Navigating Australia's Freight Market: Current Pressures and Future Trends

Australia's freight and logistics industry is in one of its toughest periods in years, a downturn that began back in 2022 and shows no signs of letting up. Freight volumes are low, costs continue to rise, and despite early hopes of a rebound, the next 12 to 24 months are expected to remain challenging. But with the right strategy, strong visibility over the numbers and the right support around them, businesses can stay steady through the turbulence and even come out stronger when the market turns. 

Here is a breakdown of what's happening right now, what the industry is likely to face next, and what business leaders can do to navigate the downturn. 

What Is a Freight Recession? 

Before diving into where the market sits today, it helps to understand what we mean by a freight recession and why this one is particularly severe. 

A freight recession happens when there's a significant drop in the volume of goods being transported, combined with falling freight rates. Unlike a general economic recession that affects the entire economy, a freight recession specifically hits the transportation and logistics sector, though the impacts flow through to dependent industries like retail, manufacturing and agriculture. 

The current freight recession (often called the "Great Freight Recession") started in March 2022 and has become one of the longest downturns in modern trucking history. It was triggered by a perfect storm. During COVID-19, freight rates soared, stimulus money flowed, and financing was cheap. Carriers expanded aggressively, adding trucks and capacity to meet what seemed like endless demand from e-commerce and supply chain restocking. 

But when supply chains normalised and consumer spending shifted back from goods to services, demand collapsed. The industry was left with far too many trucks chasing far too few loads. This excess capacity has kept relentless downward pressure on freight rates ever since, creating an environment where even efficient operators struggle to stay profitable. 

This isn't just an Australian problem. In the United States, major carriers like the 99-year-old Yellow Corp have failed. Internationally, insolvencies are climbing across logistics sectors. Australia is facing the same structural challenge, and the numbers show it clearly. 

Where the Market Is Right Now 

Freight demand has dropped significantly and hasn't bounced back the way many expected. Volumes have softened, but the number of trucks on the road hasn't adjusted quickly enough. That imbalance means there is far more capacity in the market than freight to fill it, which keeps rates low and squeezes margins everywhere. 

Business failures are also climbing sharply. ASIC data shows insolvencies in Australia's transport, postal and warehousing sector jumped from 196 in 2021-2022 to 535 by April 2025, a 173% increase. The upward trend shows no signs of slowing. This isn't just a few struggling operators. It's a sign that the underlying economics of the industry are strained across the board. 

Costs are rising faster than revenue. Fuel, labour, insurance, maintenance and interest rates have all increased sharply, while freight rates haven't kept pace. Even the most efficient operators are feeling pressure. Layered on top of that are ongoing workforce shortages, widespread sham contracting that distorts the market, and an increasingly complex compliance landscape. All of which continue to weigh heavily on the sector. 

High-profile collapses like Scott's Refrigerated Logistics (Australia's largest cold transport operator), Austrans Container Services, and most recently Ron Crouch Transport (a 47-year-old family business) show that no one is immune. When well-established operators with decades of experience are entering administration, it's clear the challenges run deep. 

What the Next 12 to 24 Months Could Look Like 

The reality is that the next year or two will remain challenging for the freight sector. Freight demand may lift slightly if the economy improves, but oversupply will continue to drag down rates. The excess capacity built during the pandemic boom needs to leave the market before rates can recover meaningfully. Most experts expect at least another 12 to 18 months of sustained pressure before conditions improve. 

More business failures are likely, especially among operators with high debt levels or limited cash reserves. At the same time, consolidation will continue as stronger competitors absorb those exiting the market. Cashflow pressure will remain the primary threat, driven by lower rates, slower payments and rising operating costs. 

Regulatory enforcement is also expected to increase, particularly around sham contracting and workplace compliance. Operators relying heavily on contractor models will need to review their arrangements carefully to avoid unexpected liabilities. 

While recovery will eventually come, it will not be a sharp rebound. Excess capacity must leave the market, demand must strengthen, and structural issues must be addressed. All of which will take time. The freight recession likely has another 12 to 24 months to run before meaningful stabilisation occurs. 

What Business Leaders Can Do to Get Through It 

Getting through this period requires clearer visibility, tighter controls, and stronger support around the business. The freight recession has exposed weaknesses across the industry, and businesses that survive will be those that address their fundamentals now rather than waiting for conditions to improve. 

One of the most important steps is gaining total clarity over the numbers. This means consistently tracking cash flow, reviewing budget-to-actual performance, and running scenarios around changing fuel costs or fluctuating rates. When conditions are volatile and margins are razor-thin, having accurate data gives business leaders the confidence to make better decisions quickly. 

Strengthening the backend of the business is equally important. While owners and senior leadership focus on generating revenue, the business's operational and financial foundations must be solid. This includes everything from supplier management and compliance to contract reviews, pricing checks, and cost control. When the business engine room is running smoothly, leaders have the time to focus on customers and sales, which is where the business needs them most in times like these. 

This is also where corporate advisors can play a crucial role. Having experienced advisors around you isn't just helpful, it's a strategic advantage. A strong advisory team can carry the operational weight, monitor the numbers closely, and identify issues long before they become major problems. They can also support restructuring or refinancing when necessary and open their networks to help stabilise and strengthen the business. 

Contracts and pricing should also be reviewed closely. Small gaps or outdated terms can quickly turn into expensive issues in a tight market. Now is the time to revisit pricing structures, build in indexation where possible, clarify expectations with customers and ensure the business is not carrying unprofitable work without realising it. 

Maintaining strong relationships with key customers and suppliers will also help the business stay resilient. Many companies are anxious about the current environment, and proactive communication can make a significant difference in building trust and stability. In a freight recession where demand is weak, holding onto reliable customers and maintaining supplier goodwill becomes even more critic0al. 

Finally, leaders should remember that downturns also create opportunities. Well-positioned businesses may find attractive acquisition targets, favourable equipment deals, or new customers looking for reliable partners. Second-hand truck values have collapsed dramatically from their pandemic highs, creating potential opportunities for cashed-up operators. If the business is financially steady and supported by the right advisors, the next two years could present real openings for growth. 

Final Thoughts

The freight recession isn't finished, and the road ahead will be challenging. The structural imbalance between capacity and demand won't resolve quickly, and pressure on margins will persist. But businesses that stay close to their numbers, tighten their operations, lean on experienced advisors, and keep their focus on revenue and relationships will be far better placed to weather the next 12 to 24 months. 

With the right foundation, this period doesn't just have to be about surviving. It can also be the time when strong, disciplined businesses quietly position themselves for the turnaround to come.