Bulk Storage Services Procurement Category Market Research Report from IBISWorld Has Been Updated with New Data

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Prices have grown at a moderate rate over the past three years; buyers have demanded increased storage capacity to support greater production of key commodities and to shield themselves from volatility in these commodities’ markets. 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 bulk storage services in its growing collection of procurement category market research reports.

IBISWorld procurement market research
Price growth will continue at a moderate pace because storage and throughput volumes will rise in response to increasing production and demand for key commodities.

Bulk storage services have a buyer power score of 3.1 out of 5, indicating moderate negotiation power for buyers. Several factors reduce buyer power. The storage of liquid bulk commodities, the market's dominant segment, requires specialized equipment, operating permits that are difficult to obtain and proximity to multiple types of infrastructure. As a result, barriers to entry are high in this segment. “The market's major players generate most of their revenue from liquid bulk storage, making the segment's market share concentration higher than the market average, which is already moderate,” says IBISWorld procurement analyst Hayden Shipp. “As such, buyers' choices for liquid storage capacity in optimal locations are fairly limited.” Also, buying lead times are lengthy for such locations, as buyers must wait for capacity to free up. Finally, regulatory pressures for liquid bulk storage are increasing in light of 2014's chemical spill into West Virginia's Elk River, which will further increase this market's barriers to entry.

However, several characteristics of this market bolster buyer power. Over the past three years, price volatility for bulk storage services has been subdued compared with price volatility for the commodities that are stored in suppliers' facilities. “Subdued price volatility is beneficial in this market because many commodities traders depend on bulk storage to shield them from risks associated with volatile commodities markets,” adds Shipp. Relatively mild volatility in storage prices has been a boon to buyers because the prices for many commodities put into storage (e.g. oil, ethanol, natural gas, steel, aluminum and sand) have been highly unstable during the past three years.

Buyer power is also enhanced by recent growth in suppliers' profit margins, which has increased the availability of discounts for buyers of long-term contracts or those that otherwise help a supplier achieve its operational goals. Finally, buyers of dry bulk storage enjoy higher negotiation power than the market average because this segment is more fragmented. For more information, visit IBISWorld’s bulk storage services procurement category market research report page.

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IBISWorld Procurement Report Key Topics

This report is intended to help buyers of bulk storage services. Bulk storage is used to hold liquid and dry bulk goods, including petroleum, chemicals, sand, aggregates, coal and metals. Suppliers provide in-ground and aboveground storage. Buyers include commodities traders, manufacturers and refiners. This report does not cover the bulk storage of food products.

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
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
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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