The freight transport market - France

1.2 The European market benefits from globalization

In ****, road freight traffic will be dominated (***) by five countries: Germany, France, Spain, Italy and Poland. Poland leads the way with a **.*% market share, while France is in fourth place, according to L'antenne, with a *% share.

Distribution of freight transport sales by mode of transport European Union, ****, in billions of euros Source: ****

The freight transport sector is closely linked to the growth of trade between countries, and therefore to globalization. Economic uncertainties linked to the economic war between China and the United States have led to a decline in trade[***].

On the whole, goods are traded by large companies. As maritime transport is more capital-intensive, only a few companies, such as Maersk, dominate the market[***].

Overland freight transport is generally more fragmented, with the exception of rail transport, which is often dominated by the national railway company (***).

1.3 A fast-growing national market

It is possible to estimate the size of the freight transport market at around *** billion euros for the year **** according to Transport Achat, which uses figures from the French Ministry of Ecological Transition for ****.

The sector's growth is relatively sustained, exceeding *.*% on average every year since ****.

In France, most goods are transported by road. Rail and river freight will account for only **% of the volume of goods transported in ****. Air transport accounts for *% of goods transported, but **% of the total value, according to Transport Achat.

All in all, the freight transport sector in France employs *.* million people and accounts for **% of national GDP. by ****, the road haulage market is expected to grow by +*%.

Breakdown of goods transported by mode of transport France, ****, % of total Source: ****

1.4 The effects of Covid-19 on the freight transport market

The graph below was produced using data from NAF code **.** - "Road freight transport" .

Road freight transport sales index France, ****-****, Base *** in **** Source: ****

We note a decline in road freight transport activity overall, most likely due to the Covid-** pandemic. When comparing the month of May **** with that of ****, we note a difference in sales index of **.* (***). To a lesser extent, this observation also extends to the months preceding May, as well as to subsequent months up to September.

According to transport and supply chain consultancy BP*R, "the coronavirus has caused a collapse in transport volumes". In their survey of freight forwarding companies in ****, **% of service providers said "no" to their ability to meet the volume targets initially set, compared with **% at this time last year. Confinements and the closure of numerous stores have caused some disruption in the supply chain, particularly for BtoB transport. [***]

conversely, in ****, a positive return to activity has been felt for freight transport companies. According to Xavier Villetard, Associate Director of BP*R, "not everything is back to nominal levels, but we're not far off, and the trajectory looks good". For example, for XPO logistics, the company's logistics activity is equal to, or even ...

2.1 Demand by type of goods transported

In ****, domestic freight transport accounted for *** billion tonne-kilometres (***), a unit of measurement corresponding to the transport of one tonne over a distance of one kilometer. Foreign-flagged road haulage accounts for around **% of this total. [***]

In terms of goods, manufactured products are the most frequently transported in France. They account for around a third of total transport.

Domestic land transport by type of goods France, ****, billion tonne-kilometres Source: ****

Intercity freight transport by professionals is the most frequent (***), demonstrating the importance of road freight companies in enabling businesses and construction companies to move products or equipment from one place to another.

2.2 Local delivery is changing

The freight transport sector has evolved in recent years, notably with the rise of local delivery services, whose sales have increased by **.*% between **** and **** (***)

Sales indices for road freight transport France, **** - ****, base *** in **** Source: ****

Last-mile logistics have undergone many changes, with the multiplication of home delivery services and the rise of Internet shopping.

LSA Conso notes, for example, via a report produced by DHL, that retailers are tending to favor proximity, placing their warehouses closer to towns than before. This delivery flexibility is also reflected in the development of click and collect, which enables consumers to pick up parcels ordered directly in store.

Food retailers are also building up a home delivery offer, via integrated delivery services or via applications (***). Intermarché Express, for example, has a delivery service staffed by K-Ryole employees. Another part of deliveries is outsourced to Hoopla, a home delivery service[***].

2.3 The growth of e-commerce

E-commerce represents themost active demand segment today. The business model of these digital companies is based on shipping parcels to consumers, with products stored in large warehouses. The health crisis has played a major role in the explosion of e-commerce. [***]

With average annual growth of **.*%, e-commerce players should continue to benefit from the sector's growth. Parcel delivery services, which generally act as intermediaries between e-commerce sites and consumers, will see their delivery demands explode in the coming years. [***]

Global sales are expected to grow by +**.*% between **** and ****, to reach $*** billion.

evolution of e-commerce sales France, **** - ****, € billion CAGR: +**.*% Source: ****

Local delivery can take several forms:

Direct home delivery; Click and collect; Locker delivery .

