- Tags : Transport & Logistics | Third-Party Logistics Services | Price trend | Price forecast | Procurement research | Category market forecast
Recent Price Trend - Third-Party Logistics Services
From 2014 to 2017, prices for 3PL services have been rising at an estimated average annual rate of 1.3%, negatively affecting buyers. Rising input costs combined with growing demand have caused prices to rise. However, minimal fluctuations among price drivers have contributed to low price volatility, which buyers can use to their advantage. Moreover, the prevalence of multiyear contracts gives buyers a powerful negotiating tool that can be used to lock in favorable pricing.
During the three years to 2017, the price of transportation and storage has been rising significantly. As a key cost to suppliers, growth in transportation and storage prices have pressured costs upward. In turn, rising purchase costs have forced suppliers to raise prices or risk compromising their profit margins. In light of rising demand, suppliers have the flexibility to raise prices alongside growing costs to help protect their bottom line with little risk of losing business.
Demand growth has made it more difficult for buyers to negotiate, pressuring prices upward. Growth in the total trade value and industrial production index indicates strong economic growth, which has translated into improving sales in a wide range of markets. In turn, growing businesses have turned to 3PL suppliers to help them scale their operations quickly, which has led to strong sales in the 3PL market. Moreover, consumer spending has increased, suggesting that retail businesses in particular have been demanding more 3PL services to accommodate an influx of online and retail purchasing activity. As buyers across all types of downstream markets have increased their demand, suppliers have been enabled to increase prices. Fortunately, price volatility has been low, allowing buyers to anticipate price trends and budget accordingly while competition in the market help to temper growth slightly.
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