Friday, January 29, 2010, 9:56am PST | Modified: January 29, 2010, 9:56 AM

Routeware brings efficiency to waste management fleets

by Erik Siemers

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Steven Kaufman founded Routeware in 1999.

Excluding the evolution of the internal combustion engine, the waste management industry isn’t one to easily embrace technology.

So imagine the sales pitch required of Routeware Inc., the Beaverton-based company that launched 10 years ago with a plan to put computers onboard garbage trucks.

“This is a belt-and-suspenders, no-nonsense business,” said Steven Kaufman, Routeware’s senior vice president and one of its founders. “A lot of pen and paper. A lot of two-way radio.”

But with the help of early adopters and fueled by angel investors, Routeware could double its revenue this year to reach around $10 million.

It’s a critical point for the company, said CEO Robert DeKoning, who hopes Routeware could soon strike deals with some of the $50 billion waste management industry’s biggest players.

“It’s crossing that chasm from early adopter status,” he said. “We’re achieving some critical mass.”

Routeware’s technology equips garbage trucks with onboard computers that help better manage their routes.

The company says its value is in the data.

Coupled with Routeware’s software platform, waste management companies can monitor the efficiency of their fleets — crunching numbers on everything from time spent idling to driver behavior.

Onboard cameras serve as photographic back-up for use in customer-service dispute resolution.

A new Web-based platform to be released this year, called VehiclePort, will allow companies to measure the health of their fleet by monitoring vehicle performance, fuel consumption and even carbon emissions.

The result is a collection of data that waste management executives can use to better maximize results, Dekoning said.

“It’s giving them visibility on their three biggest assets: their trucks, drivers and the routes they run,” he said.

Bruce Parker, CEO of the National Solid Wastes Management Association, a Washington, D.C., trade group, said route optimization technologies like those provided by Routeware are becoming a critical tool in the industry’s growth.

“In the waste industry, time saved equals efficiency,” Parker said. “If you’re wasting time between stops and if you don’t work out your system properly, you’re going to lose a lot of time, you’re going to waste more energy on the trucks, more emissions from the tailpipe and obviously its going to be less efficient in terms of your profit.”

It’s a remarkable revelation within an industry Parker said is known for changing incrementally.

“It’s not a high-tech industry historically,” he said. “But it’s really being transformed now with technology in so many aspects of this industry.”

Routeware’s goal is to be the industry’s dominant technology provider.

Since its founding in 1999, the company has grown with the help of around $7 million from angel investors, including roughly $2 million from Lake Oswego-based Mt. Hood Equity Partners.

Bob Wiggins, manager of the private equity firm and a Routeware board member, said Mt. Hood’s initial investment in 2005 was made on the condition that the company appoint Dekoning as CEO.

Dekoning is known for his role as CEO of Unicru Inc., a Beaverton-based maker of hiring software, which he grew from $1.5 million in sales to $28 million in four years.

“He didn’t have any background in the waste industry, but he had a background in technology,” Wiggins said.” His skillset seemed to be the right skillset for taking the company to the next level.”

In the past four years, Routeware’s revenue has grown 420 percent, Dekoning said. It’s expected to double this year to somewhere in the range of $7 million to $10 million.

Routeware’s growth so far has been largely through regional haulers that Dekoning said “have to compete with the big guys.” Its local customers include Hillsboro Garbage Disposal Inc. and Pride Disposal Co. in Sherwood.

Of the estimated 156,000 garbage trucks in the country, Dekoning said close to 3,000 use Routeware, giving the company plenty of room to grow.

But when Dekoning refers to competing with the “big guys,” the target is on the back of the industry’s biggest player, Houston-based Waste Management Inc.

Dekoning said Waste Management, which reported 2008 revenue in excess of $13 billion, is large enough to have developed its own route management technologies.

But Routeware is now starting to gain traction with some of Waste Management’s more sizable competitors.

Folsom, Calif.-based Waste Connections Inc. — the nation’s fifth-largest hauler with about $1 billion in revenue, according to Waste Age magazine — is using Routeware’s technology in about 400 of its trucks.

Meanwhile, the nation’s second-largest hauler, Phoenix-based Republic Services Inc., which is expected to report 2009 revenue in excess of $8 billion, is in discussions with Routeware about testing its products, said spokeswoman Peg Mulloy.

“For everyone else that’s trying to compete with Waste Management, they would need to turn to technology like ours to get a competitive advantage,” he said. “We’ll level the playing field for them.”

Should the company be successful, sales could jump as high as $20 million by 2011, Dekoning said.

While Routeware’s product could apply to any industry with a fleet of vehicles and routes to manage, for now it’s keeping a laser-like focus on trash.

“Our vision is to be the number one technology provider to the waste industry,” Dekoning said. “We’re really evolving into that.”

esiemers@bizjournals.com | 503-219-3418