Road freight forwarding on the up in Australia

A new report by Ibisworld has said the road freight forwarding industry is expected to face more favourable trading conditions over the next five years. This sector of the transport industry, which uses consolidation to gain efficiency by combining loads from multiple clients and, as a result, use transport as efficiently as possible, has seen the advantages of consolidation reduce in the past five years. However, the report talks about the increasing sophistication in the logistics sector reaping rewards.

“Third-party logistics services have increased rapidly and the rise of vertically integrated logistics companies has eclipsed growth in the industry,” said Caroline Finch, Ibisworld Industry Analyst. “Australia's total freight task is expected to double by 2020, which will support future revenue growth. Across major markets, demand is expected to vary.”

In the past five years, revenues in the industry have reduced to around $2.2 billion a year. However, this reduction is seen as reflecting the reduction in the global oil price after the large increase in revenues due to fuel price levies in 2007 and 2008. Revenues are expected to increase by just 0.5% for this year.

In its analysis of the industry, the Ibisworld report stated road freight forwarding has a medium level of concentration with larger players earning a disproportionate share of revenue relative to their share of industry employment. The four large industry players identified are DHL Global Forwarding, TNT Australia, Schenker Australia and Toll.

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