In the three years to 2016, as the economy continues to improve, demand for refrigerated storage services will grow at a moderate rate. Frozen food industries are expected to store more products, boosting prices.
Los Angeles, CA (PRWEB) December 06, 2013
There is a high amount of buyer power when procuring refrigerated storage services. These services have a buyer power score of 4.2 out of 5.0, reflecting slightly more power for buyers than suppliers. Low price volatility, specialization and switching costs allow buyers to have a relatively high amount of power.
Prices for refrigerated storage, while higher than general storage or warehousing, have remained steady as services have remained in the mature stage of the market life cycle. Generally, features like location tend to be more important to buyers than price because the products buyers are storing in refrigerated warehouses are perishable. Consequently, location is crucial for buyers to be able to move their inventory as efficiently as possible. “Buyers must also be aware of the costs associated with refrigerated storage,” say IBISWorld analyst Lauren Setar. Typically, products reach the warehouse by way of temperature-controlled trucks; therefore, trucking is the main additional cost for buyers. Packaging, cross docking and distribution are also integral pieces of a product's journey to the desired end market so buyers should keep these costs in mind as well. Many refrigerated storage services suppliers will offer these services as an add-on to initial storage operations. These specifications will be laid out in the RFP process.
Ultimately, the location of firms, the total cost of ownership and a lack of available substitutes limit buyer negotiating power. According to Setar, although pricing has increased marginally in the three years to 2013, it is expected to grow faster in the three years to 2016. Therefore, buyers should try to lock in a long-term contract with a supplier. Unlike month-to-month agreements and short-term contracts, long-term contracts allow a buyer to negotiate for a lower price point. For more information, visit IBISWorld’s Refrigerated Storage Services procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of refrigerated storage services make informed purchasing decisions. Providers of refrigerated storage operate warehousing and storage facilities with refrigeration capabilities. Temperature-controlled services include blast freezing, tempering and atmosphere storage services. Suppliers of refrigerated storage generally store perishable goods like food and furs for trade; however, refrigerated storage services do not include companies that store farm commodities or fur for clothing. Additionally, this does not include refrigerated trucking services or packaging services, though many refrigerated storage companies offer these services as related purchases.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
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, IBISWorld’s 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.