Breaking point: the bumpy road to insolvency for Australia’s transport sector

Post-pandemic, the transport and logistics sector is grappling with rising costs, regulatory pressures, and falling asset prices. As businesses struggle to meet financial demands, insolvencies are rising – and more are expected. However, for some, the Small Business Restructuring regime offers a light at the end of the tunnel.

Once a pandemic-era success story, the transport and logistics industry is now under pressure in Australia and globally. Data shows that insolvencies in the industry are accelerating, with a challenging outlook ahead. 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 – an increase of over 150 per cent in just two years. As of April 6 this year, 535 insolvencies had already been recorded, representing a 173 per cent increase compared to 201-22 and putting the industry on track for another record year.

Jimmy Trpcevski, Managing Partner of WA Insolvency Solutions (Jirsch Sutherland’s WA division), notes that the firm is seeing an increase in transport-related insolvency appointments and inquiries, with the trend expected to continue.

“The sector is under enormous pressure,” he says. “Operators are grappling with rising costs, driver and general labour shortages, growing compliance demands, and razor-thin margins – while lacking the bargaining power to pass costs on. For many small and mid-sized businesses, the combination of operational and financial strain is becoming unsustainable, fuelling a rise in insolvencies and restructures. We expect this trend to continue as the market adjusts.”

Several large well-known transport operators have collapsed in recent years as well as many mid-market and smaller operators, highlighting the sector’s growing strain. In Australia, Scott’s Refrigerated Logistics folded in 2023, followed by Austrans Container Services in 2024, and Arva Logistics in 2025. Lion Global Forwarding also collapsed, leaving hundreds of containers stranded. Internationally, US-based Kal Freight filed for Chapter 11 bankruptcy in early 2025, while legacy carrier Yellow Corp shut down in 2024 after nearly 100 years in operation. Additionally, UK delivery firm Magway went into liquidation.

When the wheels come off asset values

Ian Hyman OAM, Chartered Accountant and CEO of Hymans Valuers and Auctioneers, says the dramatic drop in asset values, particularly in the second-hand truck market, is a significant challenge. “During COVID, there were major supply chain issues and delays of more than two years for new trucks,” he says. “That drove second-hand prices up 50 to 60 per cent. There wasn’t much insolvency during this period.”

However, with supply chains now mostly normalised, Hyman notes that the situation has flipped. “Truck prices have fallen sharply, especially for older assets, with some dropping as much as 70 per cent. Companies are grappling with high insurance rates, high rents and soaring fuel bills, and they’re finding it hard to secure yards and storage facilities. Everything is working against them. They just can’t seem to recover enough to make money,” he says. “Long-haul operators are doing it particularly tough. 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, the right to disconnect, 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 says. “We’re in unprecedented times. I think we’ll see further increases in insolvencies for another couple of years at least. The economics are no longer stacking up. The cost of getting goods to where they need to go has become unsustainable.”

He points to the changes to the instant asset write-off as another factor in the downturn in the transport and logistics sector. “When the more generous write-off regime was scaled back in July 2022, there was a huge rush to purchase equipment before the deadline. Once the changes took effect, we saw a 20 to 40 per cent devaluation in transport and earthmoving equipment. A further marked fall in values occurred in the first quarter of 2023.”

SBRs and VAs a lifeline for transport operators

Despite the myriad challenges, Hyman says some initiatives are helping smaller operators stay afloat. “The Small Business Restructuring (SBR) regime has been an outstanding policy development,” Hyman says. “It’s a way for small businesses to restructure quickly and cost effectively whilst hopefully emerging with a better business strategy.”

Trpcevski agrees, noting that the regime has been a godsend for many small businesses. He points out that Voluntary Administration (VA) is another valuable rescue option, particularly for transport and logistics companies not eligible for SBR. “For those businesses that don’t meet the SBR criteria, VA offers a structured pathway to get back on track,” he explains. “It’s like putting the brakes on a runaway truck; it gives directors the opportunity to take control, restructure, and steer the business toward a more positive outcome, rather than heading straight for liquidation.”