BAROMETER. Road freight transport prices in France stopped falling in February, but the sector remains in turmoil. Declining demand is weighing on freight rates.
The deteriorating economic situation is beginning to be felt on the ground. According to data published by INSEE, the business climate in France lost one point month-on-month in February and 5 points year-on-year. At 98, it remains below its long-term average. French business leaders are thus in agreement with the Ministry of the Economy, which has lowered its growth forecast for 2024 to 1%.
If all the sectors surveyed by the INSEE evolve around their historical average of 100, the picture is more contrasted than it seems. The relative resurgence of optimism in the industrial sector contrasts with the gloomy mood of business leaders in other activities. In retail trade, the indicator fell by 5 points in February, "penalised in particular by the balances of opinion on the general business outlook, past sales and provisional orders", specifies the INSEE.
In addition, in its February 2024 monthly business survey, the Banque de France points to a rise in the monthly uncertainty indicator, constructed from a textual analysis of the comments of the companies surveyed. This is increasing especially in industry and construction. According to the Banque de France, the lack of visibility is worsened by the situation in the Red Sea, which increases supply difficulties for products transiting through the Suez Canal (e.g. electrical equipment). In addition, companies in the transport sector pointed to the blockages relating to the farmers' protest movement, which was still very active when they were surveyed.
Quite chaotic variations
According to data reported in the Upply database on March 8, road transport prices stagnated in France for February according to the Upply Freight Index (0.1%), after four months of successive monthly declines. However, these numbers should be considered with caution. This is a very small progression, and more data will be needed over this period to see if the end of the downturn is confirmed.
Source: Upply Freight Index – Road France
Commercial diesel rates recorded a slight decrease in January (-0.5%). Given the delay of about a month induced by the mandatory system of passing on changes in diesel prices to transport prices, it would have been logical to see freight rates decline. These are therefore variations that seem quite chaotic. The comparative evolution of the contractual freight rate index and the spot rate index illustrates these shocks (...)
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