Grab the Wall Street Journal or any other newspaper in front of you. Flip to the Business and Market section and tell us what you see. You will probably read headlines on big name financial institutions, the rise and fall of stock prices, and other overwhelming information that may seem irrelevant to your daily life unless you work in the finance industry.
When you hear “Multi-Billion Dollar Industry” what comes to mind? Many would list the gas industry, automotive industry, entertainment industry, and many others of the variety. What most people do not think to mention is the waste management industry in the United States. Waste management, something that we all deal with on a day-to-day basis, whether it be for our home or our business, is a multi-billion dollar industry. The U.S. Waste industry has an annual revenue of 75 billion dollars, making it a large part of our economy.
Currently in the United States, there are approximately 20,000 companies within the waste industry . Eight of the largest waste management companies account for nearly half of the of industry’s yearly revenue. Below you will find information on the top two largest waste management companies that dominate the market.
According to a study conducted by the Environmental Research and Education Foundation (EREF) in Washington DC, we have been able to shed some light on the once elusive industry. In the nonhazardous waste industry alone, there are three different types of business sectors: publicly traded companies, privately held companies, and public sectors.
Many Americans rely on the employment of waste management companies. The industry employs approximately 367,800 employees, most of them being part of the private sector of the industry. Not only that, but the private sector generates approximately three-fourths of the waste industry’s revenue.
So what do these companies in the waste industry offer? Some of the major services include waste collection, waste treatment and disposal, and remediation.
Waste collection is exactly what it sounds like and it is probably the service that most people are familiar with. Whether it be a scheduled weekly trash pick-up or a one-time service, waste collection is something we deal with on a regular basis. The collection process is the biggest part of the waste industry, accounting for approximately 55% of the industry’s revenue.
Coming in second is waste treatment and disposal, responsible for 20% of the revenue in the industry. Waste treatment and disposal is what is done to the waste after it has been collected. Many countries require a proper treatment method for solid waste to reduce the environmental affects of waste production, including the United States. The most established waste treatment methods include: composting, incineration, landfill, and recycling.
Lastly at 15% of the annual revenue is remediation. Remediation of waste involves cleaning oil spills, contaminates on the ground, removal of asbestos and lead paint, restoration of strip-mined areas, and processing hazardous waste and neutralizing it so that they do not cause harm to the environment. Handling of hazardous waste is a relatively small part of waste management. Most of waste management involves non-hazardous, municipal solid waste (MSW) and the process of collecting, transferring and disposing the said waste.
According to a study done by First Research, the size of our waste management industry is greatly dependent on the amount of waste we produce, as well as the economic condition of the region. The United States has one of the biggest consumer markets, and produces approximately 251 million tons of trash every year. So it is not surprisingly to see how large the waste industry is in the United States. The reason why big companies like Waste Management and Republic are thriving in this market is due to its size. Much of the success of waste management companies is dependent on labor and efficient operations. These large waste management companies have large efficiencies of scale in operations. This is something that the smaller companies cannot provide. Hence the bigger companies are either pushing out or buying out the small ones.
So what does this mean for waste generators like you? Monopolization of a market is never a good thing for consumers. Waste management is a commodity, and when a commodity becomes monopolized by big businesses, it may mean higher costs and subpar services being rendered. One of Grid Waste’s missions is to address this issue. Grid Waste gives waste generators options and greater transparency through reverse-auction bidding. Not only that, Grid Waste’s grouping function allows users to form purchasing groups with neighboring generators to trump monopolization in their neighborhood. By creating purchasing groups, more waste management companies can penetrate a market. The bigger the purchasing group, the more fiscally viable for smaller companies to service these monopolized areas. Creating a competitive market is important for greater transparency, lower prices, and better service.