Road freight service price

IBISWorld forecasts the road freight service price index to average 136.0 index points in 2025-26, up 1.3 % from the prior year. A principal driver remains retail diesel prices. According to the latest ACCC petroleum monitoring report, the average retail diesel price across Australia's five largest cities was 181.9 cents per litre in 2024-25, representing a decline of about 9 % year on year. This decline was largely driven by softer international refined diesel (Gasoil 10 ppm) pricing, as supply conditions improved and global demand cooled. Despite that easing, diesel prices remain significantly above pre-pandemic levels, placing a structurally elevated cost floor for freight operators. While fuel cost inflation is moderating, downwards pressure on cost inputs remains limited.

Over the 2021-22 and 2022-23 periods, road freight prices escalated rapidly as elevated crude oil costs and record domestic freight volumes prompted operators to pass on higher expenses to customers. While diesel price growth has since moderated, labour shortages, rising insurance premiums and infrastructure access costs have continued reinforcing elevated service charges. The industry's limited exposure to substitute transport modes, particularly in last-mile delivery and time-sensitive freight, has allowed operators to maintain pricing power despite some easing in input cost growth.

Growth in freight volumes has also reinforced the upwards trajectory in service prices. Household consumption expenditure and international merchandise trade have both expanded over the past five years, supporting higher freight throughput across the domestic network. The structural rise in online shopping, which accelerated during the pandemic and remains embedded in retail behaviour, has particularly strengthened demand for parcel and short-haul freight services. Meanwhile, continued demand for Australian agricultural and mining exports has sustained high levels of export-related freight activity, despite recent volatility in commodity prices. Collectively, these factors have contributed to a persistently high pricing environment, with freight operators balancing moderating fuel costs against enduring demand for delivery capacity. Overall, IBISWorld estimates that the road freight service price index will increase at a compound annual rate of 3.8% over the five years through 2025-26, reflecting the combined effect of elevated input costs, strong consumer demand and the industry's ability to pass through cost inflation to clients.