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SOURCE: IBISWorld Inc.
With manufacturing and consumption improving, as well as growth in international trade, industry operators will benefit from rising freight volumes. For these reasons, industry research firm IBISWorld has updated a report on the Freight Packing and Logistics Services industry in its growing industry report collection.
Los Angeles, CA (PRWEB) March 23, 2013
Though revenue dropped during the recession, the Freight Packing and Logistics Services industry's performance has started to improve with growing activity from freight transportation and demand from trade. According to IBISWorld industry analyst Lauren Setar, “The industry performed particularly poorly in 2009, when revenue fell 14.5% due to sharp declines in freight volumes and trade because of the global economic downturn.” During this time, demand declined because fewer products needed to be shipped causing greater price competition among operators. In late 2010, however, demand improved and is expected to continue rising, and revenue to is projected grow 3.2% during 2013. This limited growth will continue to keep industry revenue below prerecession levels with an average annual decline of 1.0% to $1.8 billion in the five years to 2013.
Despite relatively strong recovery in demand, the number of establishments is expected to grow slowly at an average annual rate of just 0.6% in the five years to 2013, as many firms continue to struggle from the recession's aftereffects. “The industry typically employs a flexible labor force; employers hire new staff to meet increased demand and then shed workers in difficult years,” Setar says. In 2009, falling demand caused a particularly steep decrease in employment and wages. As a result, in the five years to 2013, the Freight Packing and Logistics Services industry employment and wages are estimated to fall.
The Freight Packing and Logistics Services industry has a low level of concentration. The industry mostly includes small players that service specific regions or market sectors, but the industry does have one major player, CHEP USA. Additionally, the low market share concentration is due to the relative ease of entry and exit, enabling a large number of companies to operate in the industry. The top four firms in the industry account for less than 40.0% of total revenue. Due to the highly fragmented nature of the industry, its concentration has not changed much in the past five years; however, slight consolidation and increased external competition have forced many operators out of the industry altogether. This trend is expected to remain the same in the five years to 2018.
During the five years to 2018, revenue is expected to return to steady growth, underpinned by increased freight volumes, a rebound in international trade and higher trucking and rail activity. As a result, revenue is projected to grow in the five years to 2018. These improvements will allow profit margins to rise as the industry starts to grow again. However, the industry will likely face increasing pressure during the next five years as integrated logistic networks continue to expand, as major transportation operators bring more auxiliary transportation activities in-house, and as the use of digital technology reduces demand for some services. For more information, visit IBISWorld’s Freight Packing and Logistics Services in the US industry report page.
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IBISWorld industry Report Key Topics
This industry's main activity is providing packing and crating services for the transportation sector. The industry is comprised of companies that provide consolidation of freight consignments, trade document preparation, packing, crating and otherwise preparing goods for transportation and logistics consulting services. The industry does not include actual transportation of goods.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld 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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