France’s logistics industry declines

The latest version of the Freight Transport and Logistics Barometer, prepared by the Union of French Transportation and Logistics Companies (TLF), has been released.

The findings from the report underscore the numerous challenges faced by the French logistics industry, from road freight contraction to rail disruptions, a declining inland shipping sector, and a significant slowdown in storage and warehousing activities.

The French road transport industry experienced a 4.7% year-on-year decline in transportation volumes in Q2 2023. There was a 6.4% decline compared to the previous quarter, which entailed a reduction in staff and resulted in the loss of 4,300 employees in Q2 alone (down 1%). Bankruptcies within the sector also increased 20% year-on-year. Unfortunately, according to the report, the situation will not improve by the end of this year.

Rail transportation faced major disruptions in the first quarter, primarily due to strikes against pension reform. Despite the modest 11% recovery in the second quarter compared to the previous quarter, rail transportation remains 18% below the prior year.

In the first half of 2023, the decline in inland shipping activity reached 14% year-on-year.

In the cargo shipping segment, a combination of global demand and excess capacity of shipping companies keeps freight rates relatively low. The French sea ports experienced a recovery in the second quarter after a difficult first quarter marked by strikes against pension reform. The recovery was primarily due to the revival of imports, especially in the hydrocarbons and automobile trade sectors. Nevertheless, the container activity remained weak, with a 0.7% decline in Q2 compared to Q1; year-on-year, there was a significant drop of 12.7%.

The air transportation industry is showing signs of a slow but steady recovery. Notably, airfares in France declined significantly in Q2 2023, dropping 26% year-on-year.