Price Environment  - Key Takeaways

  • The average price of services is expected to decline slightly as construction and production rates slow due to rising interest rates and fuel costs fall, incentivising vendors to cut prices
  • Due to established regulations, there is little differentiation in the methods by which suppliers collect and dispose of solid waste. As a result, any operator can adequately perform services, thus providing buyers with more options during the supplier vetting process
  • Switching costs for solid waste collection and disposal services are moderate due to the associated contractual obligations and district surcharges that are applied whenever a supplier begins services
  • The total cost of ownership is moderate in this market. In general, the buyer’s total cost of ownership depends on the type and volume of solid waste being collected and disposed of, the collection location and the disposal method used
  • The only viable substitute for market services is using a waste incinerator, which cannot be used for all waste due to regulatory requirements. The solid waste collection and disposal services market provides an essential function for most buyers that cannot generally be replaced in a cost-efficient way
  • Ongoing staffing shortages for waste disposal workers are pushing vendors to offer more generous pay and benefit packages, raising the cost of employment for market providers and increasing the likelihood that they will increase service prices

Ver 1.0 (May 23)

Confidential & Proprietary | 2023 CBRE Inc.

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Ver 1.0 (May 23)

Confidential & Proprietary | 2023 CBRE Inc.

Levers

Technology 5-7%

  • Reduction of final volume of waste to landfill
  • Reduce wasted journeys

Example:

  • Smart sensor technology eliminates the cost of unnecessary collections.,  reduces the organisation's Carbon Footprint, sees data in real time - 24/7,  has remote diagnostics, helps resize the workforce and identifies cost-effective routes

Supplier Competition / Optimisation 6-8%

  • Competitive bidding
  • Optimise services 

Example:

  • Competitive bidding based on experience, expertise, value-adds and transparency in pricing
  • Engage with suppliers who can provide training and consultation on effective waste minimisation techniques applicable for each stage of production activity

Service Bundling - up to 8%

  • Bundle services 

Example:

  • Expert consulting, waste tracking and reporting along with traditional waste management services
  • Buyers are required to comply with regional waste management and disposal regulations to avoid litigations or heavy penalties. Hence, they prefer engaging with suppliers that have an in-depth understanding of such regulations

Alternatives to Landfill 

  • Recycling & 'Upstream' activities

Example:

  • Waste treatment via composting, anaerobic decomposition, incineration, recycling, recovery, and reuse, can help realise savings. Sustainable practices can help convert waste-to-energy, create sanitary landfills, and reduce the volume and toxicity of the final waste disposed

Waste Services & Circular Economy

Savings Levers

Suppliers / Pricing

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Sources: Procurement IQ Procurement Research - 50806767 Solid Waste Collection & Disposal Services & Expertmarket.com