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Increased cargo volumes, which have resulted from heightened trade, industrial production and consumer spending, are pushing market prices upward, but high competition and falling wage costs are limiting the extent of price growth. For these reasons and to help procurement professionals make better buying decisions faster, business intelligence firm, IBISWorld, has updated a report on the procurement of Material Handling Services in its growing collection of procurement category market research reports.
Los Angeles, CA (PRWEB) July 02, 2014
Material handling services have a buyer power score of 3.5 out of 5, indicating moderate negotiating power for buyers. Low supply chain risk is the main characteristic that elevates buyer power, says IBISWorld analyst Hayden Shipp. The most significant cost to suppliers is wages, which suppliers have significant control over and are nonvolatile. Additionally, the market's other price drivers have a low level of volatility on average. As a result, the threat of destabilizing market forces such as demand fluctuations or price shocks is low. Because prices are nonvolatile, ad hoc material handling expenses are predictable and can be accurately budgeted for. The market's low price volatility is an indicator of its mature life cycle stage. This stage benefits buyers because the market is fragmented and nearly saturated with suppliers. This market structure increases competition, which occurs primarily on the bases of price, service quality, add-on services and location.
Market suppliers include All Staffing Warehousing LLC, American Export Packing and Crating High and California Cross Dock Inc. High competition helps lower switching costs, bolstering buyer power by reducing dependence on incumbent suppliers, continues Shipp. Buyers that regularly require material handling services can negotiate for discounts because long-term contracts help suppliers gain efficiencies and a steady flow of cash. Over the past three years, high competition has dampened the pace of price growth. Still, price growth has remained moderate due to rising demand. Increasing cargo volumes, which have resulted from heightened trade, industrial production and consumer spending, have elevated demand and supported price growth.
Buyer power is slightly limited by the lack of substitutes for material handling services. The loading and unloading of goods at transport hubs can only be performed by material handling companies or freight carriers. Most buyers' firms do not have the equipment, access to facilities or labor force that would enable them to provide their own material handling services. However, because most suppliers in this market offer supply chain services beyond material handling, buyers can typically bundle material handling with services such as freight transport, freight forwarding or warehousing to reduce total shipping costs. For more information, visit IBISWorlds Material Handling Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of material handling services. These services include freight loading and unloading, as well as weighing services for containerized, palletized and bulk cargo shipped by trucks, ships, barges, trains and planes. Suppliers often provide additional supply chain services such as transport or warehousing. Alternatively, suppliers may focus on material handling at transportation hubs or buyers facilities.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorlds procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
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