Late same-day freight lifts costs as fuel surcharges rise

MachShip has published a report showing that 30 per cent of same-day deliveries in Australia arrive late. It also found that fuel surcharges have pushed freight costs higher across its network.

The report draws on more than 100 million consignments processed through a network of more than 500 carriers. It found that 27 per cent of next-day deliveries also miss service-level commitments, despite customers paying extra for faster services.

That means standard freight performs better than premium options on one key measure. According to the data, 19 per cent of standard deliveries fail to arrive on time, a lower rate than both same-day and next-day services.

The findings challenge the assumption that higher-priced express freight is the most dependable option. Instead, they point to a market where reliability has become less predictable as demand rises and networks come under strain.

Average same-day delivery times have increased 47 per cent over the past five years, rising from 2.5 hours to about 3.5 hours. Over the same period, non-premium delivery times have improved by about 16 hours, narrowing the gap between standard and express services.

Sam Rowse, Chief Executive Officer of MachShip, linked the shift to pressure across urban delivery networks. "Same-day delivery times have increased 47 per cent over the past five years. Carriers are under real pressure from urban congestion, driver availability and the sheer volume of demand - and that pressure is showing up in performance," Rowse said.

He said the relative position of lower-cost services had also changed. "What's happened in the meantime is that standard services have actually gotten faster. Non-premium delivery times have improved by around 16 hours over the same period. The speed gap between express and standard is narrowing, but the price gap isn't," he said.

Fuel pressure

The report also examined the effect of higher fuel charges on shipping prices. Across the network, carriers raised the typical fuel levy from 16.6 per cent to 29.8 per cent in under 30 days, translating to an 11.3 per cent increase in total freight costs.

That came after parcel pricing had eased by as much as 4 per cent across major capital city corridors over the previous 12 months. The increase in fuel-related charges therefore reversed much of the recent price relief for businesses moving goods every day.

Rowse described the speed of the cost increase. "The fuel levy applied by carriers across our network has effectively doubled in under a month," he said. "For businesses moving freight daily, that's translated to an 11 per cent increase in total shipping costs almost overnight. A full year of pricing improvement across the parcel market has been unwound in weeks."

Wider market

Beyond delivery speed, the report points to uneven conditions across the broader freight sector. National average carrier on-time performance, measured as DIFOT, stands at 78 per cent, up from 67.9 per cent in 2021, while top-tier operators are delivering results in the high 90s.

The data also shows that Australian businesses use an average of 5.4 freight carriers. This reflects the fragmented nature of the market and the need to manage a mix of providers across metro, regional and remote routes.

Pricing trends differ by freight type. Parcel prices have softened by 2 to 4 per cent across major capital city corridors, while full truckload pricing has increased by about 12 per cent year on year.

Brisbane stood out in the pallet market, where prices rose 7.8 per cent and demand increased 5.7 per cent at the same time. That pattern points to structural capacity constraints rather than a short-term market fluctuation.

Demand patterns

The report found that Friday is the busiest day for shipping, with dispatch activity peaking at 3pm. That concentration of orders towards the end of the week may be adding pressure to delivery networks already dealing with traffic, route complexity and variable demand.

For business customers, the issue is not simply speed but the consequences of missed delivery windows. In sectors that rely on timed drop-offs, delays can affect staffing, inventory planning and customer service.

Rowse addressed that point in comments on B2B operations. "In a B2B environment, most customers don't want fast, they want reliability. A missed same-day window creates downstream costs: rescheduled labour, missed delivery windows, customer complaints. The data supports a rethink of how businesses select freight services and how they manage their carrier mix for reliability, not just price," he said.

The report also said around 6.5 per cent of freight movements are currently managed by artificial intelligence systems, indicating that automation is beginning to play a larger role in the sector.