Why Use a Managed Service Provider Versus a Waste Broker

16 January 2019 | Posted by Cass Waste Marketing

Not all third-party vendors are created equal.

Many multi-site businesses will contract with a waste broker – a company that acts as a middleman between the company and waste haulers.

Sounds like a great idea – one contract, reduced costs, no hassles.

Yet this simplicity doesn’t come without risks or hidden costs. When you are disintermediated from your haulers, you have no insights into your waste program, and worse, missed payments can mean missed pickups. That’s troubling for your customers or tenants, a black mark on your brand.  

In 2018, waste got a lot more complicated. Cass predicts that waste costs will rise 47% in the next 5 years and already Cass is seeing dramatic spikes in rates at contract renewal. This means that what you have been doing in the past decade may not be the best approach in the coming years.

When you decide to outsource your waste expenses you have 2 choices:

  • Brokers
  • Managed Service Provider (BPO)

Waste Brokers: If you use a waste broker, you don’t have to procure services on your own. Nor will you need to enter into multiple contracts with multiple suppliers. However, this gives you less control over your haulers, less visibility, and fewer data points from which to evaluate your program. You take some risk in relying on one single entity–an unaudited, non-financial institution–to make payments directly to your haulers across all of your locations and properties. In addition, there may be hidden revenue streams to the broker such as backend incentive dollars that go directly from the hauler to the broker that you’ll never see. In today’s environment of rising waste costs, you may end up with the lowest cost, along with the lowest service, haulers because you don’t have control over that selection.  This approach might result in some quick savings but may not be best for your company and offers no visibility or controls. In addition, and as a result of rising costs, simple math tells you that waste brokers can’t lower your cost at the end of every term in perpetuity. If they could do that, then the haulers would eventually end up paying you to remove your waste.

Therefore, once you’ve received full benefits from a procurement event, what’s next? Well, as a strategic business manager focused on process, efficiency, and sustainability, you need a time-tested, closed-loop system that ensures your program is under tight control. 

Waste Managed Service Providers: Admittedly there are a lot fewer options to pick from in waste managed service providers who specialize in being a dedicated, transparent outsourced waste management department.  However, seeking out an experienced provider will reap stronger long-term benefits for your company. Look for a managed service provider with deep waste experience, good hauler relationships, best practices know-how, a proven technology platform, and fiduciary backing. What you will receive is transparency at all times: monthly detailed processing and auditing of invoices, checking for invoice errors and optimizing your environment, recovering errors and putting that money back into your pocket, and then making secure, on-time monthly payments backed by a financial institution. Managed service providers of this type have YOUR best interest at heart, providing transparency and feedback that results in improved processes, better hauler relationships, and efficiency that helps control costs for the long term. This results in a better overall approach to waste and recycling that adds to your sustainability goals and protects your brand. 

Ready to experience the difference? Let Cass Waste Expense Management experts take the hassle out of your waste while providing complete transparency and a better relationship with your haulers.  

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