive. Unlike previous waves, which tended to be regional, the Omicron variant is causing problems for sanitation operations nationwide. The disruptions came at a time when waste collection volumes were up due to the holidays, and winter weather, which can complicate collection operations. Worker shortages and collection delays have been reported in New York City, Atlanta, the Minneapolis-St. Paul metro region, Central New Jersey, New Orleans, Philadelphia, and the South Florida and North Texas regions. Some sanitation departments have reported absentee rates as high as 25%, according to the Solid Waste Association of North America (SWANA). However, Omicron is thought to cause less severe illness than previous variants, and waste management insiders anticipate improving conditions by the end of January.
                                      Get A Demo

                                      Vertical IQ’s Industry Intelligence Platform

                                      See for yourself why nearly 40,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

                                      Build valuable, lasting relationships by having smarter conversations -
                                      check out Vertical IQ today.

                                      Request A Demo