Dive Brief:
- New York City is taking the next step toward implementing commercial waste zones by asking certain bidders to begin negotiations for 10-year contracts (with potential extensions) ahead of an initial rollout. The long-awaited program could start phasing in next year.
- Multiple haulers received letters from the city’s Department of Sanitation on Monday inviting them “to contract negotiations for the RFP awards,” expected to start in July, according to sources. Other haulers received letters stating they were not invited to contract negotiations at this time.
- “Commissioner Tisch committed to an aggressive timeline for the implementation of Commercial Waste Zones, and we are moving forward with this major undertaking, which will create a cleaner, safer, more sustainable commercial waste collection system,” said DSNY Press Secretary Vincent Gragnani in a statement. The agency declined to share how many letters it sent in each category, citing the open procurement process.
Dive Insight:
The largest commercial waste market in the country is heading toward its most significant change in decades, after implementation was delayed multiple times due to the pandemic and other factors. This latest step is a key milestone following months of speculation about next steps.
While DSNY handles all residential collection, the city’s commercial waste collection service is handled by private haulers through an open market system that requires operating licenses. Following the passage of a 2019 law, and many prior years of discussion, the city is set to reshape that arrangement by awarding zone-specific collection contracts.
Supporters hope this can lead to higher recycling rates, lower vehicle emissions, more transparent customer service and various other benefits.
While similar systems have been launched in cities such as Los Angeles, the one envisioned in New York will be unique given its scale and design. The city would be divided into 20 non-exclusive zones with up to three haulers per zone, whereas Los Angeles has exclusive zones. Five citywide contracts for containerized waste collection are also planned. No hauler can win more than 15 zone contracts and one citywide contract.
DSNY received submissions from approximately 50 qualified bidders for the first part of its RFP in 2021, before asking for a more detailed submission that was due last summer. That initial list included national companies WM and Waste Connections, regional companies Interstate Waste Services (via a subsidiary) and Winters Bros. Waste Systems, plus many other notable locally-based companies.
The agency has previously declined to share how many submissions it received in the second round of the RFP, or which type of contract each company bid on. The agency later requested best-and-final offers that were due in November.
Sources estimate the final number of bids may have been closer to 30, or less, which is considered similar to the number of sizable haulers still operating in the city. This week’s update narrowed that list further, though not definitively.
"It's similar to being waitlisted for getting into college. The city is not saying no, the city is saying not at this time,” said David Biderman, president of Biderman Consulting, who has spoken with multiple haulers that received letters. "The letters are a clear signal from the Department of Sanitation that they intend to continue moving forward with [commercial waste zone] implementation.”
The agency had previously faced questions from some elected officials and advocacy groups over why the process hadn’t advanced, including a February city council committee hearing on the topic. At that hearing, DSNY Commissioner Jessica Tisch said “the complexity of the RFP and the amount of care and attention required to complete this process” made a previous implementation timeline “unrealistic,” and an evaluation committee was still reviewing proposals.
During a May council hearing, Tisch reiterated plans to pilot the first zone during the second half of 2024 before doing a citywide rollout. No further details have been released on the pilot location.
Area haulers have been in a state of limbo for years as they await their fates. While acquisitions have been rampant around the country, the local deal market is essentially frozen. In the meantime, some companies have sought to grow their presence in adjacent markets, such as New Jersey, or looked for ways to be additionally competitive in the process by proposing joint ventures or new facilities.
Council Member Sandy Nurse, who chairs the body’s sanitation committee and previously founded a composting company, said she welcomed this latest development in the process.
“I believe this reform is really going to transform the trash landscape in New York City and so every step forward we make on implementing it is great news,” said Nurse. “I think the sooner we can help those carters know about their future and where they will be operating the better they will be equipped to do long-term planning for the investments that they have made.”
