The Banque de France's annual survey on road freight transport in France, unveiled at the last FNTR congress, highlights the weakening of the sector in 2023.
Table 1 - Data source: Banque de France - Study on the economic and financial situation of road freight transport companies, November 2024.
The French road freight transport sector has experienced two years of double-digit revenue growth: 10.6% in 2021 and 11.9% in 2022. However, these increases were largely attributable to the pass-through mechanism of the increase in fuel prices. The 2023 results confirm this: now that fuel prices have started to fall again, the sector's turnover growth has fallen to 0.8%.
In fact, the level of activity did not compensate for the effect of fuel prices. Key sectors for road transport, such as mass retailers and construction, have in fact suffered a significant economic slowdown, said Carine Jupin, regional director of Banque de France Hauts-de-France, during the presentation of the survey results.
The evolution of profit margins, in a sector where they are already traditionally low, is even more worrying. The rate of earnings before interest and taxes (EBIT), i.e. the EBIT/turnover ratio, fell by 0.8 points, from 2.2% in 2022 to 1.4% in 2023. It thus reached its lowest level for the period 2019-2023 as even in 2020, when the Covid-19 pandemic had partially paralysed activity, the EBIT rate had reached 1.5%. In 2022, the sector benefited from exceptional support measures which helped cushion the shock, while we have now "returned to traditional long-term subsidies", analyses Carine Jupin.
Companies are feeling the impact of the decline in activity, which began in 2022 but worsened in 2023 (see Table 3). On the other hand, the inflation of operating costs continues. According to the 2023 annual long-distance survey published by the National Road Committee (CNR), the total annual cost of driving staff increased by 5% between 2022 and 2023, with in particular an increase of 4.1% for the average gross remuneration of a driver. This cost item is very significant since it represents 35.3% of the total cost of a vehicle in 2023.
Other cost items are also under pressure. The only decrease is in fuel, due to the drop in oil prices.
Table 2 - Source: CNR Long Distance Survey 2023
The weakening of the sector is also reflected in the number of companies in the red. They were 40% in 2023, compared to 31% in 2022. "We are close to the level seen during the financial and economic crisis of 2008-2009," said the representative of the Bank of France. And of the 4 out of 10 companies that are loss-making, half were already loss-making the previous year.
The financial debt of road freight transport companies has decreased, mainly due to the repayment of PGE (state-guaranteed loans) granted during the Covid crisis. One indicator, however, is giving rise to some concern: repayment capacity, i.e. the ratio between financial debt and self-financing capacity. When this indicator is greater than 7 years, this indicates a certain weakness of the company because it then has greater difficulty finding financing. In 2023, 1 in 4 companies were in this situation, compared to 1 in 5 the previous year.
In 2023, French registered trucks and tractors saw their goods transport activity contract by 2.5% over one year, falling from 168.4 billion tonne-kilometres in 2022 to 164.2 billion in 2023, according to the Annual Transport Report 2023 published in November 2024 by the Ministry of Transport. Domestic transport for the French-registered fleet, that is to say the transport of goods between two cities in metropolitan France carried out by heavy goods vehicles registered in France, represents almost 96% of domestic transport of the French fleet. It decreased by 2.3% year-on-year, from 161.0 billion tonne-kilometres in 2022 to 157.3 billion in 2023. The decline is more marked for domestic transport operated on own account (-7.2%) than on behalf of others (-1.6%).
Table 3 - Source: Annual transport report 2023 - (*) Vehicles less than 15 years old - Trucks with a Grosse Vehicle Weight Rating (GVWR) of more than 3.5 tonnes and road tractors with a Gross Combination Weight Rating (GCWR) of 5 tonnes or more. (**) To ensure the continuity of the series following the United Kingdom's exit from the European Union, the contribution of the British fleet is estimated from 2021. (***) Estimates from Eurostat European RFT, provisional 2023 data, revised 2022. Field: Metropolitan France. Data sources: SDES, RFT survey; Eurostat, RFT-EU.
The annual long-distance survey 2023 published by the National Road Committee (CNR) also supports the observation made by the Banque de France survey on the deterioration of the road transport market. Vehicle operating conditions deteriorated in 2023. The vehicle production indicator calculated by the CNR as such decreased by -2% compared to 2022. "The production deficit compared to 2019, the last full year before the Covid pandemic, reached -6.7% in 2023", says the CNR. Furthermore, the activity indicator for the long-distance articulated unit fleet amounted to 94.4 in 2023. We have to go back to 2010, just after the 2008/2009 crisis, to find a lower value (94). Average mileage fell by 0.8% in 2023, after already falling by 3.4% in 2022.
The CNR survey also highlights a 0.9% decrease in the loading rate, which reinforces the trend observed the previous year (-0.6%).
Source: CNR Long Distance Survey 2023
The data available to date for the year 2024 show a continually unfavourable evolution. Volumes are down and operating costs, excluding diesel, remain under inflationary pressure. In this gloomy context, carriers are having difficulty passing on these cost increases to transport prices. Given the structural weakness of profit margins and their deterioration, the situation is becoming perilous.