How Trash Makes Money In The U.S.
1,326,475
Published 2021-07-22
A rising industry
America has long remained one of the most wasteful countries in the world, generating 239 million metric tons of garbage every year, about 1,600 to 1,700 pounds per person. While some view it as a threat to our environment and society, the solid waste management industry sees an opportunity.
“It’s a profitable industry,” according to Debra Reinhart, a member of the Board of Scientific Counselors for the EPA. “It’s a difficult industry but it is profitable if it’s done right.”
Two private companies, Waste Management and Republic Services, lead the solid waste management sector. Together they own about 480 landfills out of the 2,627 landfills across the United States. The two companies have seen staggering performance in the market, with the stock prices of both doubling in the past five years. Both Waste Management and Republic Services declined CNBC’s request for an interview.
“They’ve learned how to be best-in-class businesses,” said Michael E. Hoffman, a managing director at Stifel Financial. “Their publicly traded stocks outperformed the market handily between 2015 and 2019 and underpinning it is a meaningful improvement in their free cash flow conversion.” The stocks have continued to outperform.
Tipping fees
Since its inception, landfills have made a majority of their revenue via tipping fees. These fees are charged to trucks that are dropping off their garbage based on their weight per ton.
In 2020, municipal solid waste landfills had an average tipping fee of $53.72 per ton. That translates to roughly $1.4 million a year in approximate average gross revenue for small landfills and $43.5 million a year for large landfills just from gate fees.
Tipping fees have seen steady growth over the past four decades. In 1982, the national average tipping fee sat at $8.07 per ton or about $23.00 when adjusted for inflation. That’s nearly a 133% increase in 35 years.
While tipping fees make landfills sound like a risk-free business, they are still quite an expensive investment. It can cost about $1.1 million to $1.7 million just to construct, operate and close a landfill. For this reason, private companies have replaced municipal governments to own and operate the majority of the landfills across the U.S.
“I think it’s because the trend has been to go larger and larger so the small neighborhood dump can’t exist because of the regulations and the sophistication of the design,” Reinhart said. “So we are tending to see large landfills, which do require a lot of investment upfront.”
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How Landfills Make (A Lot Of) Money In The U.S.
All Comments (21)
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There is WAAAYYY too much plastic packaging for every product we buy
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I remember meeting an older man at a bar a decade ago, who runs a clothing recycle business. He recycles plastic and old clothes then use the material to make new clothes. I was so grossed out by the idea back then, and told him that I couldn’t wear a clothes that’s made from trash… now I feel regretful of my stupidity and ignorance. I admire him for seeing the potential in such business since decade ago. And I would absolutely buy clothes that are made from recycled materials, as long as it’s comfortable. It’s a great solution for everyone, the planet and species live on it.
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I consulted for a large landfill in Ohio. The landfill ran 365 days a year with over 1000 trucks a day bringing nearly 500 dollars a truck. There is enough capacity to operate for another 113 years with current waste generation. They were developing a gas field to gather and sell renewable natural gas to be used by their own trucks and excess sold to a local operator. They also left that the liner has a clay layer under the plastic liner. The geosynthetics are the exposed layers but there are additional protections.
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I work as a QA consultant when cells at Waste Management sites are being constructed and I have to say for a job dealing with literal trash it is so much more interesting than it sounds. As someone who majored in environmental studies I was impressed with just how much though and engineering goes into building these giant trash cans.
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One man’s trash is literally another man’s treasure.
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The Sopranos taught me this.
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You know what they say...”one man’s trash is an oligopoly’s treasure.”
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I remember back then people say that collecting trash is a job for poor people but they are wrong.
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we’re heading to WALL-E yall
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You smell the trash and I smell the... money!!! Dude!! Cash!!! My brain died at bit.. This was the perfect moment, glory would have been endless for this men!
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Am I the only absolutely obsessed with the cycle of life, and how our garbage fits in that cycle? I keep telling my wife, my absolute dream job would be at a land fill.
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Think of all of the materials that go into landfills. So much is going in that could be reused or recycled. It is said the use of plastic shipping bags, like what Amazon frequently uses, could be greener than the cardboard boxes, but only if the bags would get recycled. Look at all of the construction and yard waste that goes in. Don't forget the food waste. Food and yard waste can be composted. Some construction waste, depending on condition, can be reused, e.g. cabinets, plumbing and electrical fixtures, hardware, etc. I once saw a This Old House project begin with a Deconstruction contractor. Take the money spent on the contractor, subtract the money made on selling the materials, and the expenses are a wash compared to simply tearing everything out and sending to the dump.
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Wow this is a topic I never knew could be so interesting
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In Fort Worth metropolitan and suberb's, Waste Management delivers "recyclables" garbage to a private company established here who copied Europe's methods of sorting out different items on convaerbelt (aluminum cans; paper; cardboard...etc) and makes about $7,000 per-month profit selling each idem in bales to manufacturer's all across the nation...who comes to pick up
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It will most certainly be profitable to mine dumps in the near-future.
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As I like to tell my young daughter: one’s value as a human being directly correlates to the volume of one’s waste output…
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"I'm in a waste management business!" - Tony Soprano
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Great info. I learned a lot. Thanks.
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Thank you for sha-ring your thoug-htful content…for putting it out there with the passion that many of us need and strive for. I'm starting to listen to you almost every morn-ing. Your voice and words are calming, clarifying, uplifting and motivating. It feels real and genuine. I am grateful to have your channel as a source for having a better relationship with myself and the world around me?
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I make a living trash picking items left for the garbage man. I film my journeys diverting scraps destined for the landfill
