Fuel shortages and the sluggish economy were without a doubt the two key topics in the media over October. On September 27, TotalEnergies employees began industrial action that quickly paralysed the North and Ile-de-France regions and then spread throughout the rest of the country. It was not until November 8 that the last remaining site to still be on strike agreed to return to work. France therefore experienced an episode in October that affected its entire economy, and in particular the transport world.
Although consumer confidence recovered slightly in October, it remains at historically low levels. Inflation continues to grow and is now reaching the food sector. "Price tabs will show a 12% increase at the end of December on average," according to INSEE. If we add to this the uncertain international situation with the ongoing conflict in Ukraine and the COVID situation in China, we see a vast wave of gloom forming on the horizon.
Against this backdrop, road freight transport prices continued to decline for the third consecutive month. Showing -1.7% compared to September, the Upply Freight Index indicator "faltered" significantly in October.
Source: Upply Freight Index – Road France
This time, the variation in prices is not predominantly guided by the evolution of the price of diesel. The pass-trough mechanism in force means that the impact of the price of diesel is felt the following month. However, in September, a decline of 0.8% was observed. This is therefore not enough to explain the decrease in prices.
In October, the main factor in the evolution of the curve was certainly the decline in transport demand. The decline in volumes is also described in the latest FNTR survey on the road freight transport situation: "In the third quarter of 2022, business leaders continue to express their pessimism regarding the economic activity of their companies and also expect a further decline in activity in the 4th quarter of 2022."
The evolution in prices over November will be particularly interesting to observe. In October, the price of diesel rose sharply: +14.6% compared to September. If prices continue to fall in November despite the pass-through effect, this will indicate a sharp slowdown in activity.
As the chart below shows, October 2022 turns out to be totally atypical compared to previous years. Generally, this month is synonymous with the entry into the peak season, the pre-Christmas season that sees demand soar, with the corollary of an increase in transport prices.
This year, we are witnessing the opposite phenomenon, namely a decline in demand. At the same time, transport supply has weakened somewhat (...)