Australia Freight and Logistics Market – Extremely Competitive Industry

The Australia Freight and Logistics market is expected to grow from USD 86.7 billion in 2022 to USD 121 billion by 2028, registering a growth rate of 5.85% during the forecast period (2022-2028).

October 3, 2023


According to a recent report published by Mordor Intelligence, the Australia Freight and Logistics market is expected to grow from USD 86.7 billion in 2022 to USD 121 billion by 2028, registering a growth rate of 5.85% during the forecast period (2022-2028). Due to rising consumer demand for goods and services as well as growing international trade, the market is extremely competitive and has been expanding significantly in recent years.

Around 70% of all goods transported in Australia are transported by road, making it the country's largest goods industry. Although a few major organizations dominate the market, a considerable number of smaller businesses are also active. The rail freight industry is also important, notably for bulk commodities like cereals and minerals. Due to the rising e-commerce demand, the air freight industry is becoming more vital for time-sensitive and expensive commodities like pharmaceuticals and electronics.

Increasing Free Trade Agreements with Several Countries:

Australia is a significant supplier of raw materials, including coal, iron ore, and natural gas, and the logistics sector is essential to the transportation of these products. The need for logistics services has also increased as a result of the expansion of e-commerce and the rise in the international trade of commodities.

The free trade agreements that Australia has with several nations, including China, Japan, Korea, and the United States, have made it easier for Australia and these nations to conduct business together. The nation's geographic location also makes it a desirable site for trade, providing quick access to the Asia-Pacific area, a market that is continually expanding.

One of the most important FTAs for Australia is the 2015-signed China-Australia Free Trade Agreement (ChAFTA). It has lowered tariffs on various products and services, including agricultural items, and has given Australian companies new chances in the Chinese market. Since the Japan-Australia Economic Partnership Agreement (JAEPA) was signed in 2014, tariffs on a variety of goods, including cattle, dairy products, and wine, have been removed. Due to this, Australia's exports to Japan, one of Australia's main trading partners, have increased.

Australia is one of the biggest exporters of wine in the world, and the sector has a major impact on the national economy. The expansion of new businesses and sectors due to the FTAs has also given logistics companies new opportunities to offer specialized services. Logistics businesses had to provide specialized wine industry services to accommodate the demand for Australian wines in foreign markets. These services consist of temperature-controlled shipping, unique packaging, and wine storage facilities that preserve wine quality while in transit.

Increasing Government Investments in Transport Infrastructure:

Australia has been investing in its infrastructure to boost the effectiveness of the logistics sector. The nation's enormous topography makes it difficult to reach many of its outlying regions. The government has been funding road and railroad infrastructure projects to get around this. The Western Sydney Airport, one of the larger initiatives, is scheduled to open in 2026. It is intended to be a top-notch logistics and freight hub that will aid in supplying the rising demand for air cargo. Economic growth and employment creation are also anticipated to result from the airport.

The government has also invested in programs to upgrade road infrastructure, notably the New South Wales' Pacific Highway Upgrade, which has shortened travel times and increased safety for large vehicles. Another example of a sizable road infrastructure project that will increase the effectiveness of freight movement is the Northern Connector Project in South Australia.

Additionally, the government has been spending money on projects like the Inland Rail to improve the rail system. Building a 1,700 km freight rail connection between Melbourne and Brisbane as part of this project will link rural areas with important ports and urban areas. The project is anticipated to lower transportation costs and boost freight movement efficiency. Overall, these infrastructure improvements have helped the Australian logistics sector become more efficient and better able to serve the industry.

Mergers and Consolidations in the Logistic Sector:

In recent years, there have been several mergers and consolidations in Australia's goods and logistics sector. Numerous causes have contributed to this tendency, such as intensifying competition, lower freight rates, and the requirement for economies of scale.

To increase its presence in Australia, Bolloré Logistics completed the full acquisition of Lynair Logistics. After being acquired by Bolloré Logistics Australia, Adelaide-based Lynair Logistics will maintain its name for a while and carry on with regular company activities. Lynair will continue operating as usual with the backing of Bolloré Logistics Australia and its extensive worldwide network. In the upcoming years, the Australian goods and logistics sector is anticipated to continue to consolidate as businesses look to boost productivity and cut expenses in an increasingly cutthroat market. To get a detailed analysis of the competitive landscape, refer to the Australia Freight and Logistics report published by Mordor Intelligence.

Effect of Declining Freight Rates :

The Australian freight industry has been experiencing a decline in freight rates due to a combination of global and domestic factors. The freight costs and volumes of 12 important routes out of China are measured by the Shanghai Containerized Freight Index, which has been falling for a whole year. Prices were lowered by declining quantities. These trends are likely to continue through 2023. Since the peak of the COVID-10 pandemic, when high demand and congestion at important international ports caused substantial disruption, freight rates have decreased significantly across the board. While Australia’s importers will benefit from lower freight rates, most will also bear the cost of larger than necessary inventories as goods remain held up at sea or in port.

Key Players and Competition in the Australian Logistics Market:

Various domestic and foreign businesses are engaged in the fiercely competitive Australian logistics market. Toll Group, Linfox, Qube Holdings, Mainfreight, DHL, FedEx, UPS, and Australia Post are a few of the significant companies in the market. There are also a lot of smaller businesses that focus on particular industries or geographical areas.

Learn More

For more information about this fast-growing market, have a look at the Australia Logistics market, a 200+ page report with detailed insights on market trends, dynamics, segmentation, competitive landscape, and company profiles of key logistics companies.

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