Market Trends of france freight and logistics Industry
France is boosting its logistics industry with USD 1.06 billion investments toward road modernization
- In transportation strategy, France planned to allocate EUR 5.1 billion (USD 5.44 billion) for highway maintenance and construction endeavors in 2022. This financial commitment to highways constitutes the larger portion, EUR 13.4 billion (USD 14.30 billion), dedicated to overall transportation investments as pledged by the government. Notably, most of these funds will be directed toward railway projects. The French government also unveiled its infrastructure spending priorities for the ten years concluding in 2028.
- As of March 2022, the transport and logistics industry encompassed approximately 397,000 operational enterprises, constituting 3.6% of the metropolitan business landscape. This sector employed 5.1% of the workforce and contributed 4.3% to the combined turnover. This expansion is notably attributed to the surge in e-commerce activities within the country. The projected outcome for the transportation and storage sector's revenue in 2022 was an estimated USD 266.50 billion.
- France has the best logistics for trading across borders. It has Europe's second-largest rail network, with 30,000 km (18,650 miles) of track and 1 million kilometers (620,000 miles) of road. Europe has the largest road network to maintain this. In May, the French government announced plans to increase the annual national road modernization fund by 25% to EUR 1 billion (USD 1.06 billion). Roads will be reviewed every five years beginning in 2022, using a new scoring system to determine which needs the most repairs and modernization. The roads that serve mid-sized cities are expected to be prioritized.
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Shortage of fuel in France is leading to rising fuel prices due to distribution issues caused by refinery strikes
- In France, 2023 ended with a litre of SP95-E10 priced at USD 1.96 and diesel at USD 1.93. TotalEnergies (the French oil company giant) announced that it will keep a 1.99 euro per liter cap on French fuel prices throughout 2024. In January 2022, a liter of diesel was worth USD 1.65, which was five cents higher than the value recorded in December 2021 and three cents higher than the value recorded in October 2018. The price of diesel mostly depends on the quality and supply rate of crude oil, increases in the cost of barrels of crude oil in France, and distribution issues caused by continuing refinery strikes.
- In the second week of August 2021, a liter of diesel was worth USD 1.49, while super-unleaded petrol was valued at USD 1.66. The price of fuel rose quickly in France during the first month of 2022 and reached a record level. As of May 2023, the average price of a liter of diesel in France was EUR 1.72 (USD 1.83), while petrol was priced at EUR 1.91 (USD 2.03) per liter.
- The prices of oil have been accelerating since 2020. The consumption of E85 oil recorded a 53% rise during May 2021-April 2022 compared to the same period during 2020-2021. The rise in fuel prices due to Russia’s invasion of Ukraine prompted cost-conscious motorists to turn to alternative fuel sources, with E85, a mixture of gasoline and up to 85% bioethanol, which recorded a high demand in France. In 2022, super ethanol (E85) represented 6.2% of the French fuel market, thereby doubling its market share from what it was in 2020. France, an agricultural powerhouse, is one of the strongest proponents of ethanol in the European Union. The French government offers a reduced fuel tax on E85 and a regulatory approach that incentivizes the sale of high-ethanol fuel blends.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- France's population witnessed a 0.27% YoY increase in 2022, driven by a surge in migration
- The construction and agriculture sectors recorded growth during 2017-2022 owing to recovery post the pandemic
- All sub-segments in the e-commerce industry witnessed a decline in 2022 except the food and beverages sub-segment (+9.9% YoY)
- France anticipates intra-EU sales boosting soft wheat exports to 17 million tons 2023-2024
- Imposition of limits on fuel subsidies and driver shortages in France are leading to rising logistical costs
- France ranked 13th in overall Logistic Performance Index in 2023, due to opportunities business expansions in Europe
- Road and rail freight transport witnessing significant growth due to major infrastructural investments
- Major investments for maritime infrastructure development since 2021 leading to rising trade of France with the United Kingdom, Netherlands, and Germany
- Freight rates witnessed increases across all modes of transport owing to inflation, rise in fuel prices, and labor shortages
- Significant investments in road, rail, and air freight are driving infrastructural improvements for volume expansion
- France implemented USD 5.33 billion investment plan in 2022 to develop cutting-edge electronics technology
- Increases in PPI and CPI due to the Russia-Ukraine War also ignited supply shortages
- Manufacturing contributed around 33% to the national GDP and grew by 11% YoY in 2022
- France is chalking out plans to stop deforestation, unethical imports, and unsustainable agriculture by 2030
- A drop in commercial vehicle registrations (heavy and light) in 2022 was witnessed in France and its surrounding region
- Renault Trucks leads in terms of electric mobility in freight transportation in France, holding a share of 75% in the electric MHDV market
- Presence of young maritime vessels coupled with investments in major ports of the country driving growth
- Median time in French ports increased to 1.19 days in 2022 due to port congestion and labor shortage
- Investments in road, rail, and air freight are driving infrastructural improvements for volume expansion
