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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

In general the industry has:​

  • High degree of competition

  • Low margins

  • Capital cost intensive

  • Medium level of regulation

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.

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.

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.

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.

Key Industry Statistics

According to IBISWorld, key statistics for the industries include:


We have collated industry performance statistics based on ABS data and detailed them in a whitepaper, which can be downloaded from the link below.

What Makes a Business Highly Valuable?

SME Performance Whitepaper

Key Drivers of Transport Business Valuations

A transport business valuation is driven by key factors below such as: 

  • Size and age of fleet

  • Level of ongoing clients and long term client agreements

  • Diversity of client base

  • Additional customer services such as warehousing and door-door courier services

  • Use of technology for delivery scheduling, truck and driver monitoring, automated reporting and integration with key management functions.

  • Certification to relevant quality, OH&S and regulatory standards.

EBITDA Margins are very low and range from less than 4% to 15% (for some large operators), depending on the size of the business, industry competition, technology and automation and productivity.

EBITDA Multiples for most transport businesses will remain low, and will be heavily influenced by size and scale.  Typical EBITDA Multiple ranges we have observed are:

  • Revenue of $1m - $10m: 0.5x - 2.5x

  • Revenue of $10m - $20m: 2.0x - 4.0x

  • Revenue greater than $20m: 4.0x - 5.0x

Our Business Valuation Experience

Our transport business valuation experience has included including business valuations for:

  • Multiple local and intrastate road transport businesses based in Melbourne and Sydney

  • Merger of two interstate road and warehouse businesses

  • Specialist road freight and warehouse business in the fashion sector

  • Multiple freight forwarding businesses

  • Multiple taxi business valuations and point to point car hire businesses

  • Melbourne courier business valuation

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