Prices are expected to continue rising at a faster rate over the next three years as trade value and government expenditures rise
Los Angeles, CA (PRWEB) March 18, 2014
Dredging services have a buyer power score of 3.3 out of 5. Although price growth has been moderate and price volatility has been low, a variety of factors have stifled buyer power in the past three years. In particular, dredging is a significant component for maintaining waterway infrastructures and aquatic ecosystems and heavily dependent on federal funding. “Consequently, the demand for dredging services has been steadily rising due to increases in federal spending on waterway projects, the rising value of waterway-dependent trade and a growing concern for wetland conservation,” says IBISWorld business research analyst Daniel Krohn. Faced with escalating demand, suppliers have less incentive to negotiate with buyers, thereby diminishing buyer power.
Buyers' ability to negotiate favorable supply agreements is also limited by the high barriers to entry for suppliers and the limited geographic reach of existing suppliers. High upfront costs, a need for specialized skills, and government regulations restrict new vendors' entry to the dredging services market, which reduces competition. Meanwhile, high costs associated with transporting dredging equipment limit the geographic reach of existing suppliers. “As a result, buyers are afforded few available supplier options, and are therefore limited in shopping around for dredging services,” says Krohn.
Familiarizing new vendors with complex project parameters takes considerable time, making switching vendors difficult and costly. As such, high switching costs hamper buyers from seeking out alternative suppliers for comparable future jobs, thereby reducing the pressure on suppliers to maintain low prices with existing clients.
Small inland buyers typically demand simpler projects that involve shorter lead times, less technical skills, fewer regulations and less expensive equipment than large coastal buyers. As such, small inland buyers are afforded more supplier options and lower switching costs, increasing the pressure on small inland suppliers to compete based on price. Consequently, small inland buyers have more leverage to negotiate favorable supply agreements than coastal buyers. Major vendors include Great Lakes Dredge and Dock Company, Orion Marine Group Inc., Manson Construction Company and Royal Boskalis Westminter NV. For more information, visit IBISWorld’s Dredging Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of dredging services. Dredging service suppliers are primarily environmental engineering companies that remove bottom materials, such as silt and sediment, from water systems like rivers, ports, harbors or estuaries. Dredging services can be used to create or maintain waterways; prepare waterbeds for the construction of bridges, piers, or docks; prevent flooding; restore beaches; or to remove trash, debris and contamination. Dredging services for mining, harvesting and fishing purposes are excluded from this report.
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
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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.