Transport Business Valuation Issues

The transport and logistics industry is very broad and includes a large number of sub-sectors such as:

• Road transport - intrastate

• Road transport - interstate

• Freight forwarding

• Rail, Sea and Air freight

• Warehousing

• Postal and courier services

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In general the industry has:​

• High degree of competition

• Low margins

• Capital cost intensive

• Medium level of regulation

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Whilst the industry has seen significant growth from trends such as an increasing national freight load, increasing import demand and online purchases driving parcel freight and courier demand, the industry has grown with new players and kept margins at low levels.

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A transport business valuation often is governed by the net tangible asset value of the business, with a small component of goodwill where thre is evidence of size, long term customer arrangements, "stickability of customer contracts" and truck and driver management systems in place.

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Future changes in infrastructure projects, road safety regulations, costs of fuel, and driver-less technology will influence profitability, growth and merger and acquisition opportunities in the near term.

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Most transport business valuations will attract low EBITDA multiples where customer agreements, size and scale and technology and systems will give some operators a higher business valuation than competitors.

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