At the start of 2024, the road haulage sector in France and Europe is faced with an intriguing paradox: while transport prices on the spot market continue to fall, the costs borne by hauliers continue to rise. How can this be explained, and what are the consequences for companies?
The current economic climate in France is marked by sluggish growth, persistent inflation and very limited forecasts for recovery. At the same time, road transport professionals are facing a difficult situation, exacerbated by cost increases on several fronts. Let's take a closer look at the current economic situation.
Road haulage prices on the decline: the reasons why
In January 2024, road haulage prices in France fell by 0.9% compared with December 2023, marking the fourth consecutive month of decline, according to the Upply Freight Index. This trend is mainly due to a fall in demand for transport, resulting from the gloomy economic outlook.
Meanwhile, growth in economic activity remains limited, with a forecast of +0.2% for the first two quarters of 2024, according to Insee. Moreover, it should be noted that the disruptions linked to the farmers' revolt in January have contributed to this slump.
Also find out: changes for road haulage in 2024.
In Europe, spot market prices fell by 4.5 points in the fourth quarter of 2023, affected by weak demand and lower diesel prices. This dynamic highlights a road transport market under pressure, facing major economic challenges.
Increased costs for carriers in 2024: explanations
Road hauliers are facing a significant rise in their costs. According to analysis by the Comité National Routier (CNR), between 2021 and 2023, labor costs have risen by 16.4%, due to wage increases and travel allowances. Vehicle maintenance costs climbed by 13.4% and structural costs by 15.3%, while tolls rose by 6.8%.
Excluding fuel, inflation in the road haulage sector reached an annual average of 6.3%, with an 8% rise in the social component.
For 2024, CNR forecasts annual average cost inflation of 6.8%, with specific increases for long-haul (+10.1%) and regional (+9.7%) driver salaries. Travel costs are expected to rise by 6.2% and overheads by 6%. These increases, exacerbated by general inflation, are pushing up hauliers' costs and putting their margins under pressure, especially in an already difficult economic climate.
The resilience of freight transport professionals
Faced with these challenges, professionals in the road haulage sector must demonstrate resilience and adaptability. The industry federations were quick to express their concerns to the new Minister for Transport, Patrice Vergriete, underlining the urgent need for support measures.
To better adapt to market fluctuations, transport companies are investing in more efficient technologies, such as fuel-efficient vehicles and advanced fleet management systems. They are also optimizing their logistics operations, by improving route planning and load management.
Some companies are exploring partnership models and the pooling of resources to reduce costs. However, fully passing on cost increases to customers remains a challenge, forcing companies to strike a delicate balance between competitiveness and profitability.
Road haulage trends: forecasts for 2024 and 2025
The outlook for 2024 and 2025 points to a complex situation for the road haulage sector. According to the CNR, cost prices are set to continue rising in 2024, with annual inflation forecast at 6.8%.
Driver salaries, maintenance costs and tolls are likely to remain the main drivers of this increase. However, forecasts of modest economic growth (+0.9% in the EU and +0.8% in the Eurozone for 2024) suggest that demand for transport could remain weak.
As a result, freight rates, particularly on the spot market, could continue to fall. Stabilizing inflation could offer some respite, but cost pressures will remain a major challenge for carriers, who will have to continue to innovate and adapt to maintain their competitiveness.
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