Author: Travis Roy, Owner/Director, 2SA - Fulfilment Specialists
2SA - Fulfilment Specialists is an APPA Service Provider Member
Global conflict rarely feels distant for long in the logistics industry. When war disrupts energy markets, the consequences ripple quickly through supply chains, freight pricing and ultimately the cost of everyday goods. The current conflict involving the United States, Israel and Iran is a prime example of how geopolitical events can directly affect freight and fulfilment operations here in Australia.
With crude oil prices reaching above US$100 a barrel, for countries like Australia that rely heavily on imported fuel, these global price shocks flow rapidly into local diesel and petrol costs.
Freight logistics is one of the most fuel-intensive sectors of the economy. Diesel powers trucks, shipping vessels, air cargo and much of the equipment used in warehousing.
In Australia in particular, road transport dominates the movement of goods. Trucks carry the majority of freight across the country’s vast distances and consume more than half of the nation’s diesel supply.
Fuel also represents a large portion of operating costs for freight carriers. Industry estimates suggest diesel can account for 20–30% of total road freight operating expenses.
This means even relatively small fuel price increases can significantly raise the cost of transporting goods.
When fuel prices spike, the impact flows through the supply chain in stages.
Transport operators are usually the first to feel the pressure. Rising diesel costs can quickly erode already thin margins.
Most carriers respond by introducing fuel surcharges, which are added as a percentage of the base freight rate to recover increased fuel costs. These fuel surcharges are already climbing, with regular monthly updates being cut to weekly updates to cater for such uncertainties.
Australia Post has always been a guiding light to the true cost of fuel increases, and as their latest update has proven, there is a 250% increase for the latter half of APRIL 2026!In Australia, transport operators are already warning customers to prepare for higher freight rates as diesel prices climb.
3PL providers sit between transport carriers and brands. When freight rates increase, those costs inevitably affect the cost of fulfilment operations.Higher transport costs can affect:
3PL providers must either absorb these costs temporarily or pass them through to clients via revised freight rates or fuel surcharges.
Suppliers that produce goods face cost increases not only in transport but often in raw materials and energy. War-driven energy price shocks can increase the cost of manufacturing, packaging and global shipping. The result is upward pressure on wholesale pricing as suppliers attempt to maintain margins.
Brands working with agencies and logistics providers must then decide how to respond. They may:
In industries like FMCG and retail marketing, fulfilment and logistics can be a substantial component of campaign cost structures.
Ultimately, higher logistics costs tend to filter down to consumers.
Economists often summarise the relationship simply:
When fuel becomes more expensive, freight becomes more expensive — and when freight becomes more expensive, the price of goods rises.
Higher logistics costs can therefore contribute to broader inflation pressures across the economy.
Australia’s geography amplifies the effect of fuel price shocks. Long transport distances and heavy reliance on road freight mean the cost of diesel plays a significant role in the price of moving goods across all industries.
For logistics providers and their clients, this means the coming months may involve:
Global conflicts that disrupt energy markets can have lasting economic consequences. Analysts warn the current war could increase inflation and slow economic growth if energy disruptions continue.
For businesses operating in supply chain and logistics, volatility in fuel prices is likely to remain one of the most significant operational risks.
This supply chain pressure highlights the importance of strong logistical planning. Businesses that respond proactively can often soften the impact of rising freight costs.
Some practical strategies include:
Businesses that prioritise efficiency, planning and strong logistics partnerships are often better positioned to navigate periods of economic volatility.
For suppliers, agencies, fulfilment providers and brands alike, the lesson is clear: Events thousands of kilometres away can quickly translate into real changes in freight pricing and supply chain economics.
While businesses cannot control geopolitical events, they can manage how they respond—through flexible logistics strategies, transparent freight pricing structures, and strong partnerships across the supply chain.
In periods of global uncertainty, resilient fulfilment and logistics networks become more important than ever.
