Australia Freight and Logistics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Australia Freight and Logistics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Australia freight and logistics market was valued at more than USD 75 billion in 2020, and it is estimated to witness a CAGR of more than 4.5% over the forecast period, 2021-2026. The market is driven by increasing investments in the logistics infrastructure, which has helped boost the country's capacity over the years.

The COVID-19 pandemic has led to an exponential increase in parcel movements, including e-commerce deliveries, putting strain on Australia Post’s pre-existing delivery model. Similarly, the freight and logistics industry has felt these impacts nationwide, particularly through the demand for the home delivery of groceries and medical supplies during the pandemic.

Road freight is the predominant mode of transport for urban, inter-urban, and regional freight, and it is a part of the supply chain for most imports in Australia. ​Even resource industries, which may be heavily reliant on rail or coastal shipping for transport of outputs or key inputs, rely on road freight to transport critical inputs, such as machinery, transport equipment, and other supplies.​​

The threat of new entrants in the market is low due to the high initial set-up cost and intense rivalry among the present players. Also, the government has played an important role in the development of the freight and logistics market by helping improve the freight network throughout Australia.

Key Market TrendsGrowing Urban Population leads to Busy Urban Freight Transport

Growth in online shopping may affect small goods transportation in the near future. Industry data shows that between 2006 and 2014, the number of light commercial vehicles grew by 35%, almost twice the rate of passenger vehicles (19.1%) and rigid trucks (20.78%). This indicated the importance of urban supply chains in a growing services economy.

The projected population growth and infrastructure demand in all Australian cities are significant concerns for the logistics sector. The Australia Infrastructure Audit found that the capital cities contributed AUD 854 billion to the economy in 2011, and they are projected to contribute AUD 1,621 billion in 2031. The majority of economic activities occur in the major cities, so urban freight may be as important for future growth as traditional long-distance freight.

The scale of potential growth in freight in some urban areas and along some corridors in cities is such that there may be a greater need to operate freight networks much more intensively in off-peak periods. This is likely to encounter strong resistance from the affected communities, which means that the strategy should also provide some guidance on how the industry can establish a ‘license to operate’ in the changing economy, i.e., how operators can strike a balance between meeting the community expectations and customer demand.

E-commerce is Rapidly Evolving in Australia

Australian e-commerce is rapidly evolving, as consumers have been depending heavily on online buying prior to and during the COVID-19 pandemic. The Australian B2C e-commerce market accounted for USD 22 billion in 2019. Woolworths.com.au lead the list of online stores by net sales (USD 1,402 million) in Australia in 2019. Other large and prominent players in the Australian market are apple.com, coles.com.au, bunnings.com.au, and danmurphys.com.au. The top five online stores in Australia accounted for 35% of the net sales of the top 100 online stores in 2019.

E-commerce holds a 1.80% share of Australia’s GDP. Australia ranks second on the global e-government index, 13th in the ease of doing business index, and 16th in the logistics performance index.

As many as 33% of Australian e-shoppers buy from abroad due to better availability of products while 32% buy due to the appealing offers. This makes Australian e-commerce an attractive market for both local and international businesses.

Competitive Landscape

The major companies in the country have adopted various modern technologies, such as warehousing management systems, automation, drone delivery, and the transportation management system, which has enabled better planning and tracking facilities, resulting in increased productivity and increased value proposition.

The market is moderately fragmented due to a large number of international players and their intense rivalry to gain market share.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

Deutsche Post DHL Group
Yusen Logistics Co. Ltd
DB Schenker
CEVA Logistics
Agility Logistics Pvt. Ltd
Mainfreight Limited
Kuehne + Nagel International AG
FedEx Corporation
DSV
Hellmann Worldwide Logistics
Linfox Pty Ltd
SCT Logistics
Aurizon Holdings Limited
Qube Holdings Ltd
Kings Transport
Toll Group
K&S Corporation Limited
Lindsay Australia
AirRoad Group
Glen Cameron Group

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