Waste Management
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Industry Overview
The private waste management industry in the US includes about 15,000 companies with combined annual revenue of approximately $80 billion. Major waste management companies, which also are the nation's largest recycling firms, include Waste Management, Republic Services, and Waste Connections. The industry is highly concentrated: the eight largest firms account for nearly half of the industry's total annual revenue.
Industries related to waste management are covered in the Environmental Consulting, Scrap Metals-Recycling, and Water & Sewer Utilities profiles.
Competitive Landscape
Demand depends on the volume of waste generated, which depends on economic conditions and consumer spending. The profitability of individual companies depends on labor and efficient operations, because the service is a commodity sold based on price. Big companies have large efficiencies of scale in operations. Small companies can compete successfully by offering specialized services or serving local markets. Average annual revenue per worker for a typical company is about $220,000.
Products, Operations & Technology
Major services include waste collection, treatment, and disposal; remediation; and recycling. Waste collection accounts for about 55 percent of industry revenue; treatment and disposal, 20 percent; and remediation, 15 percent. (Remediation involves the cleaning of crude oil spills and ground contamination, removal of asbestos and lead paint, and restoration of strip-mined areas.) Small companies usually operate in only one of these segments. Larger companies often have vertically integrated operations that include all of these components.
Waste management involves primarily the collection, transfer, and disposal in landfills of non-hazardous, municipal solid waste (MSW) or trash, which consists of everyday items like product packaging, grass clippings, furniture, clothing, bottles, food scraps, newspapers, appliances, and batteries. Companies may also handle and treat hazardous, low-level radioactive and liquid wastes. The business is conceptually simple: trash is collected from businesses, industrial sites, and residences, and is buried. Between 55 and 65 percent of solid waste is residential (including multi-family dwellings) and between 35 and 45 percent is commercial (including waste from schools, institutions, and businesses). Local and regional factors, such as climate and level of commercial activity, contribute to these variations.
Growing public awareness of possible environmental dangers of this simple approach has complicated the business, making it more technologically demanding. US homes, businesses, and institutions produce more than 250 million tons of solid waste per year, approximately 4.6 pounds of waste per person per day. Some 33 percent of waste is recycled or composted, nearly 13 percent is incinerated, and the remaining 54 percent is disposed of, mostly in landfills.
Trash is usually collected from commercial sites using either small (1 to 8 cubic yards) steel containers (dumpsters) that are mechanically emptied into collection trucks, or large (20 to 40 cubic yards) "roll-off" containers that are loaded onto a special truck and hauled away. Residential collection is mainly done with back-end loading trucks.
Recycling and material recovery are a major part of waste management. Recycling is collection and disposal of commodity items like paper, cardboard, newspaper, glass, plastic, and metal cans that have been sorted out of the waste stream. Materials recovery involves separating recyclable items from collected waste, usually by manually picking through a waste stream on a conveyor belt. Recycling collection is frequently part of commercial and residential waste collection, but may be charged for separately. Nearly 9,000 curbside recyclables collection programs currently exist in the US. Recyclables are sold to purchasers at prices that can fluctuate wildly, depending on demand. Waste management companies usually insulate themselves from price fluctuations by passing profits or losses from sales to the original customer.
Because landfills are now often located at a significant distance from many cities, companies operate transfer stations, where waste is received from various trash collectors, compacted, and hauled to landfills in special trailers. Operators charge fees based on the type and volume of trash received and the distance to the landfill. Recycling and materials' recovery operations are often located alongside transfer stations.
Modern landfills are technologically very different from the town dumps that used to exist in every city. Landfills usually have a clay liner on the bottom and sides to prevent waste from leaching into the local water table. Wastes are spread, compacted, and covered with earth daily. Monitoring devices detect leakage, and piping systems vent the methane gas created by organic decomposition. Full landfills are capped and may eventually be used for other purposes such as parks. For hazardous material landfills, the design, operation, and post-closure requirements are more stringent. Landfill operators usually own the landfill, but sometimes operate them for a municipal owner for a fee. The eventual closure costs of a non-hazardous landfill involve monitoring and possible repair for up to 30 years, while monitoring responsibilities for hazardous and radioactive sites last much longer. Approximately 1,800 municipal solid waste landfills exist in the US, mostly in the South (nearly 700) and West (more than 500), primarily due to the regions' population growth.
Handling and disposing of hazardous (usually liquid chemicals); low-level radioactive (high-level radioactive wastes are handled by the federal government); and other liquid wastes are technologically complex and expensive, often involving chemical treatment to separate the toxic components. In some cases, treated hazardous wastes are injected into deep wells that are geologically isolated from the water table. The growing need for remediation services is allowing small companies with sophisticated technology to enter the field. While much of the work is technologically driven, it also usually involves disposal of materials in a hazardous material landfill.
