Road Freight Forwarding in Australia Industry Market Research Report Now Updated by IBISWorld
(PRWEB) June 02, 2014 -- Freight forwarders purchase space on freight transport services in bulk, which they then onsell in smaller quantities to clients. The distinguishing feature of their activities is the consolidation of loads from multiple clients to use transport space as efficiently as possible. Through this service, clients gain access to cheaper freight rates than they could achieve individually. Road freight forwarders receive a commission for their service. Over the five years through 2013-14, industry revenue is forecast to decline by an annualised 0.9%. The industry's performance is expected to be more positive in 2013-14, with revenue forecast to grow by 2.7% to reach $2.3 billion. The industry's weak performance over the past five years is largely due to the high level of competition and the changing structure of the industry. The value of the industry's consolidation service has diminished over the past five years. As Australia's freight task has grown, the logistics sector has increased in sophistication. The industry has a complicated relationship with the Road Freight Transport industry, which operates as an upstream industry and a direct competitor in many markets. IBISWorld industry analyst Stephen Gargano states, “Integrated logistics operators that are primarily involved in road freight transport have expanded into the industry's major markets.” By offering a range of ancillary freight services, these companies took market share from industry operators in the years following the global financial crisis. In an effort to protect market share, many operators have sought to compete on price. As purchase costs such as freight space and fuel increased, some operators absorbed more of these costs, thereby sacrificing margins.
Australia's total freight task is expected to double by 2020, supporting future revenue growth. Consumer goods are generally transported by road freight, increasing the market for road freight forwarders. The Road Freight Transport industry is expected to continue to outperform the Road Freight Forwarding industry over the next five years, although road freight forwarders are still expected to benefit from rising demand. According to Gargano, “demand from manufacturing is expected to decline over the period, while the need for industry services to transport imports upon arrival will increase.”
The Road Freight Forwarding industry is characterised by a low level of market share concentration. Large companies are active in freight forwarding as part of their integrated logistics business. These companies often operate on a global scale. With sophisticated technology and a range of related services, they are able to attract large clients and purchase space in bulk. The industry's largest players earn a disproportionate share of revenue relative to their share of industry employment. Concentration is expected to increase over the next five years, as larger players continue to grow through acquisitions to achieve economies of scale and scope. The industry’s major players include DHL Global Forwarding, TNT Australia, Toll Holdings, Linfox and Schenker Australia. For more information, visit IBISWorld’s Road Freight Forwarding report in Australia industry page.
Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau.
IBISWorld Industry Report Key Topics
Road freight forwarders are mainly engaged in organising transport services and consolidating goods for transport. Consolidating loads allows road freight forwarders to achieve and pass on rates that their customers would be unable to achieve alone. Road freight forwarders do not provide underlying transport services.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.
Gavin Smith, IBISWorld, http://www.ibisworld.com.au, +61 396553833, [email protected]
Share this article