{"id":437950,"date":"2026-09-11T21:00:06","date_gmt":"2026-09-11T14:00:06","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/back-up-the-garbage-truck-a-look-at-how-ai-will-impact-margins-in-ai-437950\/"},"modified":"2026-09-11T21:00:06","modified_gmt":"2026-09-11T14:00:06","slug":"back-up-the-garbage-truck-a-look-at-how-ai-will-impact-margins-in-ai","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/back-up-the-garbage-truck-a-look-at-how-ai-will-impact-margins-in-ai-437950\/","title":{"rendered":"Back up the garbage truck: A look at how AI will impact margins in AI"},"content":{"rendered":"
\n

I’m increasingly conviced that the trade in AI is no longer the model makers or the vendors, but at the user level. This is the RAMP trade that I’ve been writing about<\/a> since last year (real assets, margin potential).<\/p>\n

Today we get some insight into how it will unfold and the potential.<\/p>\n

At this point, you don’t need to build the best AI model to make money from artificial intelligence. You might just need a fleet of garbage trucks and a better way to route them.<\/p>\n

Waste Connections offers an interesting example of where this could be heading in hard-asset industries.\u00a0The company estimates its first wave of AI initiatives can deliver roughly 100 basis points of margin expansion by 2030, in comments to CIBC analysts.<\/p>\n

What is the plan?<\/p>\n

“Pricing optimisation tools have already contributed to stronger retained pricing, while dynamic AI-enabled route optimisation is expected to improve fleet utilisation, labour productivity and routing efficiency in 2027,” CIBC writes.<\/p>\n

That’s a blueprint for what other heavy-asset industries will do. We’ve already heard about airlines using AI to re-price flights and I’d expect much more of that as companies look to more-quickly align pricing with higher demand, and exploit it.<\/p>\n

Another use case that you’ve likely seen already is in customer service.<\/p>\n

“WCN also highlighted customer-service automation as a significant opportunity, noting that the company receives ~700,000 to more than 1MM inbound customer calls per month and believes technology could ultimately eliminate 60%-65% of those interactions through proactive customer communication, mobile applications and agentic AI.”<\/p>\n

The company stresses that this is just the beginning and is seeing quick paybacks on technology investments.<\/p>\n

In terms of earnings and the stock price, what is 100 bps of margin? In a business like waste management, it’s surprisingly little. It’s a high-margin business and going from 30% to 31% maps to a 4-5% rise in the stock price. That’s obviously good but it’s not exactly a big endorsement of the massive capex going into the space and the ungodly multiples put on model-makers and their vendors. it’s also notable that Waste Connections is a $40 billion company that’s only planning to invest $100m in technology, and it’s not clear how much of that is AI specific.<\/p>\n

Where I would focus is on industries that operate at very low margins: auto parts, aviation, steel, chemicals, packaging, food processing and trucking are some that come to mind. For a company earning a 3% operating margin, adding a point means improving operating profit by a third. That’s worth digging in on.<\/p>\n

This article was written by Adam Button at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

I’m increasingly conviced that the trade in AI is no longer the model makers or the vendors, but at the user level. This is the RAMP trade that I’ve been writing about…<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-437950","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/437950","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=437950"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/437950\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=437950"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=437950"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=437950"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}