Part 1 – Industry overview
Australian logistics is a $94 billion industry comprising road, rail, air and sea freight, together with warehousing and handling. Road freight is the predominant mode of freight transport. The road freight industry is highly competitive. Smaller operators in particular have little influence over major costs such as fuel and labour or over the price they are able to charge their customers. They are price-takers. Even larger operators struggle to differentiate their services from those provided by a large number of owner/drivers and small operators who drive down price by engaging in price-led competition.
The competitiveness of the industry is reflected in low industry returns. With average profitability of just 6.2%, the dividing line between success and failure and narrow. It is imperative that road freight operators measure and understand their costs.
In this publication we provide an overview of the industry and examine major cost components. In January 2013 we will be releasing Part 2 of the publication, which will examine the outlook, challenges and opportunities for the industry.
To read this issue, please click here >>.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
