Transportation Australia Market Intelligence

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  • What are the key trends in Transportation Australia category?
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  • What are the major challenges and risks in Transportation Australia industry?
  • How is Transportation Australia industry performing?

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Report Coverage

  • Trucking Industries' Landscape
  • Australia – Road Freight Cost Index
  • Australia Road Freight Cost Structure

Market Size

CAGR

2.5 %

Table of contents

  1. Category Intelligence Summary
  1. Australia Transportation
  1. Road Freight - Australia
  1. Trucking Service Providers Landscape
  1. Road Freight Cost Structure Analysis
  1. Porter’s Five Forces Analysis – Road Freight Industry
  1. Rail Freight - Australia
  1. Rail Freight Service Providers Landscape
  1. Australia CEP Market
  1. Porter’s Five Forces Analysis – Parcel Industry

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Regional Market Outlook On Transportation 

Australia's freight industry's projected growth is at 3 percent per annum between 2005 and 2030 and road is the predominant freight mode for non bulk freight movements between inter capital corridors.

Rail is most significant on the long Eastern States–Perth corridor, where it currently moves around 57 percent of total inter capital origin–destination non-bulk freight but it is reliant on road freight transport for the pick-up and delivery of freight to and from the rail terminals.

  • Australia's freight industry's projected growth is at 3 percent per annum between 2005 and 2030 , with domestic demand for manufactured goods underpinning much of road freight's future growth and rail freight growth supported by expected mineral export growth
  • Road is the predominant freight mode for non bulk freight movements between inter capital corridors whereas rail freight is mostly used for bulk freight movements
  • Rail is most significant on the long Eastern States–Perth corridor, where it currently moves around 57 percent of total inter capital origin–destination non-bulk freight
  • Coastal shipping is responsible for around 17 percent of total domestic freight movements and comprises 10 percent of total freight volumes through Australian ports

Market Overview – Road Freight

In Australia, trucking industry competes well with rail, sea and air freight industries, as trucking is considered to be a reliable, convenient door to door delivery option and major domestic freight movements are handled by trucks.

The national freight movement is projected to double by 2030, and as such, the number of heavy vehicles on Australian roads is also set to increase continuously as the domestic demand for manufactured goods increases.

Overview

  • Road transport dominates the Australian market for non bulk freight due to its advantages in price, speed, convenience and reliability
  • In Australia, trucking industry competes well with rail, sea and air freight industries, as trucking is considered to be a reliable, convenient door to door delivery option and major domestic freight movements are handled by trucks
  • Thus, the  road freight transport industry accounts for around 80% of the revenue generated by the total Australian transportation industry

Current State

  • The trucking industry is undergoing a phase of transition with a 44% decline in the number of owner drivers since 2010
  • At the same time, the number of vehicle registered has increased by 6%, indicating a shift towards larger vehicle fleets
  • Despite the recession and other financial crisis, in the past five years, annual trucking industry growth has been at a rate of 2.4%

Industry Outlook

  • The national freight movement is projected to double by 2030, and as such, the number of heavy vehicles on Australian roads is also set to increase continuously as the domestic demand for manufactured goods increases
  • The long-term outlook remains positive, with industry revenue predicted to continuously grow at a rate of 2.9% over the next five years to reach AUD60.2 billion in 2020 from AUD42 billion in 2015
  • However, freight costs are also expected to rise, and with continued competitive pressure, net margins are not expected to improve

Road Freight Trend

The road freight industry is largely based on the Eastern seaboard of Australia with states such as Queensland, New South Wales and Victoria comprising cities Melbourne, Sydney and Brisbane respectively.

There are about 38,000 road freight business units operating in the Eastern seaboard which is 70 percent of total business units across the country and  the major impactful factors for the industry are Export and Import of Merchandise, Fuel Price fluctuation and Wholesale trade.

Road Freight Industry Drivers

  • The major impactful factors influencing the Australian road freight industry are Export and Import of Merchandise, Fuel Price fluctuation and Wholesale trade
  • Falling commodity prices in recent times and lower demand from China which have a significant negative effect on the value of exports which has directly impacted the road freight industry
  • World oil prices and exchange rate movements are critical to the road freight seeing a clear cost pressure on the sector
  • Modest sales of goods and services for wholesale trade in Australia has dropped which is a definite indicator for modest growth in demand for road freight

Freight Rate Trends in Major Cities

  • General freight was the major commodity moved by road in Australia, accounting for 22.4% of all tone-kilometers travelled. Food was the next highest contributor with 15.6% followed by Sand, stone and gravel with 9.5%
  • The road freight industry is largely based on the Eastern seaboard of Australia with states such as Queensland, New South Wales and Victoria comprising cities Melbourne, Sydney and Brisbane respectively
  • There are about 38,000 road freight business units operating in the above mentioned regions which takes about 70% of total business units across the country
  • LTL freight rates in cities Melbourne, Sydney and Brisbane has reduced since 2014 when compared to previous years, it is estimated to increase by 4 to 5% due to factors such as driver wages, fuel surcharges which is reviewed on monthly basis and depreciation cost on equipment

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