Drones, unmanned aerial vehicles, are one of the more spectacular risks facing the road transport industry. No longer just science fiction, with companies such as Flirtey in Australia and Amazon’s Prime Air in the US set to launch in 2015, it is easy to see that the transportation sector will need to evolve or get left behind on the ground.
"The industry will need between 1.1 billion and 4.5 billion through to 2018-19."
Mark Ganz, Director of Insights, ANZ
The immediate challenge however is more mundane. Existing low profit margins have seen consolidation in the industry with just 0.1 per cent of companies accounting for more than 40 per cent of sales.
Research by ANZ’s Client Insights and Solutions team shows the $50 billion road transportation industry will require significant funding if it is to take advantage of emerging opportunities and capitalise on increased efficiency.
Currently, the industry’s success depends on the success of its downstream markets, with 27 per cent of customer markets in manufacturing, 19 per cent in retail and 13 and 12 per cent in wholesale and construction respectively.
Transport traditionally is a very fragmented industry. Most companies currently operate short haul services with just 17 per cent operating nationwide. Recognising the difficulties in customer offering however, many small-scale players have started to join forces and realise the immense efficiency gains that can, and need to be, achieved in order to maintain profitability.
There is a lot at stake. The total profit pool up for grabs in 2018-19 will be $4.3billion. The Bureau of Infrastructure, Transport and Regional Economics (BITRE) Freightline report expects road transport volumes to almost double between now and 2030.