3.1 Road haulage still dominates

In ****, road haulage under French and foreign flag in France remains largely dominant compared to other means of transport. Some *** billion tonne-kilometres (***).

French-flagged road freight transport France, **** - ****, billion tonne-kilometers Source: ****

Despite a decline in activity in terms of tonne-kilometres, the road freight sector is nevertheless experiencing relatively significant sales growth.

Between **** and ****, road freight sales rose by around **.*%, and more specifically by :

**.*% for intercity freight ; **.*% for local freight (***).

Sales indices for road freight transport France, **** - ****, base *** in **** Source: ****

3.2 Other modes of freight transport are experiencing difficulties

The transport of goods by river and rail represents only *% of the total volume of goods transported in France[***].

Even before the health crisis, the number of tons moving through French ports was declining (***).

evolution of French port activity France, **** - ****, thousands of tonnes Source: ****

This is corroborated by the fact that in **** (***), the traffic of several French ports is on the rise:

French ports with rising traffic France, ****, in Source: ****

Tonnage transported by rail freight companies has also fallen by more than **.*% between **** and ****, showing, once again, a certain fragility in the sector[***].

The rail freight sector retains significant international contact, since a third of activity is linked to border countries (***).

Despite a sharp rise in activity between **** and **** for rail freight transport, the sector has since experienced some difficulties, notably due to profitability issues, as demonstrated by the difficulties of the Perpignan-Rungis primeur train[***].

To revive this mode of freight transport, the government has earmarked ** million euros to make rail tolls free between July and December ****. As a result, this mode of transport seems to have taken off again, as evidenced by the significant rise in the rail transport sales index, which averaged ***.* over the July-December **** period, compared with ...

3.3 A competitive but highly concentrated sector

Transport companies

The freight transport sector is highly competitive, since almost all the companies operating in the sector are micro-businesses. In contrast, more than three-quarters of sales were generated by large companies and ETIs in **** (***)[***].

Some *,*** companies, organized as a grouping of several legal units, generate over **% of the sector's sales.

Distribution of transport company sales by size France, ****, % Source: ****

Road freight transport companies

Source: ****

To produce this map above we have added together the number of companies in NAF code **.**A - "Interurban road freight transport" - and NAF code **.**B - "Local road freight transport" -. The region with the most companies in **** was the Île-de-France region , with *,*** companies, or **.**% of the total number of companies. It was followed by the Auvergne-Rhône-Alpes region with *,*** companies. The Hauts-de-France region completed the podium with *,*** companies.

Costs and margins for road haulage companies

This fierce competition between companies is reinforced by the high costs associated with the road haulage business. The margin rate in road haulage is just **.*%.

Approximately half of the sector's sales are spent on external expenses, a third of which are subcontracting costs, demonstrating the interdependence of companies (***).

All in all, fuel accounts for only **% of the external ...

3.4 Real-time transport monitoring, a new competitive market segment

Strong market competition and high external costs make customer loyalty a key competitive challenge. In addition to customer commitment, quality customer care significantly reduces after-sales service costs for companies in this market. In this context, real-time transport data collection has become a competitive advantage. A number of start-ups have specialized in this field, and have rapidly established themselves. In France, these include

Boxia launched in ****, offers a subscription-based service starting at ** euros a month; Kronos Care created in ****, Kronos Care is based in Paris at the LVMH gas pedal. In January ****, Kronos Care was acquired by California-based Narvar, which specializes in online customer relations[***] ; WelcomeTrack formerly Vigicolis (***); Vigicolis became WelcomeTrack to support the company's shift towards customer relations, and the launch of the solution on the European market[***] ; ITinSell founded in ****, ITinSell raised * million euros in **** from Bpi France to accelerate its technological investments and international development[***] ; Shippeo : After two rounds of funding of * and then ** million euros respectively, Shippeo raises ** million euros in February **** in a Series B financing round by NGP Capital and ETF Partners. Shippeo has also recruited *** new employees to support its growth[***].

Digitizing tracking and tracing goods in real time not only meets strategic health and ...

4.1 Products and/or services

It is possible to distinguish the offer of road haulage companies, which account for some **% of freight transport activity in France, from the rest of the companies.

The road hauliers' offer can be focused on two aspects:

Local land transport; Intercity transport (***).

Source: ****

Some trucks can be adapted to carry specific loads, such as containers and refrigerated trucks used to maintain the cold chain in the food industry.

Trucks can carry pallets, containers or other types of cargo, generally providing a full service to customers, who can be delivered directly to their town or warehouse.

