Why Are Skip Bin Hire Prices On The Rise

One of the hot topics in waste disposal at the moment is - why are skip bins so expensive in Melbourne right now?

We are coming into unprecedented times where we have seen price hikes on skip bins several times this year already. Normally we would set new prices in July, at the end of the financial year, in line with the government regulations. The EPA levy and waste levy  is imposed by the Victorian Govenment and consequently by landfills such as Cleanaway, Bingo and others. Consequently, this has a roll on effect and we need to adjust our prices accordingly.

This financial year was no different and in July, the waste levy was passed. The levy was a huge cost to businesses to begin with, however business are now feeling the pinch more than ever due to the changing environment due to Covid lockdowns. During lockdown in 2020-2021, the government paused imposing the waste levy as they did not want to apply more pressure on people due to business uncertainity.

So in July 2021, the EPA Levy went up almost 40% to compensate for previosuly not raising the levy.

There were also various other factors which affected the big suppliers, such as Cleanaway which operates Australia wide, to raise their prices. Climate issues such as the floods in NSW and storms in QLD impacted Cleanaway's operations. The damages and delays significantly impacted the operational costs of Cleanaway.

As we seperate the waste in our recycling yard, we then have to dispose of waste which can no longer be seperated and take it to Cleanaway.

Therefore, when Cleanaway raises their prices, it inadvertently raises our waste disposal costs.

Impact of Fuel Cost on Skip Bin Prices

The second major factor into the increase of skip bin prices in Melbourne is the rise in fuel costs. As all motorists throughout Australia have noticed, we have seen an incredible sharp hike in fuel prices since January/February of this year. Our trucks use diesel to transport skip bins and dispose of waste. Our machinery in the yard, such as our excavators, also use diesel. Traditionally, as most of you would be aware, the cost of diesel has been significantly lower than petrol. The unprecedented phenomenon we have noticed in 2022, is that diesel costs have climbed to such heights that on many days diesel costs are now higher than petrol costs.

That has completely changed the game in the transport industry in Australia.

Fuel costs have impacted many industries such as Cleanaway and they have had to factor in these fuel price hikes into their costs. Hence, we are not only imapcted by the rise in Cleanaway rates but by fuel costs.

Fuel costs are a massive contributing factor into a price for a skip bin. Firstly, the skip bin needs to be delivered to the customer, then it needs to be picked up and then the excavators in the recycling yard use diesel to operate and seperate all the waste. Finally, we use the trucks to transport the seperated waste into various recycling facilities, such as green, timber, plastic, bricks, metal, cardboard, concrete, general and soil waste.

All the various waste types are then distributed to different facilities all around Melbourne for further processing and recycling. So as you can see, transport is a major component in our industry and has consequently made an impact on the prices of our skip bins.

One might ask, why did the fuel prices significantly go up? There are two major contributing factors as to why we have seen these price hikes. From world economic analysis we have gathered that once the world started to recover from Covid lockdowns, there is more demand of production and that more production and not enough supply has pushed the prices of diesel up.

The Impact of War In Ukraine on Fuel Prices and Skip Bin Prices

Another second and very significant factor that impacted our diesel prices is the war in Ukraine. Previously, Russia has been a massive supplier of energy to the world. The uncertainty of what is happening in that part of the world, particularly of how long the war will go on, raises the question of what will happen to the energy supplies which affects the whole global economic world. All of this uncertainity has pushed diesel prices up.

At the moment, since there is no indication of when the war in Ukaraine will be over, we see no sign of fuel prices going down. In fact, from some of the articles in the news we are sensing that we haven't seen the worse of it yet. So fuel prices are set to increase even further.

As you can imagine, this is very concerning as it affects not only our hip pocket but it also affects the pockets of us, the consumers, in Australia. So whilst we may need diesel for our trucks, consumers need fuel for their own transportation needs such as dropping children at school, going to work, road trips and for day to day errands. Obviously these sky high prices are of concern as it leaves us with less for other consumbales.

Unfortunately, the price of transport has not only pushed up the price of skip bins but it has escalated the price of everything because all the items that you buy in the supermarkets are impacted by transport costs.

We have receieved countless emails not only from Cleanaway but also from our timber, green and metal recycling yard suppliers regarding their increased prices. Interestingly amongst one of the reasons for their increase in prices is not only due to fuel price hikes but due to changes in labour.

Consequences of Lockdowns on Labour Shortage

Traditionally in the waste industry, the labour cost was fairly stable (pre-covid time) when travel was more accessible. We were able to hire many workers as there was no shortgae of backpackers and different people coming in and out of our country that wanted to work in the waste industry on a casual basis whilst exploring our beautiful country.

However, with covid restrictions and the end of international travel until now, there was a severe labour shortage...particularly because not many people love sorting through waste.

The waste industry is a very tough industry, for example in the recycling yard, our team works outside in the fresh air but they also work under any weather conditions as bins are being delivered and picked up all year round - rain, hail or shine!

Therefore, not many people can sustain working in the open air under any weather elements. Not everyone can withstand being in all the elements and we found that not lony did the labour shortages impact our business, but all industries.

Let's also not forget the impact of covid on labour shortages as people have to still isolate and do covid tests before returning back to work. If you are working in Melbourne, particularly at the airport, you would have noticed unprecedented ques and cancellation of flights due to lack of employees.

When Cleanaway experiences shortages, employees have to stay back and they have to pay staff overtime, that increases labour costs which is then passed onto us as a recycling company and consequently we pass on the increased rates to our customers - our builders, landscapers, trades and residential consumers.

As you can see, when people ask us, why are skip bins so expensive, there are many different components and competing factors to consider.

Skip Bin Prices

Our customer service team is more than happy to discuss any questions that you may have regarding prices or you can check out the EPA website, which covers extensively what land costs are involved in waste disposal. When you deal with a licenced operator such as us, Need a Skip Now, you will notice we not only have our own recycling waste facility but we dispose of rubbish properly as the law prescribes.

According to the EPA website, if you find a supplier that is extremely cheap then chances are that they are not disposing of waste correctly. A few questions to always ask are: Where is my rubbish going? What happens to the bin once it has been picked up from the site? EPA's new ruling on the consumer (if you are a trade or residential customer) means that the responsibility is on you to ensure that the waste is disposed of in a correct and legal way.

On a positive note, our building industry is still booming and we hope in the future, fuel prices will stabalize and labour shortages will be a thing of the past.

We are here to help you and find more ways to recycle and save you money where we can. We try and recover as many items as possible so that we can take them to different facilities and not just Cleanaway. This process not only saves money but also gives the product more "life". This circular economy gives items such as bricks more longevity as they can be crushed and turned into rubble, which then in turn can be used in roads.

We are working very hard to innovate and improve our recycling processes and pass on any savings to our customers so that we can continue supporting our builders, landscapers and residential customers. So rest assured, that even though prices have increased in all industries, we are working very hard behind the scenes to bring you the best value for money.

Check out our recent blog post on comparing ordering skip bins directly vs price comparison websites.

If you have any questions or would like to discuss a quote for your next skip bin, please check out our website or call our office on 1300 605 624 and we will be more than happy to assist you with your query.