New York’s Department of Sanitation has awarded long-awaited contracts for a zone system that will dramatically overhaul the city’s commercial waste industry. Customer transitions for the first zone will begin in September.
The 60 awarded contracts will encompass service for an estimated 200,000 businesses across 20 nonexclusive zones, plus five citywide agreements for containerized compactor service. Customers will have the option to choose among haulers in their select zones, and the city will not pay for these contracts.
The companies with the greatest number of contracts are:
- Action Carting Environmental Services (a subsidiary of Interstate Waste Services), 14, plus citywide
- Waste Connections, 12, plus citywide
- MRT BWR (a joint venture between Mr. T Carting and Boro-Wide Recycling), 6, plus citywide
- Royal Waste Services, 5
- Cogent Waste Solutions, 4
- Filco Carting, 3, plus citywide
- Recycle Track Systems, 3, plus citywide
Other companies that received contracts include #1 Waste & Recycler, 5 Borough Waste Removal, Basin Haulage, Classic Recycling, Crown Waste, Green Environmental Services, Industrial Carting, Liberty Ashes, Metropolitan Paper Recycling, New York Recycling Solutions and Priority First Carting.
New York’s commercial waste zone system was in part designed to avoid large companies dominating the market, as is common in other cities for commercial waste. According to DSNY, 70% of the awardees or their subcontractors currently hold less than 3% market share each. Fourteen of the 30 awardees hold less than 1% market share. These figures may shift slightly as awardees continue to finalize subcontracting plans.
The system stems from a 2019 law signed by then-Mayor Bill de Blasio, which came after years of advocacy and debate. Implementation was originally supposed to start sooner but was delayed multiple times by the pandemic and other factors. The initial list of responsive bidders totaled 48, including majors names such as WM.
DSNY moved to begin final negotiations with carters last summer, Waste Dive first reported. Price has been a prominent factor in negotiations, given recent inflationary trends. Local haulers currently operate in an open market system under a rate cap set by the city’s Business Integrity Commission, a vestige of the crackdown on organized crime in the ‘90s.
While cities such as Los Angeles have utilized exclusive zone systems, DSNY chose a nonexclusive option in part to manage cost concerns. According to the agency, at least one of three haulers will operate under the current maximum price allowed by BIC. “There are only two zones in which all awardees will be operating at a maximum price above the current BIC rate cap, and the amount over is in the low single digits – 5% in Bronx West and 2% in Upper Manhattan,” the agency stated in the release. The BIC rate cap will not apply to the zone system once it is fully implemented.
DSNY notes that “pricing is a ceiling, not a floor” and said customers may negotiate their prices. Carters must also charge less for recycling and organics collection service, as mandated under the law.
Other aspects of the law include labor and safety requirements, as well as environmental requirements intended to reduce vehicle emissions and miles traveled. According to the agency, “each carter also submitted plans to utilize zero emission vehicles in the provision of their services” in alignment with the priorities of Mayor Eric Adams’ administration.
DSNY plans to begin piloting its first zone, Queens Central, later this year. This includes neighborhoods such as Jackson Heights, Corona and Elmhurst. Waste Connections, MRT BWR and Basin Haulage were awarded contracts in that zone. The agency said this area “was selected because of its wide variety of business types, and this pilot zone will inform the rollout timeline and methodology of subsequent zones.” According to a proposed rule published Tuesday, implementation will begin on Sept. 3 and conclude on Jan. 2, 2025.
Correction: This story has been updated to include zone awards from Manhattan West.