Why Your Groceries Cost More Than You Think
Next time you wince at the price of a punnet of raspberries or wedge of watermelon, don’t just blame the farmer or the supermarket. A significant – and largely invisible – chunk of what you pay at the checkout has nothing to do with growing or making your food. It’s the cost of moving it.
Freight is the silent passenger in every shopping trolley, and right now, it’s getting more expensive by the day.
From Farm Gate to Your Plate – The Price of Distance
Most Australians don’t think much about how far their food has travelled before it arrives on a shelf. But for the farmers, processors and distributors who move it, freight is one of the most significant costs they face.
On average, domestic freight accounts for around 8.75% of the price of Australian agricultural products. That might sound modest, but the story changes dramatically depending on what’s being moved and where it’s going.
Grains can carry freight costs of up to 27.5% of gross income. Fruit and vegetables sit around 21% – partly because they’re bulky and partly because they’re perishable, requiring expensive refrigerated transport throughout the entire cold chain.
For Australian exports, the range is even more stark: transport costs can represent anywhere from 4% to 48.5% of farmgate value, depending on the commodity and destination. At the high end, nearly half of what a product is worth at the farm is consumed just getting it onto a ship.
The Freight Bill Keeps Growing
Here’s where things get uncomfortable for household budgets.
The drivers pushing freight costs higher are not short-term blips. Fuel prices are the most immediate pressure. Fuel surcharges – the extra levies transport companies add when diesel prices spike – can escalate rapidly. For some remote growers, surcharges alone have reached up to 65% of the consignment value. That cost doesn’t disappear; it flows downstream, eventually landing, in part, on the consumer.
Remote and regional Australians already feel this acutely. The further food travels from a processing hub or distribution centre, the higher the freight bill. Those costs are baked into the retail price long before the product hits a regional supermarket shelf.
Then there’s the broader global picture. Australia doesn’t operate in a vacuum. International freight rates – affecting the imported goods and ingredients woven through our food supply – fluctuate with global events. During periods of disruption, transport costs for imports have averaged around 13.4% of value, but spikes can push well beyond that.
A War, a Fuel Crisis, and Your Weekly Shop
It would be convenient if the pressures on freight costs were purely local, but 2026 has made clear they are not.
Diesel in Australia has crossed $3 per litre and is showing no sign of retreating. The ongoing conflict involving Israel and the United States has created ripple effects through global energy markets and international shipping routes, disrupting supply chains that Australia depends on for both imports and the export of our own agricultural commodities. When global freight rates surge – as they did during the pandemic, and as they are doing again now – the costs filter through the entire supply chain.
Research shows that during major transport disruptions, supermarket prices can rise by over 7% as a direct result of freight cost increases alone. That’s on top of inflation already being felt across energy, labour and inputs like fertiliser.
The Cumulative Cost Nobody Talks About
When people talk about the cost of shipping food, they tend to focus on a single leg of the journey – say, from the farm to the processor. But food doesn’t make one trip. It makes many.
A piece of fruit might travel from an orchard to a packing shed, then to a cold storage facility, then to a distribution centre, then to a regional supermarket, and finally into your car. Each leg carries a freight cost. Each surcharge compounds. By the time a product reaches your trolley, the cumulative transport bill embedded in its price is far higher than any single-leg statistic suggests.
What This Means for You
There’s no easy fix to offer here. Fuel prices are set by global markets. Geopolitical instability doesn’t resolve on a convenient timeline. And Australia’s geography – vast, spread out, with remote communities genuinely far from food production hubs – means distance costs are structural, not accidental.
What you can do as a consumer is look closer to home. Locally grown produce, farmers’ markets, and community-supported agriculture schemes all reduce the freight component of food costs by shortening the supply chain. Buying in season, when local supply is abundant and doesn’t need to travel far, is another lever worth pulling.
The price of food is a story told in many chapters. Freight may not be the loudest, but right now, it’s one of the most consequential — and it’s only getting louder.
Photo credit: Laura Acevedo via Unsplash
