Transport and logistics business valuation

Why EBITDA flatters a transport business

EBITDA leaves out depreciation, and in transport depreciation is a real cost. A prime mover has a working life measured in kilometres; trailers, tyres and refrigeration units have their own cycles. A carrier that has not replaced trucks for five years can show strong EBITDA while quietly running down the fleet. The next owner pays for that.

So we value on earnings after a realistic level of sustaining capex, or on EBIT where depreciation is a fair proxy for it. We also check how leases are accounted for. Under AASB 16 most leases now sit on the balance sheet and their cost is shown as depreciation and interest, below EBITDA. A carrier that leases its fleet can report higher EBITDA than an identical one that rents on short terms. We put both on the same footing before comparing anything. See EBITDA vs EBIT in industrial valuations.

Every truck that was not replaced on time is a purchase the next owner has to make.

Fleet: age, kilometres, finance and replacement

We start with the fleet register: every unit, its year, kilometres or engine hours, ownership, finance and the payout figure. From that we can see the average age by class, when units fall due for replacement, and how lumpy that spend will be.

Owning trucks does not, by itself, add value on top of earnings. If the earnings depend on the fleet, the fleet is part of what produces them. Where the business earns less than its fleet would fetch, the asset value can set a floor. A formal plant and vehicle valuation is a separate discipline; where one exists we can use it. More in how plant and equipment affects business value.

Contract freight, spot work and the customer list

The quality of freight revenue varies more in transport than in most industries. A dedicated contract to run a manufacturer's outbound distribution, with agreed rates, annual review and a fuel levy, is a very different asset from loads taken through brokers and freight exchanges at whatever the market pays that week.

We split revenue by customer, by lane and by contract status, then read the agreements. We look at term remaining, retender timing, key performance indicators and any abatement regime, termination rights and change of control clauses. Many transport relationships run for years on a handshake and a rate schedule. That history counts, but it is not the same as a contract, and a buyer will treat it accordingly.

Concentration needs particular care. A carrier doing most of its work for one retailer's distribution centre, or one quarry, is exposed to that customer's decision to tender, to bring transport in house, or to consolidate carriers. See how customer concentration affects business value.

Does the business recover fuel and cost increases?

Fuel, wages, tyres, tolls, registration and insurance all move. The question is whether the carrier's rates move with them. A fuel levy indexed monthly to a published diesel price passes most of the fuel risk to the customer, with a short lag. Rates fixed for the term of a contract, without a levy or an annual review, leave the carrier carrying it all. We compare margin over several years against fuel prices and award wage increases to see which kind of business this is.

Fuel tax credits also need checking. A business can claim them for fuel used in heavy vehicles over 4.5 tonnes gross vehicle mass travelling on public roads, at a rate reduced by the road user charge, which changes from time to time. Fuel for auxiliary equipment such as a refrigeration unit is not reduced by the road user charge. Credits are a real part of earnings, so we check that the claims are correct and will continue on the same basis for a new owner. An under-claim is upside; an over-claim is a liability.

Employed drivers, owner-drivers and subcontract carriers

Owner-drivers and subcontract carriers turn fleet capex into a variable cost, which can make a business lighter and more flexible. They also bring obligations that have grown in recent years, and a buyer will test them.

• Under the Fair Work Act 2009 (Cth), the Fair Work Commission can make minimum standards orders and road transport contractual chain orders covering regulated road transport contractors. Those orders can set pay and conditions for owner-drivers.
• Regulated road transport contractors who have worked regularly for a business for at least six months, counted from 26 August 2024, and earn under the contractor high income threshold, can seek a remedy for unfair termination.
• In Victoria, the Owner Drivers and Forestry Contractors Act 2005 (Vic) requires a written contract, an information booklet and a rates and costs schedule for owner-drivers engaged for 30 days or more.
• Employed drivers are generally covered by the Road Transport and Distribution Award or the Road Transport (Long Distance Operations) Award, unless an enterprise agreement applies, so annual wage review decisions flow straight into cost.

We look at how the drivers are engaged, how long they have stayed, what they are paid against market, and whether any arrangement looks like employment dressed as contracting. Driver turnover is a cost in its own right: recruitment, induction, damage and lost productivity. A stable, well-paid driver group is part of what a buyer is paying for.

Chain of Responsibility: a compliance system a buyer will test

Under the Heavy Vehicle National Law, everyone in the chain shares responsibility for heavy vehicle safety, not just the driver. Employers, prime contractors, operators, schedulers, consignors, consignees, packers, loading managers, loaders and unloaders each have a primary duty to ensure the safety of their transport activities so far as is reasonably practicable. Executives have a separate duty to exercise due diligence, and the duty cannot be contracted away.

The law applies in every state and territory except Western Australia and the Northern Territory, and it still applies to WA and NT vehicles when they cross into a participating jurisdiction. It changed on 1 August 2026, including a new Heavy Vehicle Accreditation scheme; operators already in the old national accreditation scheme continue under it until their accreditation expires. If the business relies on accreditation for mass, maintenance or fatigue arrangements, we check where it sits in that transition.

The owner who books the freight, and the depot

In many family carriers the owner is still the dispatcher, the rate setter and the person every customer rings. That is owner dependency, and it is a discount unless there is a manager or allocator who already does the job. We also normalise the owner's pay to what it would cost to employ someone to do the work, and family members on the payroll to their actual roles.

Depots and yards are often owned by a related trust and rented to the business. We value the business on a market rent, whatever is actually paid, and treat the property as a separate asset. Lease term matters too: a carrier with a year left on a yard it cannot easily replace, given zoning, truck access and neighbours, carries a site risk a buyer will price.

Which valuation method fits a carrier?

Most established carriers are valued by capitalising maintainable earnings after sustaining capex, cross-checked against the net value of the fleet and other assets. Where one contract with a known end date dominates, a discounted cash flow over that contract can be the better primary method. Our general approach is set out in how we value industrial businesses, and our guide to valuing a logistics business goes further into the method.

Fees are fixed by turnover and confirmed in writing before we start. See pricing or get a quote. If you are selling, read our business sale valuation page; if you are buying a carrier, see acquisition valuations.