Trucking profitability has risen in past four years: report


KordaMentha industry analysis says strong competition and rising costs also mark a gradually improving picture

December 21, 2012

Trucking industry profitability has grown in the past four years, according to a report by financial specialists KordaMentha.

The first of a two part Road Freight Industry in Australia
report, the report also shows that interstate road freight transport’s five year growth spurt has continued, with the sector still the fastest growing in the trucking industry.

"The competitiveness of the industry is reflected in low industry returns," the report’s researchers write.

"With average profitability of just 6.2 percent [in 2011-12], the dividing line between success and failure and narrow.

"It is imperative that road freight operators measure and understand their costs and resist the temptation to buy new volume by underquoting."

Whilst this profitability mark is 40 percent below the average for all Australia of 10.2 percent, "it still represents a significant improvement on recent years", given the figure was 4.9 percent in 2008-09.

Costs over the period have risen more or less in line with inflation and it put at 2.6 percent a year for shorthaul and 2.8 percent for longhaul.

The report notes interstate freight growing at 4.8 percent a year, compared with intrastate freight’s 0.8 percent a year growth.

The two share 33 percent of the market but the interstate market is growing at its state-based counterpart’s expense, due to falling regional populations.

KordaMentha puts this down to capacity issues at Port Botany meaning Melbourne port receiving containers to be driven to Sydney.

It notes that articulated trucks have the highest utilisation rates, running laden 72 percent of the time on average in 2010.

The capital city and courier sector, at 34 percent of the market and growing at 2.4 percent a year, was riding the wave of online retailing distribution.

Bookmark and Share



You can also follow our updates by liking us on Facebook