Over the past few years, we have all experienced considerable fuel market instability. Most companies, especially those in the transportation industry, now charge a separate fee that adjusts with fluctuations in the fuel markets.
As a waste hauler, one of our largest costs is diesel fuel. Rather than continually modifying your monthly service rates, we have elected to use a fluctuating fuel fee based on the fuel prices we pay. It is our intention to do our best to stabilize your service rates. For this reason, we are willing to set up contracted rates that only adjust on an annual basis or when there are large fluctuations in some of our major costs (e.g., landfill, fuel). By having the separate fuel fee, we are able to continue to provide contract service rates and still adjust only for changes to fuel markets that continue to fluctuate throughout the year.
Over the past few years, area landfills have begun to assess fees relating to local recycling efforts and environmental impacts of waste disposal. These small fees are now passed on since they are directly related to the volume and type of waste generated by our customers. These fees are added to every load of waste hauled to a Colorado landfill, based on cubic yardage or tonnage of the waste. Currently, there is no part of this fee associated with recyclable materials taken to area recycle centers. So the more you recycle, the less you pay.
What is this Material Recovery Fee I see on my bill?
Since the middle part of 2015, the world has seen a major shift in the value of normal recyclable materials. Since then, recyclable commodities values have plummeted to the point that in our local market that we have had a shift of more than $60/ton and now must pay nearly as much to dump recyclables at the area Material Recovery Facility. In many parts of the community, largely including all in city Fort Collins rates for trash collection have INCLUDED the cost of both Trash and Recycling service in one rate. In addition to the service bundling, city code requires that rate levels increase 100% at each subscription service level. Unlike Landfill rates for your garbage that increase a maximum of annually, recycling market rates fluctuate every month. Rather than increase and decrease your rates every month, we have elected to add a small fee that is solely reflective of market fluctuations. It is our intent that this particular fee will drop off when prices for materials are back to zero.
Why so much change in recyclable commodity prices? Much of this is due to a decrease in demand from China, who was buying up most of these materials, our long distances from shipping ports, and few remanufacturing plants for recyclable materials in close proximity to our area, or for that matter, most of the USA.
It is important to understand that at no time has recycling ever truly been free in our market. It has always been largely subsidized by trash rates or other services. This includes when there was a small rebate. To give you some perspective we collect between 3 and 6 tons per day per recycle route. When we were receiving a small rebate this amounted to approximately $60-120 for an entire day/route in rebates, which would not even cover the labor cost of route personnel, let alone fuel and other vehicle costs. In addition, there is unique contract in place between Larimer County and the operator of the transfer station (recycle center), Waste Management, that gives WM complete control of the pricing they may charge local haulers to dump recyclable materials. Currently, this rate is more than 3 times the rates charged at similar facilities in Boulder and Denver operated by other private companies. Unfortunately, the costs of sending our trucks to these other facilities would nullify any savings at this time, but GSI is seeking other options continually to work to keep rate increases to a minimum.