How is a trucking or transport company valued?

Why isn't a transport company worth its trucks plus a multiple?

Because that would count the same value twice. The prime movers, trailers and rigids are what produce the freight income, so a value based on that income already includes them. Finance owing on the fleet, including balloon payments, is deducted.

The trucks matter in two other ways. First, they wear out on a cycle measured in kilometres and engine hours, so earnings are measured after the spending needed to keep the fleet roadworthy and competitive, not before it. A carrier that has stretched its replacement cycle can show strong EBITDA while running the fleet down. Second, if the business earns too little to justify its fleet, what the vehicles would fetch in an orderly sale can set the floor.

What does a valuer look at in a trucking business?

• The fleet register. Every unit by year, kilometres, ownership, finance and payout, which shows when replacement spending falls due.
• Freight by customer and lane. How much is contracted or dedicated work and how much is spot freight through brokers and freight exchanges.
• Cost recovery. Whether a fuel levy moves with the published diesel price and whether rates are reviewed each year for wages, tyres, tolls and insurance.
• Drivers. The mix of employed drivers, owner-drivers and subcontract carriers, turnover, and how pay compares with the market.
• The depot. Lease term, truck access and whether the yard could be replaced if the lease ended.

How does compliance affect the value?

Under the Chain of Responsibility provisions of the Heavy Vehicle National Law, responsibility for heavy vehicle safety extends beyond the driver to the business that employs the driver or operates the vehicle, and its executives must exercise due diligence. The law does not apply in Western Australia or the Northern Territory, although it applies to vehicles from those places when they travel into a state or territory where it does apply.

A buyer's due diligence will ask for fatigue records, maintenance records, mass and loading procedures, audit results and any regulator notices. Gaps rarely change the earnings directly, but they shape the warranties and indemnities a buyer asks for and the price it is willing to pay. Documented systems and clean audits make a carrier easier to sell.

How do I get a formal valuation of a transport business?

Our transport and logistics business valuation page covers fleet finance, fuel tax credits and owner-driver rules in more depth, and the guide to valuing a logistics business compares carriers, dedicated fleets and forwarders. For a formal figure, request a quote; fees are fixed by turnover and shown on our pricing page.