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.
