Rising lumber costs will further lead to price growth for market products.
Los Angeles, CA (PRWEB) March 26, 2014
Buyers of wooden shipping crates and boxes have a buyer power score of 3.6 out of 5, reflecting a stronger level of negotiation power for buyers. Buyer purchasing power has declined over the three years to 2013. Price movements of wooden shipping crates and boxes are dependent on industrial manufacturing levels, the number of businesses and the number of new car sales. These drivers experienced moderate to strong growth rates as the economy stabilized after the recession, which contributed to higher prices for market products. “Prices are forecast to grow, albeit at a slower rate, over the next three years as the economy continues to improve and more shipping services are demanded,” says IBISWorld business research analyst Hayk Muradyan.
Rising lumber costs, the largest expense category for market suppliers, have driven up the prices of wooden crates and boxes. As input prices rose, suppliers with already low profit margins were forced to pass on some of the cost increases in the form of higher prices, which harmed buyers. “Consequently, declining supplier profit margins reduced buyer power by making it more difficult to negotiate on pricing,” says Muradyan. Buyers have also been negatively affected by moderate volatility rates due to fluctuations in upstream lumber prices, as well as spikes in new car sales. In addition, moderate product specialization has made it slightly harder for buyers to find suppliers that meet their specific product requirements. This has also contributed to moderate switching costs and lowered buyer negotiating power.
However, buyer power remains strong because of low market share concentration coupled with significant competition among market suppliers. Suppliers are increasingly engaging in price-based completion to win new customers and maintain or gain market share in a highly saturated market. As a result of these conditions, buyers can obtain favorable contractual agreements through bulk purchases of wooden crates and boxes at lower per-unit costs. Long-term contracts can also mitigate price spikes through price caps and controls, as suppliers will be more willing to include favorable terms in contracts because of greater cash flow certainty. Major vendors include Nefab Group, Universal Forest Products, Rehrig Pacific Company and CDC Packaging Corporation. For more information, visit IBISWorld’s Wooden Shipping Crates & Boxes procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of wooden shipping crates and boxes, which are typically used for storage or shipment. Wooden shipping crates may be built in a custom or standard size. Market products vary from small wooden boxes to large, custom oversized industrial crates and can ship a variety of contents such as automobile parts, aircraft parts, machines, motorcycles, food and beverage items, fine arts or sculptures and other unique or awkward items that require very precise design specifications. This report does not include plastic shipping crates, packaging boxes or bags.
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.