Australia’s road transport industry has achieved significant growth in the past 25 years
Australia’s road transport industry has achieved significant growth during the past 25 years
Australia is a nation characterised by vast distances, large uninhabited areas and seemingly never- ending roads. For close to a century, road freight has provided a vital link between the nation’s cities. Trucks have acted as an economic artery, carrying goods, livestock and agricultural products throughout the land.
The ability to transport goods by road has fuelled export growth and cemented Australia’s position in the global economy. To this day, road freight remains vital to the economic success of our nation, and is expected to haul in $ 42.6 billion in revenue in 2017-18.
Over the decades, small operators have been the dominate force in road freight transportation, with non- employers accounting for approximately 50 per cent of the road freight industry’s enterprises.
However, the business structures of the industry’s larger companies differ significantly compared with the industry’s small- and medium-size companies.
The industry’s larger players, such as Toll and Linfox, provide integrated logistics and distribution services. Due to their market power, these companies are in a stronger position to adjust prices to protect profits.
Contrastingly, fierce competition has characterised the lower tiers of the industry over the past 25 years.
Sources of road freight demand have shifted over the past 25 years. Wholesalers have grown in importance as the need to transport imports on arrival to Australia has increased. Total merchandise imports and exports have risen drastically over the period, increasing from $120.3 billion in 1992-93 to an expected $ 530.6 billion in 2017-18.
In the 1990s, road freight surpassed 100 billion tonne-kilometres (tkm), a measure of tonnes transported per kilometre, for the first time in the history of Australian road freight. By the end of the 1990s, road freight drove steadily past 130 billion tkm per year, and has since continued this upward trajectory.
Strong consumer demand for cheaper imported products has supported demand growth for road freight transport services to transport these goods from ports to warehouses. While wholesalers have grown in importance, demand from many areas of the manufacturing division has declined in more recent times, restricting industry revenue growth over the past five years. This trend has largely occurred due to Australia’s inability to compete with low-wage manufacturing in many countries in Asia.
Over the past 25 years, road freight overtook coastal freight as a share of actual domestic freight tasks. As the online economy has grown in importance, speed and efficiency have become critical, and road freight is typically faster than coastal freight. To take advantage of the growth in online shopping, many operators have launched initiatives to help their customers, such as online tracking and express delivery options.
However, technological change in the industry has remained stable. No significant new products have been launched into the market since the introduction of B-double trailers in the late 1980s, as road infrastructure significantly limits any increase in truck and trailer sizes.
In response to the increasingly global economy, the industry has shifted towards developing integrated logistical supply networks, which span across transport modes and international borders. Road freight has always been part of Australia’s economy, creating a vital link between our widely spaced cities.
The industry’s strong performance over the past 25 years is a reflection of road freight’s importance to the Australian economy.
“Road freight has always been part of Australia’s economy, creating a vital link between our widely spaced cities”
Above: Total merchandise imports and exports increased from $120.3 billion in 1992-93 to an expected $530.6 billion in 2017-18