Mounting financial pressure is pushing more Australian transport and logistics operators to the brink, as insolvencies in the sector accelerate, says a leading business recovery and insolvency firm.
Jirsch Sutherland said a combination of rising costs, labour shortages, regulatory burdens and falling asset values is driving more businesses to restructure or wind down.
The latest ASIC data reveals a sharp upward trend in insolvencies within Australia’s transport, postal and warehousing sector. They rose from 196 in 2021-2022 to 347 in 2022-2023, and 495 in 2023-2024 – a 153 per cent increase in just two years.
As of April 6 this year, 535 insolvencies had already been recorded, representing a 173 per cent increase compared to 2021-2022 and putting the industry on track for another record year.
Jimmy Trpcevski, Managing Partner of WA Insolvency Solutions (Jirsch Sutherland’s WA division), said the firm has seen a marked increase in insolvency appointments and inquiries from transport operators.
“Businesses are being squeezed from every direction — whether it’s rising operating costs, labour shortages, or compliance pressures. Margins are incredibly thin, and many operators simply can’t absorb the extra costs,” Trpcevski said.
Falling asset values have added to the strain. Ian Hyman, CEO of Hymans Valuers and Auctioneers, said the second-hand truck market has flipped since the pandemic, with some values dropping by as much as 70 per cent.
“Long-haul operators are doing it particularly tough,” Hyman said.
“They have massive investments in equipment and huge ongoing costs, and with interest rates still high, their repayments remain burdensome.”
Hyman also highlights the impact of regulation and compliance.
“Government regulation is getting worse: industry collective bargaining, unrestrained union behaviour, abolition of employee restraint clauses and a myriad of other government-related controls create roadblocks to efficient and well managed operations. It’s all going to make life even harder,” he said.
“These are unprecedented times. I think we’ll see further increases in insolvencies for another couple of years at least.”
Despite the pressures, Trpcevski said there are options available for viable businesses.
“The Small Business Restructuring [SBR] and Voluntary Administration [VA] regimes are providing much-needed lifelines for operators looking to reset and recover,” he said.
“SBR has been a game-changer for eligible small businesses. For those that don’t qualify, VA can provide a path forward – a chance to take control and avoid liquidation. It’s not about shutting the doors, it’s about steering through the crisis.
Jirsch Sutherland is currently handling the liquidation of a national transport and logistics business that grew rapidly but struggled with cash flow as trading costs rose.
“The company had expanded quickly to meet demand but didn’t have the working capital to manage the increased overheads. By the time we were appointed, it had already ceased trading,” explained Andrew Mattinson, Principal with Jirsch Sutherland.
“That kind of imbalance in the transport sector can be like trying to accelerate uphill in top gear – you’ll stall if the engine doesn’t have the torque to match.”
The team coordinated the wind-down of the business, which had over 100 prime movers and trailers located across multiple states.
“It was like coordinating a recovery mission across a multi-state depot network,” Mattinson said.
“However, thanks to the director’s, asset financiers’ and auctioneers’ cooperation and clear records, we were able to recover the assets efficiently and have ensured creditors are in the best position they can be, given the company’s circumstances.”
Mattinson said that while not all transport companies are at risk, pressure points are building across the sector.
“Some businesses are well prepared and are actively reviewing costs, safety regulations, debt levels, and contract structures – but others are leaving it too late. That’s why early advice is critical – before the brakes fail entirely.”
Remove Govt, problem solved!