Analysis of the state of the road freight industry

This project addresses a critical evidence gap in understanding the current health and viability of the Australian road freight industry amid rising business closures and policy scrutiny. There is limited up-to-date evidence on the full range of pressures facing operators, their relative scale, and the factors driving industry stress, including the role of sham contracting.

Using a mixed-methods approach, the research will combine financial analysis with qualitative stakeholder consultation to identify key trends, cost drivers, and market dynamics. The findings will provide a robust evidence base to inform government policy responses.

Participants

• Department of Infrastructure, Transport, Regional Development, Communications, Sport and the Arts
• Swinburne University of Technology

Project background

In 2025 the Australian road freight industry experienced a marked increase in business closures and financial stress, highlighting deep structural pressures within the sector.

Recent data indicates that a significant proportion of transport operators have ceased trading, with some estimates suggesting that around one in twelve road transport businesses closed in the past year—reflecting fragile profit margins and rising operational costs such as fuel, insurance, and compliance burdens that have eroded financial resilience, particularly among smaller and family-owned firms.

These closures have reverberated through supply chains and regional economies, underscoring the urgency of understanding the underlying drivers of industry distress.

Preliminary analysis of public listed trucking and logistics companies suggest a long-term decline in profitability (measured by return on asset (ROA)), and there is high- level evidence to suggest financial constraints faced by firms negatively affect profitability. Unpacking the factors driving the declining profitability and understanding the financial positions as well as determinants are crucial for the long-term viability of the industry.

Existing evidence on the road freight sector is largely descriptive or based on stakeholder surveys. While valuable, this evidence base has limitations for policy design. Industry reports typically present aggregate statistics without controlling for confounding factors or segmenting statistics into small, medium and large-sized businesses.

Surveys capture operator perceptions but may not accurately reflect the quantitative magnitude of different pressures for different-sized businesses. There is limited longitudinal analysis tracking how firm financial health has evolved over business cycles.

Perhaps most importantly, there has been no systematic attempt to disentangle external macroeconomic shocks—which may be transitory—from structural industry dynamics.

Project objectives

The main project objective is to develop an evidence-base to examine the financial pressures, firm-level financial health, and structural dynamics of Australia’s road freight industry, providing rigorous foundations for policy development.

This will be achieved by the following sub-objectives:

• A comprehensive review of the pressures faced by businesses, the relative scale of these pressures, and the key factors contributing to business closures.
• Quantitative analysis of firm-level cost structures, financial health, and predictors of financial distress;
• Assess industry structure dynamics and their implications for firm viability;
• Assess the impact on law-abiding business of non-compliant competitors;
• Enhance understanding of non-financial pressures on freight operators; and
• Assess the long-term viability of micro-business operators of heavy vehicles road freight

Please note …

This page will be a living record of this project. As it matures, hits milestones, etc., we’ll continue to add information, links, images, interviews and more. Watch this space!