Road transport professionals fear a drop in activity. Economic surveys and price trends are indeed sending unfavourable signals.
1/ Evolution of activity
(*) Domestic road transport of goods carried out by vehicles registered in France, for hire and on own account combined. Data source: Ministry of Transport.
In the second quarter of 2024, domestic road freight transport activity carried out by vehicles registered in France reached 41.8 billion tonne-kilometres, a fall of 0.8% compared to the previous quarter, in data adjusted for seasonal and calendar variations. This result brings to an end three quarters of gradual recovery, with activity nevertheless posting year-on-year growth of 3.1% in Q2 2024.
Road transport for hire, which represents the vast majority of activity, is particularly suffering. It fell by 2.7% quarter-on-quarter in Q2 2024 to 36.6 billion tonne-kilometres. Conversely, own-account transport increased by 14.6%, after 2.2% in the first quarter of 2024 (revised data). It thus obtained a share of nearly 12.5% in the second quarter of 2024, whereas this had been less than 11% in the three previous quarters, underlines the Ministry of Transport in its latest economic survey.
2/ Evolution of costs and prices
According to the economic survey of the Ministry of Transport, the cost price of long-distance transport (for an articulated unit of up to 44 tonnes) fell by 0.8% in the second quarter, after three quarters of increases. This decrease is only due to the fall in the professional diesel index (-3.4%), because all the other indices are either stable ("long-distance travel costs", "long-distance driver") or increasing (up to +0.9% for "infrastructure").
The latest economic report from the National Road Committee, published in October 2024, confirms these trends. "For the past year, RFT costs, excluding fuel, have recorded significant inflation: around 5.5% on average per year for heavy goods vehicles running on diesel as well as for heavy goods vehicles running on LNG or CNG," the CNR emphasises. A finding that is valid for both long-distance and regional activity.
Despite weaker demand, prices have held up rather well, probably supported by cost inflation. After a correction in January, prices on the contract market remained relatively stable until July. On the spot market, the development fluctuated more, with a peak also in July. On the other hand, provisional data for the third quarter seem to indicate a drop which could reflect a further weakening of demand.
Source: Upply Freight Index
Despite the drop in the price of fuel, an essential component of the cost structure of carriers, the inflation observed in other items is often difficult to pass on in a context of a lull in demand. The weakening of the sector is reflected in particular in the upward trend in defaulting road transport companies. It is up 39.1% year-on-year in the 3rd quarter of 2024, after having already grown by 37.2% in the first half of the year.
Content source : Altarès - ©Upply
3/ Outlook
Source : INSEE monthly economic survey.
After reaching a very low level in Q4 2023, the business climate in road freight transport gradually improved until May 2024, reaching 98.4 in Q2 2024. The index then stabilised on a plateau between June and August, before falling again in September. Here again, the month of September marks a drop, which was further accentuated in October.
Source : INSEE monthly economic survey. The results are presented in the form of opinion balances for the questions with 3 modes “increasing”, “stable” and “decreasing”. A balance of opinion is the difference between the percentage of "increasing" responses and the percentage of "decreasing" responses.
The balance of opinion on the expected development of turnover and demand in road freight transport deteriorated again at the end of the summer. Demand is also the first factor cited by business leaders as a source of limitation in the development of activity, well ahead of supply. The investment outlook for the next three months has also declined sharply, with the balance of opinion falling by 20.5% in October, after already posting a decline of 10.1% in July.
The difficulties in recruiting driving personnel are less critical than during the post-Covid recovery but nevertheless remain at a significant level: on average since the beginning of the year, 40% of companies consider the recruitment of driving personnel to be difficult.
