Dive Brief:

• New York’s Business Integrity Commission has approved a 7% increase to maximum prices that licensed commercial haulers can charge for waste and recycling collection in the city due to “historic levels” of inflation. This is the second such increase in 2022.
• As of Oct. 31, licensed haulers can charge up to $24.21 per cubic yard and $15.89 per 100 pounds. This is an increase from $22.63 and $14.85, respectively, which took effect in June. That prior 9% increase marked the first rate cap adjustment since 2018.
• The Solid Waste Association of North America, which advocated for the change, said it’s “very pleased” with the increase. The National Waste & Recycling Association similarly advocated for this move, citing rising levels in the national producer price index in a July letter that said the “waste and recycling industry is not immune to this, as we have seen with skyrocketing costs in labor, fuel and materials.”

Dive Insight:

New York’s rate cap, which dates back to a 1990s crackdown on organized crime in the local industry, has long been a focal point for operators in the city and is something that NWRA believes should be phased out. Local haulers will transition to a different pricing structure under an upcoming commercial waste zone plan, but in the meantime their financial viability is closely linked to the rate cap system.

BIC is required to hold a hearing on possible rate cap adjustments every other year, but otherwise it has no requirements to make rate adjustments and is not limited in how often it can do so. This marks the first time the agency has ever approved two increases so close together.

"There has never been multiple rate increases in a year in the history of the Business Integrity Commission,” said SWANA CEO David Biderman. "It helps carters adjust rates as appropriate to deal with the persistent inflationary environment that they're dealing with in New York City — with disposal prices, labor and fuel being the three key components."

BIC outlined similar factors in a rulemaking notice, including the fact that the producer price index for solid waste collection had “risen significantly” since 2018, and that was “not fully captured by the June 2022 adjustment.”

“Increased operating costs due to labor shortages and equipment costs, as well as new regulatory requirements, make it difficult for trade waste haulers to operate at current rates,” said BIC.

Haulers around the country have been making big price increases this year. The federal price index’s solid waste collection category showed a 9.7% increase between September 2021 and September 2022. An April letter from Lew Dubuque, NWRA’s Northeast vice president, noted the producer price index for waste collection had risen by 20% since 2017.

Pricing has also been a key factor in the bidding process for 10-year contracts for select haulers to service 20 commercial waste zones in the city. Earlier this year, the city’s Department of Sanitation — which is running the process — adjusted its bid criteria to place more emphasis on pricing. Final bids were submitted in July, and the agency sent a letter to companies that submitted bids last month asking for best and final offers. The letter said higher scores would be given to proposers “that offer the most competitive rates to their customers by having the lowest maximum prices.”

Industry participants expect pricing could go up under the new system given the increased level of service requirements. The zone system could begin rolling out as soon as next year. BIC said any information submitted in that parallel process did not play a role in its decision. 

“BIC and DSNY are in frequent contact regarding the ongoing CWZ implementation process to ensure a smooth transition, however the decision regarding the rate cap adjustment was made independently of the ongoing CWZ RFP process,” said Nicole Mathias, BIC’s director of policy, in a statement.