According to a recent report by the Union of Transport and Logistics Companies of France (Union TLF), the sector has been struggling with a persistently weak business climate and soaring production costs, leading to an alarming increase in company insolvencies.
For 21 consecutive months, the business climate in the road haulage sector has remained below its long-term average due to a significant drop in demand, warns TLF. This prolonged downturn has been exacerbated by a 5.4% increase in production costs over the past year, excluding diesel, as reported by the National Road Committee.
The situation has been further compounded by a series of crises, including pension reform protests, a farming crisis, severe weather conditions, and repeated port blockades, all of which have placed additional strain on the industry.
The consequences of these challenges are stark, the union adds. In the second quarter of 2024, 603 road haulage companies entered into insolvency proceedings, marking a 45% increase compared to the same period last year and a staggering 73% rise over the past two years. These figures, compiled by Ellisphere and Officiel des Transporteurs, highlight a wave of business failures that far exceeds the post-COVID recovery, sending shockwaves through the industry.
Union TLF President Eric Hémar expressed deep concern over the situation, emphasising the urgent need for government intervention.
“We are witnessing a crisis that is threatening the very survival of many companies in our sector, particularly the smaller ones. This is not just a business issue but one that endangers employment and the vitality of our regions,” Hémar stated.
The road haulage and logistics sector is a vital component of the French economy, employing over 2 million people and contributing 10% to the nation’s GDP. Union TLF is calling on public decision-makers to address the crisis by reducing the tax burden on the sector, abolishing ineffective policies such as the unemployment insurance bonus-malus system, and maintaining support for the transition to greener fleets.
UK insolvencies surpass 2008 crisis levels
The crisis in France reflects worrying trends in other countries, including the UK. Recent insolvency figures from the UK show that more companies went out of business last year than during the 2008 financial crisis.
The road haulage sector has been particularly hard hit, with nearly 500 hauliers going out of business last year and more than 250 so far this year, representing a 10% increase in insolvencies compared to the same period in 2008.
The Road Haulage Association (RHA) has issued an urgent call for government action, citing a 10% increase in HGV operating costs over the past year, which has severely strained the financial stability of hauliers.