Corporate turnaround, Industry Specific

What does higher costs mean for the Transport & Logistics sector?

Wages and fuel are the two largest costs for transport and logistics operators.

The current rate of wage inflation in WA is less than general inflation which means that the cost of labor is falling in real terms.

But of course, that is only one part of the picture.  Fuel cost is the other side of the cost equation for transport operators and it is not influenced by local economic performance.  The wholesale price for diesel in WA has been increasing steadily for the last 12 months and the experienced operators know that customers are reluctant to bear the full burden of fuel surcharges.

In general, the two major cost groups for transport operators are rising.

That presents a worrying picture for the short term future of the transport & logistics industry in WA, but there is more complexity to consider and that there is significant opportunity to be seized from the current situation.

For our comprehensive views on the challenges and opportunities facing the industry, download our 2018 Industry Report here.