Residential Collection: Continued Emphasis on Raising the Margin Floor

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Residential Collection: Continued Emphasis on Raising the Margin Floor

July 8, 2026 | 01:00 ET~

Environmental Services

Residential Collection: Continued Emphasis on Environmental Services

Raising the Margin Floor Devin Dodge, CFA Analyst

devin.dodge@bmo.com (416) 359-6774

Aryan Arora Associate

Bottom Line: aryan1.arora@bmo.com (416) 716-1875

Residential collection is among the most competitive lines of business for solid waste Legal Entity: BMO Nesbitt Burns Inc.

but also a key source of volume. In general, we believe there has been significant

progress toward improving returns for residential services, and it has been a key driver

for overall solid waste margin expansion. Looking ahead, we believe there is further

runway for this trend to continue but suspect the tailwinds may be less pronounced.

Key Points

Residential is a significant source of MSW waste, accounting for an estimated

40-60% of volumes. Services are typically provided under exclusive, long-term

agreements, or via subscriptions with individual homeowners. Residential collection is

highly competitive, as the barriers to entry are low, while the high volumes, density and

duration of municipal contracts can attract significant interest from competitors.

Increased willingness to shed low-margin residential contracts. For the last 10+

years, the large public waste companies have been focused on improving financial

returns and safety performance in their residential books of business. This has resulted

in a greater emphasis on price over volume, a shift away from rear-loader collection

vehicles, multiple years of shrinking tonnage and a revenue mix shift toward other

services. In 2025, residential collection accounted for an average of ~30% of solid waste

revenues, down from >35% a decade ago.