Price growth will decelerate as suppliers’ fuel costs drop at a faster pace in the coming years
Los Angeles, CA (PRWEB) April 21, 2015
Bulk food-grade transportation services have a buyer power score of 3.8 out of 5, indicating generally favorable purchasing conditions for buyers. “This market is fragmented due to its low barriers to entry and the fact that most bulk food products are perishable and are only moved relatively short distances,” says IBISWorld research analyst Hayden Shipp. “As such, many small suppliers are scattered throughout the country, typically serving local and regional markets.” Suppliers include Ruan Transportation Management Systems, Cherokee Freight Lines, LCL Bulk Transport Inc. and Venezia Bulk Transport Inc. Buyers benefit from this market structure because it increases their choice of supplier and promotes competition on the basis of price and service.
During the past three years, high competition and declines in fuel cost have resulted in relatively low price growth for Bulk Food-Grade Transportation Services, benefiting buyers. “Despite rising consumer spending on food products, increased food production and fast growth in the agricultural price index, market price gains have remained below inflation,” Shipp says. In particular, the decline in the price of diesel fuel, carriers' primary material input, has helped mitigate price increases. Subdued global economic growth combined with rising oil production at home and abroad has brought down the price of fuel. Because fuel surcharges are a portion of suppliers' base rates, buyers have felt a direct benefit from carriers' fuel cost savings.
This market's main substitutes are rail and waterborne transport, which are slower than trucks, making them suitable only for buyers that ship sturdy products that can withstand longer transport times. Additionally, the inability of these substitute transport modes to provide last-mile services to most facilities increases dependence on market suppliers for at least a portion of a shipment's journey, which hurts buyer negotiation power. For more information, visit IBISWorld’s Bulk Food-Grade Transportation Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of bulk food-grade trucking services. Suppliers of these services transport a variety of dry and liquid bulk food-grade products, including milk, wine, cooking oils, grains, sweeteners, juices and vinegar. Suppliers in this market are also called carriers, and buyers are also called shippers.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
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.