Access Granted

Paul Kilduff

For independent haulers, competing with larger, publicly traded firms for the accounts of national chain stores always has been a concern. Retailers such as Target and Home Depot may strive to offer their customers a high level of shopping convenience, but for moderate-sized waste companies, they can be inaccessible when it comes to contracts.

However, smaller waste firms can get a chance to service the nearby outlet of a national retailer by working with companies that function in part as middlemen between chain stores and haulers. East Hartford, Conn.-based Oakleaf Waste Management and The William-Thomas Group, a division of Cincinnati-based Rumpke Consolidated Cos., are two such companies.

Neither company refers to itself as a broker, in part because the scope of their services, which includes advising clients on how to make their waste streams more efficient, is broader than simply connecting generator and collector. Yet, an additional motivation could be that some haulers have negative connotations associated with the word “broker” because of problems receiving payments and requests to bid on contracts for sites that already have a collection contract.

Founded in 1995, Oakleaf works with 4,600 haulers in North America to provide collection and recycling services for 85,000 retail, industrial, apartment and healthcare sites. Clients include Arby's, K-Mart and Albertson's. The company expects to bring in $300 million in revenue this year.

Oakleaf refers to itself as a waste outsourcing firm. It does not own any trucks or landfills. Waste generators, such as chain stores, hire Oakleaf to, among other things, conduct evaluations of their waste streams, customize a disposal and recycling program, and contract with haulers to service their individual properties.

For instance, when conducting an audit of a generator's cash flow, Oakleaf may break down a retail chain's various stores into large, medium and small trash-producing sites. If Oakleaf determines that one small-trash producing site has a 10-yard dumpster and all of the other small-producing sites are using a 6-yard bin, the firm will instruct the generator to replace the 10-yarder with the 6-yarder.

The firm also rents cardboard balers to retailers and services the equipment, and provides its generators a 24/7 customer service hotline. Overall, Oakleaf guarantees its clients a savings of at least 5 percent compared to what they were previously paying for trash and recycling services.

For haulers, Oakleaf offers access to national accounts. “These aren't the guys the local haulers have a great relationship with,” says Jim Barnes, founder, president and CEO of the firm.

In order to become part of Oakleaf's Certified Hauling Program and service one of the firm's clients, a hauler must undergo an evaluation in which Oakleaf officials visit and inspect the hauler's facility. If accepted, the hauler can start bidding on contracts, but is only given small routes at first.

“We don't just on day one give them 500 locations,” Barnes says. “We give them a few and then measure how they do through a scorecard system.” The scorecard includes assessments of how long it takes to do a dump and return and complaints per 100 pickups.

Furthermore, a hauler that makes the lowest bid on a contract may not necessarily be the one that Oakleaf chooses, Barnes says. “The lowest price is not the absolute driver — it's consistent, good quality service,” he says. “Let's say that I have a hauler that does 300 to 400 locations and another guy who can do three to four of those locations cheaper. I'm not just going to switch over to them.”

As for billing, “we send them [haulers] one wire transfer a month for their locations — some have up to 500 a month,” Barnes says. “Invoices are eliminated. It's consistent cash flow.”

Some of the waste industry's giants, such as Houston-based Waste Management and Scottsdale, Ariz.-based Allied Waste Services, no longer service accounts handled by Oakleaf, saying they grew tired of losing accounts to the firm and then being “re-hired” by Oakleaf to handle the accounts at a discount.

Three years ago, Rumpke formed its William-Thomas Group to give independent haulers a better chance at providing collection and recycling services to national companies. As firms do with Oakleaf, companies such as Kroger and Circle K contract with William-Thomas to handle waste services for multiple sites across the country, and the group lines up service providers for each site.

William-Thomas's Haul Pass Network consists of nearly 5,000 haulers that are eligible to service sites. Currently, about 1,100 of the firms are handling about 11,000 different locations.

To participate in the network, haulers have to, among other things, provide customer references. “If they check out on their references, we'll allow them to participate,” says Brad Warman, who set up the William-Thomas Group and continues to manage it.

For William-Thomas, being the low bidder isn't as important as a hauler's ability. “They have to have proved they have the capacity to service the account,” Warman says. “How many trucks do you have? Are you in that area?”

In addition to lining up haulers, William-Thomas advises its clients on their waste streams. The group encourages stores to demand that vendors ship products in less packaging — for instance, in recyclable shrink wrap instead of a cardboard box.

As does Oakleaf, William-Thomas also arranges for the sale of profitable recyclable materials like cardboard. According to Warman, one grocery chain he works with offsets 90 percent of its waste disposal costs through the sale of recycled cardboard at current market rates.

Ken Deininger, vice president of sales for Cleveland-based Metro Disposal — a company with the slogan “We are big enough to serve you and small enough to know you” — says he was initially skeptical about working with Oakleaf. He indicates he was more willing to work with William-Thomas at first since the group is owned by a hauling firm.

Over time, he realized that if national accounts in his service area of Cleveland, Canton and Akron, Ohio, were going to be managed by a third party, he had “to play in that field” in order to grow his business. “The more people they control, the less opportunities I have for sales locally.” He currently works with both Oakleaf and William Thomas.

“They need strong companies in the areas where they operate,” Deininger says. “There's a two-way relationship, and it works. We have a mutual understanding.”

Deininger, who estimates that 2 percent of Metro Disposal's total revenue comes from Oakleaf and William-Thomas, says he took “baby steps” into the world of bidding on national retail accounts. “They'll send you a list of 100 stores in your area,” he says. “It's attractive, but you've got to be cautious. You can't put yourself out of business low bidding the accounts.”

“If I sense it's not competitive, sometimes I have to pass,” Deininger adds. “If I sense it benefits us, I'll be more aggressive. It's Sales 101.”

Chris Cote, sales manager for Werlor Waste Control in Defiance, Ohio, also works with both Oakleaf and William-Thomas. When dealing with the two companies, he's adamant about his company's price.

“If I give you a price, I'm giving you my best price,” Cote says. “We're not going to have a good relationship if you call me back and say, ‘I need [a lower] price.’ What I like about William-Thomas and Oakleaf is they both accept my price.”

Another plus in working with both companies, according to Cote, is that they don't haggle with his company over fuel surcharges and other expenses such as taxes and environmental fees. “I've had some brokers in the past say, ‘Here's Allied or Waste Management's price, and you're $12 more,’” he says. “They will try to make me drop $10 a unit, but they're not taking into account the 16 percent in surcharges they [Allied and Waste Management] are charging on top of their price. William-Thomas and Oakleaf don't do that.”

According to Cote, William-Thomas and Oakleaf also are responsive to his cash flow needs. “I've never had to stop service on William-Thomas or Oakleaf because they haven't paid a bill,” he says. “We've cancelled some brokers because we've had to wait for a FedEx check every month.”

Paul Kilduff is a San Francisco-based contributing writer.