The Australian economy is entering a period of increased market pressures with expectations of rising inflation and wage growth with, and interest rate hikes anticipated over the coming years.
The potential exists for market forces to impact sector competition, as well as consumer and business sentiment, placing increased pressure on operator margins.
Importantly, the Australian Government is supporting the sector through significant investment, including $A120 billion over 10 years for land transport infrastructure.
Additionally, the 2022-23 Federal Budget announced a temporary six month halving of the fuel excise from A44c per litre to A22c per litre which will provide some much needed, albeit transitory, relief at the bowser – however noting that the full A22c saving will not in its entirety flow through to road transport operators.
Capital expenditure across the sector is at record lows. Australian road transport capex has historically, and continues to, lag global peers. Businesses will need to invest at some point which will require significant capital
To adapt to changing demands and market factors, businesses are moving from a “just in time” to a “just in case” supply model which will require a greater level of warehousing and improved supply chain efficiencies.
With a significant global focus on environmental, social and governance (ESG) practices, there will be continued pressure challenges faced by the industry to provide more efficient and innovative supply chain solutions.
With this will come increased investment to support sustainable solutions, such as electronic vehicles (EV’s)