Warning entire industry critical for Australian economy on the brink of collapse

Thursday, 20 November 2025 13:33

One in 12 trucking companies have closed amid dire economic conditions.

Australian trucking companies are at breaking point, with one in 12 forced to close over past months, a new report warns.

The triply whammy of rising fuel and labour costs, stubbornly high interest rates and fierce competition has left many freight operators struggling to remain solvent, the research by CreditorWatch found.

Smaller and family-run carriers, many of which serve critical industries on regional and interstate routes, are particularly vulnerable because they lack the cash reserves or negotiating leverage of larger logistics companies.

The road transport industry is also facing other big headwinds.

A shortage of drivers is pushing up labour costs as a lack of younger drivers taking up the job leaves companies with an ageing workforce.

The price of second-hand trucks, which jumped during the pandemic, has now fallen dramatically by more than 60 per cent.

Added to these are volatile fuel prices, higher insurance premiums and rentals and the demands of environmental compliance.

CreditorWatch data shows the closure rate for road transport businesses during the past 12 months was 8.46 per cent, or one in 12 businesses.

This was an increase of 40 per cent year-on-year and a 26 per cent rise since this January.

The closure rate for transport companies has rocketed and now rivals that of the hospitality sector, traditionally one of Australia's most failure-prone industries.

There are some bright prospects for trucking firms, particularly in the mining and commodities sectors.

But the benefits are unlikely to compensate for the industry's current dire condition, according to CreditorWatch chief economist Ivan Colhoun.

"Elevated cost bases, stretched balance sheets, and soft freight demand from retail and manufacturing mean insolvency pressures are set to remain high through 2026," he said.

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