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Home Automotive, Transportation and Warehousing The Australian logistics and warehousing industry is expected to increase at a...

The Australian logistics and warehousing industry is expected to increase at a CAGR of 3.4% from 2020 to 2025: Ken Research

1. Innovation, Infrastructure Investment and Technology Integration are Boosting Australia Logistics Market

Logistics Market in Australia

The Logistics Market in Australia grew at a positive CAGR during the period 2015-2020. Due to this, the logistics sector is considered a lifeline for the Australian Economy, contributing nearly 9% to the overall GDP. Additionally, the logistics sector grew at a considerable rate mainly due to the surge in the e-commerce sector, rise in manufacturing, increase in the use of technology and entry of foreign players in the 3PL segment. Also, an increase in infrastructure investment along with companies expanding on a massive scale helped the logistics sector growth a constant pace. With innovations in communication technology that have expanded the scope of global trade—and with particularly favourable conditions for importers, the demand for air freight is growing stronger.

2. Growing E-Commerce, Rising Technology and Growing Investment are Major Growth Drivers for Australia Transportation Market

Logistics Market in Australia

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The explosive growth of e-commerce in Australia is one of the key factors driving the expansion of the Australian transportation market. Since e-commerce contributes significantly to Australia’s GDP and the country has the 11th-largest e-commerce market in the world, it is constantly evolving. Additionally, businesses are placing more and more emphasis on enhancing IT and making technology investments. The emergence of big data, open data, and digital technology is also having an impact on Australia’s freight networks. To advance its logistics industry, the government has made investments in road development and repair since 2014. By 2026, the government also intends to invest in the construction of a freight railway linking Melbourne and Brisbane.

3. Australia Cold Chain Logistics faces many challenges like food wastage, increasing cost of compliance and expensive cold storage units.

Logistics Market in Australia

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In Australia, building a cold storage facility might cost up to twice as much as building a dry warehouse. Costlier upgrades include the installation of more machinery, insulation, airtight doors, and cooling systems. Additionally, operating costs for cold storage facilities are usually higher due to higher power consumption, with refrigeration accounting for more than 70% of total electricity demand. However, small and medium-sized businesses with less than a five-truck fleet dominate the Australian logistics industry.

It becomes more difficult for smaller, family-owned businesses to comply with the regulations as a result, which poses a problem. Companies will need to train employees and apply new compliance standards, which will add to their costs and burdens. Another significant issue in Australia is food waste, which is frequently a result of improper temperature control when moving or storing goods. The most wasted foods are mangoes, watermelons, cucumbers, cauliflower, and cabbage.

4. Digital freight brokers, infrastructure projects and fewer logistics/freight costs are expected to drive Australia Logistics Market in future.

Logistics Market in Australia

The majority of the Intermodal Freight Logistics Parks and other infrastructure developments are likely to benefit NSW and WA the most. In addition, digital freight brokers are predicted to grow in the market, resulting in a more organised business. Finally, as corporations consider containerized rail freight as an alternative to road transport in Australia, overall logistics/freight costs are likely to decrease in the future.

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