Regional Market Overview on Transportation Services in France

Road freight industry in France is dominated by few large players, and many smaller businesses. More than 86 percentage of the country’s cargo movement are done by road.

Road transport is expect to grow rapidly in the next few years due to higher online sales from  FMCG and E- Commerce sector. Logistics and express delivery companies have announced key expansion plans at major airports, to expand the cargo handling capacity

Freight Transportation Split by Mode in France

  • The domestic freight market in France relies heavily on road transportation, which accounts for 86 % of the total volume of goods transported.
  • French trucking market is highly fragmented. There are about 119,000 trucking companies in France, of which 77% operate 20 or fewer trucks while 58% operate 6 or fewer trucks.
  • The average age of trucks in France is ~6 years due to stringent adoption of Euro-class standards.

Road Freight Market Insight

  • The road freight transportation market in France is highly competitive due to the presence of several vendors in the market, which is affecting the profitability of vendors.
  • Road transport is expect to grow rapidly in the next few years due to higher online sales from FMCG and E- Commerce sector.

Logistics and express delivery companies have announced key expansion plans at major airports, such as Charles de Gaulle International Airport in the Paris to expand the cargo handling capacity

Major Transportation Trends Affecting French Trucking Market

Trucking capacity in terms of load to truck availability will rise due to newer truck registration. But the scenario will not reduce road freight cost due to scarcity of drivers to meet the existing capacity

Key Impact

Rail strikes and driver shortages have impacted on the overall cargo movement. Higher number of trucks are require to compensate rail volume shipments. ~50 trucks are required to replace a one freight train.

Advantage and Disadvantage for Client

Strategy/Technology Advancement

Due to regional warehousing developments and advance technology improvement such as route optimization, trucks will take shorter routes instead of long distances. This strategy will significantly reduce longer transit time and will improve truck drivers working conditions. Currently companies are following this strategy as a part of employee (driver) conditions improvements.

Lower Insurance Rates

Insurance rates were at historical high in the last 8 years in France, and for the next 5 years, this trend is expected to change downwards with the new technology improvements in trucks/loading services/protective technological processes. Client can have an negotiation leverage with the supplier at this point.

Less Brokers Involvement

As the brokerage services will not be necessary as much as it used to be, it is expected in the next five years major brokerage companies will invest in the trucking business to be able to stay in the business, which will trigger other mergers activities.

Higher Shipment Cost

Average payment per load per kilometer is expected to rise by 3.5% in the next two years, this will allow the trucking companies to pay higher compensations for the drivers. Currently companies are struggling to overcome driver shortage. Hence Client have to pay higher shipment cost in the next two years

Driver Shortage

Driver shortage is foreseen as a greater threat in the next five years. Industry is currently employing drivers from non-EU countries such as Ukraine, Turkey, Russia, West Balkans. It is recommended for Client to engage with larger service trucking providers since more mergers of small companies will take place

Trucking Market Supply – France

Trucking capacity will continue to increase in the short term (up-to 1 year) due to carriers switching from Euro class 5 to 6. More newer trucks will enter in the market adding additional capacity. But the scenario will not address rising road freight cost which is fueled by driver shortage. This trend is expect to continue until major challenges like drive shortages are addressed.

France Trucking Commercial Registration* Y-o-Y

  • The French market with respect to Heavy Commercial vehicle registrations has grown by 10 percent from Jan 2018 to Aug 2018 as compared with the same period last year, due to country’s stringent laws on euro vehicle standards
  • France has adopted stringent laws on Euro 6 vehicle standards which led to increase in new truck registration
  • Trucking capacity in terms of load to truck availability will increase due to higher sales of trucks. But road freight cost will not decrease due to scarcity of drivers to meet the existing demand

Trucking Regulations: France

Trucking capacity will continue to increase in the short term (up-to 1 year) due to carriers switching from Euro class 5 to 6. More newer trucks will enter in the market adding additional capacity. But the scenario will not address rising road freight cost which is fueled by driver shortage. This trend is expect to continue until major challenges like drive shortages are addressed.

Driving Regulations and Prevalent Restrictions

  • Drivers can drive for 9 hours a day, with a 45-minute break every 4.5 hours and 11 hours twice a week with 3 breaks
  • The enforcement of French government stating that the drivers are not allowed to rest inside trucks has had major impact on indirect costs for truckers
  • According to new regulation “ Loi Macron”, all foreign companies operating in France must pay a minimum of 9.67 €/hour to the drivers. However the truck driver salary ranges anywhere from 10.5 to 16 .5€/hour