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Industry · November 20, 2019

A Decade of Data: What 2014 Tells Us About 2024

Looking back at our 2014 numbers gives a sense of how the IBC reuse economy has matured.

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SL
Sara Lindholm
8 min read · November 20, 2019

I started at IBC Illinois in 2014. The yard was still in Battle Creek then. I had access to ten years of operational data when I started routing in 2017, and looking back at the 2014 numbers from where we are today is genuinely instructive.

Volume

2014 yard throughput: 4,200 tanks reconditioned or resold. 2023: 14,800 tanks. The growth has been roughly compound annual 14% over that period.

The first thought: that's a lot of demand expansion. The second thought: about 60% of it is genuine market expansion, 40% is competitive consolidation as smaller regional players retired or got bought.

Mix

2014 mix: roughly 70% as-is used, 25% reconditioned, 5% repurposed. 2023 mix: 35% as-is used, 55% reconditioned, 10% repurposed.

The shift toward reconditioned reflects two things: rising buyer sophistication about chain-of-custody, and the FDA's draft 2021 guidance giving permission for food-contact reuse.

Price per tank

2014 average outbound price: $87/tank. 2023 average: $148/tank. Adjusted for CPI inflation that's roughly a 30% real-price increase.

The real-price increase is partly mix shift (reconditioned costs more than as-is) and partly that the market values the chain-of-custody documentation now in a way it didn't in 2014.

Customer geography

2014 customer geography: 78% within 100 miles, 95% within 250 miles, 5% farther. 2023: 51% within 100 miles, 78% within 250 miles, 22% farther.

The geographic expansion reflects our willingness to do truckload outbound deliveries beyond Tier 1. The 22% farther figure includes loads to Pennsylvania, Tennessee, North Carolina, and one to Texas this year.

What I learn from this

Three things:

  1. The reuse market has been growing faster than the new market for at least a decade.
  2. Buyers care about documentation now in a way they didn't ten years ago.
  3. Geographic reach is more elastic than I thought it would be. Trucking economics that didn't work in 2014 work today because diesel relative to product value has shifted.

What I predict for 2034

I think reconditioned will overtake as-is in market share by 2027 and stay there. I think the repurposed segment will roughly triple. I think the EPR fees coming online in some states will pull Midwest reconditioners' share up by another 4–6 percentage points.

The new-tote market won't disappear — there are real applications where new is the right call — but the share of total volume going to reuse is climbing steadily, and I don't see a force that would reverse that.

Ten years of data tells a clear story: the reuse market is the maturing one, the new market is the legacy one. That's the inverse of what most outside-the-industry observers assume.