ABSTRACT

Household waste generation and its haulage have historically been viewed as recession-resilient activities. However recent studies indicate that households put out less waste for collection during an economic downturn, driven by the economics of recycling and reusing a portion of the waste which previously would have been set out for disposal, as well as encouragement from green initiatives actively promoted by community groups and governmental entities. "Zero-waste" (no waste sent to landfills) is a target set by many local governments. While this target is still quite some distance away, both waste haulers and refuse truck manufacturers are changing to accommodate this trend.

Local governments and private waste haulers comprise refuse trucks’ customer base. Curtailment of the buying power of these customers during the recent recessionary period negatively impacted demand for new vehicle purchases. Local governments and municipalities have been hampered by shrinking budgets owing to lower tax revenues, while private waste haulers have cut back on capital expenditures in the face of rising costs, increasing price pressures and difficulty in obtaining financing.

Housing construction is a direct demand driver for waste hauling services. As new housing construction declined significantly in recent years, due to the recession and foreclosure crisis, there was very little demand for new refuse pick-up routes. Now, however, construction is slowly resuming in many areas of the U.S. Additionally, older vehicles that had been on a deferred replacement schedule are now needing to be replaced. Therefore demand is expected to increase slowly through 2012, followed by healthier growth in 2013 and beyond.

The structure of the industry is undergoing a gradual change. While rear loaders continue to be by far the most common type of vehicle in use, automated side loaders are growing in popularity due to their greater efficiency and improved driver safety and working conditions.

Recent years have seen increasing orders for natural gas and other alternative fuel-powered vehicles, despite limitations that include the higher initial cost of these trucks and establishment of a refueling infrastructure. A growing number of manufacturers now offer factory installation of CNG equipment, negating the need to ship a vehicle to a third-party contractor for modification.

These and other issues are the subject of this succinct report from SpecialtyTransportation.net ("STN"). The report can be put to immediate use for sales and market planning, M&A identification, competitive share analysis, alliances and technology transfer considerations.