One of the special features of intercity ground transport is the possibility of offering customers different load levels (***). This enables the company to maximize the volume transported from one city to another, combining the requests of several customers if necessary.

With globalization and the ecological imperative, road freight transport is no longer the only method employed. Rail, air and river transport have managed to gain a modest foothold, despite certain difficulties.

With almost **,*** kilometers of navigable waterways (***), France is enabling river transport to make headway and deliver products to cities.

Air transport continues to be used for fragile and/or high-value-added products, as it is very ...

4.2 Road transport costs continue to rise

The price of transporting goods generally depends on the volume and weight of the goods, the distance of the journey, and the mode of transport used (***).

Despite the difference in prices between the various players in the sector, it is possible to determine that recent years have seen an increase in the cost of road haulage, mainly for intercity freight. The graph shows that, since the health crisis, all production price indices have risen by between **% and **% compared with ****.

Producer price indices for road freight transport France, **** - ****, base *** in **** Source: ****

According to the Comité National Routier, the average price of transporting goods by truck can be calculated from three variables: load per kilometer, load per day and load per hour[***].

Source: ****

For transport alternatives to road, production prices have remained relatively stable since ****, with the exception of air freight transport, where production costs fell by more than **% between **** and ****. By ****, however, production prices for French services in air freight transport had exploded to ***.*[***]. Here too, costs soared after the health crisis:

+**.*% for air transport compared with **** +**.*% for river transport +*% for rail transport

These cost explosions are, after all, logical in view of the war in Ukraine, which has pushed ...

4.3 Fuel price trends

Fuel costs are generally costs on which carriers prefer to make savings. They represent around **% of external costs for road haulage companies, and are not negligible for air and sea carriers[***].

After a gradual rise in prices between **** and ****, prices stabilized in ****-**** due to the health crisis. as a result of the war in Ukraine, the price of Brent crude has risen again (***)[***]

Brent oil price per barrel World, ****-****, in euros Source: ****

4.4 Digitalization, ecology and progress in river transport

To facilitate savings in the freight transport sector, new digital platforms are being set up to optimize transport. Timocom, for example, has created a freight exchange platform, which pools the freight transport demand of several companies with freight forwarding companies[***].

A number of initiatives are also underway to achieve energy savings in the sector, notably by improving equipment (***)[***].

River transport is also growing, driven by the desire to avoid traffic congestion in major cities and to transport larger quantities of goods. Casino and Franprix, for ecological and economic reasons, have already organized the delivery of some of their stores by river[***].

Traditionally, construction companies are the biggest customers for this type of transport (***), accounting for **% of traffic in the Paris region[***].

Other segments are also growing, notably containers and waste. Capacity is set to rise from ***,*** TEU in **** to ***,*** TEU in ****.

5.1 Freight transport regulations

Providers of public road haulage services are obliged to charge prices that cover fuel costs, road expenses, tolls and vehicle depreciation[***].

Prices must be set according to :

The services provided by the carrier; Thelength of time the vehicle is immobilized during loading and unloading; The time required to transport the freight; Fuel costs.

With regard to the price of fuel, one of the main expenses incurred by road hauliers, a mechanism for passing on fuel prices has been put in place by the legislator. The price of the service may be revised in the event of a change in fuel prices, unless otherwise specified in the contract[***].

The taxation of road hauliers is also specific[***]. There are * taxes that apply to companies in this sector:

The TICPE (***), which taxes a hectoliter of commercial diesel at between €**.** and €**.**; The TSVR, also known as the axle tax, is intended to compensate for the wear and tear on roads caused by the passage of vehicles weighing over ** tonnes . The amount of this tax, depending on the vehicle's suspension, ranges from €* to €*** per vehicle[***].

Lastly, investment tax rebates have been developed for transport trucks over *.* tonnes that use clean fuel (***)[***].

As part of the fight ...

6.1 Segmentation

• Martin-Brower France
• XPO Logistics
• FedEx
• Marfret
• Fret SNCF
• DHL International Express France
• UPS
• FM Logistics
• Jacky Perrenot
• Kuehne + Nagel
• DSV Panalpina
• Geodis
• Transalliance
• Hardis Groupe
• Lahaye global logistics
• Sinari Group
• Capelle Transport
• Ceva Logistic (CMA CGM)
• CTlog International (Cevital groupe)
• Coquelle Transport Groupe
• Transports Toussaint
• Transports Fatton
• Stef
• GEFCO (CEVA)
• Heppner Groupe