Road Ahead: Local Freight Trucking Services Procurement Category Market Research Report from IBISWorld has Been Updated

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Moderate growth in consumer spending, industrial production and trade have been increasing demand for local trucking; however, fuel cost slowdowns, stable wages and a high level of price-based competition have been tempering this 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 Local Freight Trucking Services in its growing collection of procurement category market research reports.

IBISWorld procurement market research
Demand will continue to rise, pressuring prices upward at a mild rate

Local freight trucking services have a buyer power score of 3.6 out of 5, indicating favorable market conditions for buyers. “Hundreds of thousands of carriers provide local freight trucking services, indicating a significant level of competition that provides buyers with significant leverage in negotiations,” says IBISWorld research analyst Scott Winters. “Carriers compete largely on the bases of price, service and location.” As a result of these market characteristics, buyers can easily replace their carrier if they do not meet expectations. Switching costs are negligible for ad hoc shipping, but they are also very low for contract shipping because buyers can negotiate for termination clauses that allow contract exit without financial penalty. These factors bolster buyers' ability to negotiate favorable purchasing agreements.

High supplier competition and trends in suppliers' two main input costs, wages and fuel, have created a favorable pricing environment for local freight trucking service buyers. According to Winters, stable wage costs during the three years to 2014 and a recent decline in fuel costs have been relieving some of the upward pressure on market prices stemming from moderate demand growth indicated by recent boosts in consumer spending, industrial production and trade. Additionally, the number of carriers serving this market has been rising moderately during the past three years, keeping price-based competition high despite rising demand. Current suppliers include Con-way Inc., JB Hunt Transport Services Inc. and Schneider National Inc.

Unfortunately for buyers, this market's low substitute availability detracts from negotiation power. Local trucking services are necessary for the initial or final phase of transport for most goods, so buyers cannot leverage other modes of transport in negotiations because other modes do not provide the last-mile service that trucks do. Additionally, risk in this market is largely linked to diesel costs, which are volatile. Fuel surcharges are universal in this market, but they only account for a minor portion of most carriers' total price. For more information, visit IBISWorld’s Local Freight Trucking Services procurement category market research report page.

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IBISWorld Procurement Report Key Topics

This report is intended to assist buyers of local freight trucking services. This market’s suppliers, also called carriers, provide trucking services within a metropolitan area, making their shipping routes short enough for same-day returns. Carriers move palletized general cargo primarily using box trucks for transport. Suppliers are not specialized carriers, and they do not focus on refrigerated transport, automobile transport, intermodal container transport, oversize-load transport or the transport of bulk liquids or dry goods.

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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