Melbourne, Australia (PRWEB) November 28, 2012
The Road Freight Transport industry dominates the Australian market for non-bulk freight, with advantages in price, speed, convenience and reliability compared with other modes of transport. Within cities, light commercial vehicles are the dominant form of transport for the so-called last mile of delivery of goods. Yet, the industry has experienced turbulent times in the past five years. According to IBISWorld Industry analyst Caroline Finch, the industry has been under pressure, first from rising fuel prices and then from falling demand in the wake of the global financial crisis. Over the five years through 2012-13, industry revenue is expected to grow at a compound annual rate of 2.4% to be worth $ 48.3 billion in 2012-13, including growth of 2.4% in the current year.
As the economy strengthens, total inventories increase as activity across retail, manufacturing and wholesale expands, boosting demand for road freight services. The long-term outlook for industry demand is positive, with the total demand for freight movements in Australia set to increase over the next five years, says Finch. In the decade through 2012-13, the industry was able to innovate by adopting new technology such as larger trucks. This increased the labour productivity of the industry and allowed the industry to cater to growing demand. In the five years through 2017-18, the industry will likely face productivity challenges. The industry is expected to remain the dominant mode for transporting non-bulk goods around the country. Industry revenue is forecast to grow in the coming five years. Despite this growth, the industry may struggle to maintain profitability as it faces growing skills shortages, reductions in fuel rebates and the potential of changed pricing to access the country’s road networks.
The Road Freight Transport industry displays a low level of market share concentration. The four top players are Toll, Linfox, K&S, and Scott Corporation. Market power in the industry is highly concentrated. The major companies, although contributing a relative small amount to industry revenue, have significant market power through the whole supply chain and in infrastructure ownership. Significantly, their market concentration tends to increase when industry revenue growth slows, as in 2009-10. This demonstrates that when volumes drop it is the small players who get squeezed out of the industry, with the larger players as a group outperforming. Major customers in the retail, manufacturing and petroleum markets also have strong market power. Operators such as Toll, or retailers such as Coles and Woolworths, determine the freight rates that they are willing to pay. These rates then get passed down the industry hierarchy. This has resulted in small and medium size enterprises struggling to introduce fuel surcharges.
For more information, visit IBISWorlds Road Freight Transport report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry includes transport companies that ship freight by road. It also includes delivery services via road (excluding couriers), truck hire with driver and taxi truck services with driver. The industry does not include the in-house uses of fleet vehicles in mining, retail and construction.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios
About IBISWorld Inc.
Recognised as the nations most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian 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 Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.
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