Why France Faces Higher Transport Rejections Despite Slower Growth
Week - 15 - Contracted load rejections with paradox in France
In today's analysis, I want to focus on Spain and France, two countries which share many similarities but had differing economic trajectories in recent years. The Spanish economy has shown stable yearly GDP growth of 2.7% in 2023 and 2.9% in 2024, while French growth was more modest at 0.9% and 1.1% respectively. This contrast in economic performance raises a question on how it affects freight transport sectors, so I tried to assess available capacity through the lens of contracted load rejections.
Contracted load rejections serve as a crucial KPI, reflecting the available transport capacity in the market. A surge in rejections signals a reduction in capacity, potentially leading to increased transportation costs and inefficiencies. By closely monitoring rejections, we can anticipate market shifts and refine our logistics strategies.
The following chart illustrates the rejection trends for domestic transportation in these countries. Both nations experienced extreme conditions in 2022, followed by a stabilization in 2023. France exhibits a typical seasonal pattern with high rejections in summer and more relaxed periods in February and March. Conversely, Spain showed consistent increases and low volatility in 2024, aligning with its economic environment.
But when I look at international transports, the data reveals an unexpected rise in rejections in France, surpassing those in Spain. This is surprising, given Spain's stronger economic growth, which should increase international trade as well. This discrepancy raises questions about the underlying causes (And I can assure you I’ve triple checked it and haven't messed it up during my analyses).
I came up with five theories to explain this paradox:
1. Spain may have expanded its trucking capacity along with economic growth.
2. Spanish trucks, previously engaged in French international transport, might have returned due to better conditions at home.
3. International service providers might have shifted focus to Spain
4. Increased intermodal transport (rail and short sea) usage from Spain could have alleviated road capacity pressures.
5. French transport providers might have scaled back international operations due to high costs and low margins.
While this list doesn't cover all possible explanations, it highlights key factors contributing to France's capacity challenges, even more so than Spain's booming economy. I believe a combination of factors 2, 3 and 5, with a touch of increased intermodal usage is likely at play. While GDP forecasts are not predicting significant growth for France, any rise in production output and international trade could further strain available capacity in the country. For Spain, we anticipate moderate rejections increases in line with 2024 levels.
Christian Dolderer
Lead Research Analyst
Transporeon