Peterbilt plays key role in remarkable growth curve at Waste Connections
Anyone looking for a template on growth management might want to do a deep dive into the success of Waste Connections.
The publicly traded Houston-headquartered company expects to post $5 billion in 2018 revenue, roughly twice what it did just two years earlier. That’s about 10 times the revenue the company achieved some 15 years earlier.
Too fast, too soon? The trucking industry graveyard is littered with companies that can make that claim. Yet at Waste Connections, now the second largest waste firm in North America, it’s remarkably business as usual.
According to company officials, credit for such stability goes in one part to an innovative business management model, one part to a distinctive company culture, and one part to the support of supplier partners like Peterbilt, which has served Waste Connections for the two decades of its existence and recently helped the company introduce the new Model 520 to its operations.
Noteworthy is the fact that it may not be just those independent attributes that define the success of Waste Connections, but how they integrate with each other. For example, Chairman and CEO Ron Mittelstaedt, who founded the company in 1997, says the business model wouldn’t succeed without the supplier support they have.
“We have what we call a decentralized operating model,” says Mittelstaedt. “It’s designed to be a relatively flat organization. The decision making on most day-to-day matters is put in the hands of leadership at the local level.”
For Waste Connections, “the local level” means many varied and widespread locations. The company operates in 40 states and five Canadian provinces, targeting secondary rural and suburban markets that make up about 85 percent of the company’s business. Waste Connections owns about 600 facilities that operate in recovery and collection, transfer stations and landfills.
Equipment procurement can provide challenges, according to Vice President Maintenance and Fleet Management Greg Thibodeaux and Corporate Fleet Manager James Seifert.
“In Alaska, we need a 6-by-6 vehicle, all six wheels drive,” says Seifert. “In Vancouver, it will be a completely different truck due to bridge laws and weight laws. The truck we send to New York is different from the central and southern truck.”
Adds Mittelstaedt, “The spec is very specific to what services we provide and the operating environment in that market — road conditions, weight restrictions, climate. So we don’t go to a manufacturer and say we want 200 trucks, and we’ll take delivery here in April. We say we want 200 trucks and 200 bodies and there are going to be 27 different configurations, and here’s the list of places where you’ll deliver them.”
To ensure a proper spec for the Peterbilt Model 520s Waste Connections began ordering in 2016, local feedback is essential. If that sounds like a no-brainer, both Thibodeaux and Seifert say they’ve seen management models where local feedback wasn’t engaged at all.
“I was a maintenance manager at another company and I didn’t have the opportunity to help choose what corporate bought and delivered,” says Thibodeaux. “I’d basically get a chassis that didn’t work for our operations. I had no input on brakes, tire sizes, axle configurations. Everybody got the same truck.
“I totally understand that each location may have some variations of spec that is necessary to either fit their fleet or the routes they may be running on a daily basis.”
Locally empowered district managers and maintenance managers are pleased to see a working model that ensures they have the right spec for their working environment, according to Seifert. They were also impressed at how well the model worked.
But empowering local districts required that those districts have local supplier support. The fact that the Peterbilt presence is growing significantly in Waste Connections operations throughout North America is testament to the Peterbilt dealer organization, which provides local operations a direct liaison to resources at Peterbilt. Seifert says local operations work with many Peterbilt dealer groups, from the largest to the smallest, particularly in the development of a local spec.
“The relationship Peterbilt has provided for us, what Peterbilt does for us, is really top shelf,” he says. “I call them Waste Connection employees. They’re a business partner, not a vendor, and that makes a tremendous difference. When we need something, our districts have that direct connection to the factory to get things solved.
“Partners ask you, what can we do to make your job easier? The thing is, we’re growing very fast, and the number one thing that comes up for us is supplier support. In Peterbilt’s case, that means putting trucks on the ground. We need ‘em? We have ‘em.
“That’s the way they work with us. We have a supplier who understands our needs enough that they’ll ensure that inventory is available for us when we need it. We may have an emergency situation where we need equipment as soon as possible. Peterbilt and the Peterbilt dealer network have gone above and beyond to ensure that we have the support we may need.”
Model 520s in service
More than 100 Model 520s, many spec’ed with PACCAR MX-11 and PX-9 Engines, are now in service across North America for Waste Connections. While the versatility of the Model 520 that allows multiple loading and drive configurations is essential to Waste Connections, of particular importance are some of the safety features of the vehicle. For example, Seifert cited LED headlamps, wiper coverage 27 percent greater than comparable models and an ergonomic cab and dash design that promotes driver comfort and minimizes fatigue.
Features such as a 65-degree cab tilt enhance serviceability and add a safety feature for those often overlooked in the safety discussion — service technicians.
“We don’t have issues with lockout/tagout technologies with Peterbilt,” says Seifert. “A mechanic can safely work on that truck without injuring himself. With others, it’s been a concern.”
Adds Mittelstaedt, “A lot of companies talk about safety but when push comes to shove, it’s really second to productivity and profitability. For example, the company we acquired in Canada in 2016 had an accident-injury rate 350 percent higher than ours, per vehicle. In the first six months we empowered our new employees, 4500 drivers, to get rid of unsafe stops. We had to let go of $50 million worth of business in those first six months, tens of thousands of stops.
“Safety trumps all here. That’s why it’s number one in our values.”
Ground level success
It all contributes to the culture of success that begins at ground level, Mittelstaedt notes.
“The last thing a local operations manager wants is someone who sits 2,000 miles away in an office to do their capital allocation procurement decisions for them. That causes strife at both the corporate and local levels. We tell our local operations, ‘You’re picking what you need and you’re going to tell us why you need it.’
“When you take those decisions away from the local levels you get dumbed-down leaders. We prefer them engaged and accountable.”
And those accountable leaders are trending toward Peterbilt, says Thibodeaux.
“We’re seeing a transition,” he says, noting that the company they recently acquired had a single-source relationship with another truck supplier. “We’re seeing a move toward Peterbilt among our local districts. Peterbilt is on the leading edge of technology, and they’ve really proven themselves as a partner over the years.”