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Need to Know

WM Wants Consumers to Pay More as It Moves More Trash

Waste Management WM.png

More Americans are home and it ultimately results in more residential waste and a higher cost for haulers.

Devina Rankin from Waste Management talked about charging cities and towns more to pick up their trash and recyclables as a result of this.

“We need to have conversations about the level of service we are required to provide because it is different than what we signed up for,” the Waste Management  Inc. finance chief said. The weight of residential waste has increased 15-25 percent since the beginning of widespread lockdown orders in the U.S., she said.

Meanwhile, Ms. Rankin said volumes in its higher-margin commercial and industrial business were down 16 percent in the first quarter compared with a year earlier.

The Houston-based company has about 18.3 million residential customers across the U.S. and Canada. The drop in commercial and industrial trash reduced Waste Management’s revenue by about $40 million in the first quarter, hurting its profit margin.

Waste Management and other haulers typically have multiyear contracts with municipalities for removal of trash and recyclables. The price paid stays the same, even if more waste is produced.

Waste Management’s trucks now make more trips to pick up residential trash and bring it to a landfill or sorting facility. Disposal costs are rising because of the increased volumes, and Rankin said she expects those higher costs to continue even as businesses and offices reopen.

Source: WSJ CFO Jounal

TAGS: Residential
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