Inland Water Cargo Transportation Services Procurement Category Market Research Report from IBISWorld has Been Updated

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The high market share of dominant carriers in the inland water cargo transportation market puts shippers at a disadvantage; because they control more than two-thirds of the market's capacity, the top four carriers influence long-term price trends and limit competition. 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 Inland Water Cargo Transportation Services in its growing collection of procurement category market research reports.

IBISWorld procurement market research
Rising fuel costs and further boosts in industrial production and trade will pressure market prices upward

Inland water cargo transportation services have a buyer power score of 3.3 out of 5, indicating a high level of purchasing power in this market for shippers compared with competing shipping modes. “Waterborne shipping is much less expensive than rail or truck shipping. However, it is also slower so it is recommended for bulk cargo that is not time sensitive,” according to IBISWorld business research analyst Hayden Shipp.

Increased shipments of bulk cargo during the past three years have resulted in higher demand for inland water cargo transport. Particularly, oil shipment volumes have grown strongly due to higher domestic production as well as the current shortage of pipeline infrastructure. Because oil and petroleum account for a larger share of this market's cargo than any other product segment, recent growth in oil shipments by barge has pressured prices upward. Fortunately for buyers, positive trends in carriers' main input costs (i.e. wages and fuel) have somewhat mitigated this upward pressure on price during the period; in 2014, carriers' wage and fuel costs have been nearly equal to levels in 2011. The net effect of input cost and demand trends has been only mild price growth, which has boosted buyers' purchasing power relative to inflation. “Mild price growth is forecast to continue during the three years to 2017, and an expected decline in price volatility will benefit buyers,” says Shipp.

However, the high market share of dominant carriers puts shippers at a disadvantage. Because they control more than two-thirds of the market's capacity, the top four carriers influence long-term price trends and limit competition. Furthermore, major carriers' combined market share has continued to rise as they acquire smaller operators' fleets. Major carriers also have a competitive advantage because they cover the broadest range of inland and coastal routes. Although using such carriers can reduce shippers' costs, their dominance detracts from negotiation power.

Still, shippers that send goods over routes that this market's carriers cover enjoy a more competitive shipping environment than those that only rail carriers serve. Such shippers should leverage their modal and carrier options in negotiations to reduce freight rates. Major vendors include Kirby Corporation, Ingram Industries Inc., American Commercial Lines LLC and American Electric Power Company Inc. For more information, visit IBISWorld’s Inland Water Cargo Transportation Services procurement category market research report page.

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IBISWorld Procurement Report Key Topics

This report is intended to help buyers of inland water cargo transportation, which includes transportation over lakes, rivers and coasts in the United States. The major waterways this market’s firms serve are the Mississippi River System, the Gulf Intracoastal Waterway, the Great Lakes-St. Lawrence Seaway, as well as the East and West Coasts. Buyers purchase shipping capacity on a spot basis (i.e. at current market rates) or through contracts. In this report, buyers are also called shippers and water cargo transport companies are also called carriers. This report does not include passenger transportation.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics

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.

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Gavin Smith
IBISWorld Inc.
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