France Freight and Logistics Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

France Freight and Logistics Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The France Freight and Logistics Market are anticipated to register a CAGR of over 4.5% during the forecast period. The market is driven by the suitability need rising in the industry. Furthermore, huge investments pouring into the market are driving the market.

Key Highlights

• For the third year in a row, France leads the European ranking in terms of foreign investment announced, far ahead of its historical rivals, United Kingdom and Germany. In 2021, France saw a 37% increase in logistics projects funded by foreign investors compared to 2019. In France, 119 logistics platform projects were announced in 2021, up from 89 in 2020 (+34%), owing to an increase in e-commerce fueled by the pandemic. These platforms may be the result of projects initiated by service providers or shippers. If only operator investments in the transport and logistics sector are considered, the total number of projects is 80. As a result, transportation and logistics ranked fourth in the Top 10 sectors in terms of the number of FDI in France.
Key Highlights
• France is a key hub for any company looking to expand its reach in Europe (2nd European consumer market) and internationally, thanks to its exceptional geographical location and the high quality of its logistics infrastructure. France is located in Western Europe, borders seven European countries and has four seaports. There are also French territories in other parts of the world, including the Indian Ocean, the Pacific/Oceania, North and South America, and the Caribbean, ranking France second in the world in terms of maritime domain reach. France is eager to establish itself as a world leader in future logistics and sustainable mobility. Aside from major companies like Geodis, Via Post, STEF, FM Logistic, and Bolloré Logistics, a large number of foreign companies have invested in the logistics sector in France.
• Companies realise that sustainability is a real consumer expectation and that it can also be beneficial to financial performance. In 2021, both Fevad and the government promoted a new code of conduct that encourages businesses to do better. Consumers have high expectations when it comes to this type of code of conduct. Any type of economic activity has an impact on the environment, but reducing it requires action from both businesses and consumers. Another critical area in which e-commerce can improve its practices is parcels. Reducing their size, limiting their use of plastic, and so on. Some companies are even going so far as to remove additional shipping boxes when the product's original packaging does not require extra protection. These products are shipped in a single box, which is good for the environment and economical for these companies.
• France is seeing large-scale infrastructure investment offering new logistics opportunities as a result of decarbonization policies. On June 1, 2021, the French ports of Le Havre, Rouen, and Paris (HAROPA) along the Atlantic trans-European transport network (TEN-T) corridor merged into a single port. HAROPA Port already achieved positive results in 2021, with maritime traffic reaching 83.6 million tonnes of goods, a 12% increase over the previous year. Meanwhile, river traffic increased by 4% during the same period. The Seine axis is being strengthened to increase river traffic, and HAROPA port has announced the construction of a major river and seaport complex ("Green Dock") in the Port of Gennevilliers, just 5 kilometres from Paris and 20 minutes from Roissy - Charles de Gaulle airport, allowing for last-mile delivery for urban logistics operators. The project is set to be completed by 2025.

Key Market TrendsGrowth in E-commerce sector supporting the market

E-commerce continues to grow, with the French spending over 129 billion euros (USD 137.53 billion) on online shopping in 2021! According to the French Federation of E-commerce and Distance Selling's (Fevad) 2021 e-commerce report, e-commerce has grown by 15.1% in 2021 alone, making France the second largest e-commerce market in Europe. Over the same period, the number of online sales sites increased by 11%. In short, e-commerce has never been stronger. To capitalise on this opportunity, professionals are working to improve their digital strategy and expand their exposure to e-commerce.

E-commerce managers are increasingly turning to new technologies to improve their brand image while attracting prospects and building customer loyalty. Artificial intelligence (AI) and virtual reality (or augmented reality) are improving user experience and increasing sales opportunities. Two examples are websites that provide virtual fitting rooms or a reverse image search feature. Indeed, many customers now use Google Images to search for stores that sell the product they want to buy. This type of search is used by 62% of consumers under the age of 35 to shop. The future of e-commerce is undeniably visual, but it is also vocal: more than one in every two French people owns a voice assistant, and more than half of them use it to search for products. This is what we call "voice commerce" or vCommerce

While the first quarter of 2021 saw a 33.4% increase over the first quarter of 2020, the quarter before the first lockdown, annual growth had slowed compared to the rest of 2020, when the panel was at its peak. This is especially true for the last two months of 2021, when the panel recorded a -15% decrease compared to the previous year, despite sales increasing by +46% year on year. Clothing-Fashion and Furniture-Decoration continued to grow in 2021, with +6% and +18% growth, respectively. Fast Moving Consumer Goods sales, increased by +6% compared to 2020. Technical products and beauty categories, which had increased the most in 2020, have decreased by -6% and -7%, respectively.

Huge foreign investment in France's logistics sector is driving the market

The health-crisis-affected industrial sectors, such as automotive, aeronautical, chemical, plastics, and construction, are returning to pre-pandemic levels. With the reconfiguration of supply chains and the explosion of e-commerce, industrial and logistics projects have seen the greatest increases, increasing by +18% and 37%, respectively, over 2019. This dynamic benefits all types of French territories. In 2021, nearly one out of every two industrial projects were completed in towns with fewer than 50,000 people.

The post-pandemic recovery and "Macron reforms" increased French investment by 24% to 1,222 projects in 2021. Investment in United Kingdom remained stable, increasing by 2% to 993 projects; London remains the most appealing city for FDI, with 34% of executive respondents ranking it as a top-three investment city. In Germany, however, the number of projects fell 10% to 841. It did, however, attract large industrial projects, particularly in the automotive and electronics sectors. The picture is different in terms of job creation, with the average FDI project creating 68 jobs in the United Kingdom, 45 in Germany, and only 38 in France.

Competitive Landscape

The France Freight and Logistics Market are quite fragmented with many players existing in the freight and logistics market. Some of the existing major players in the market include – DB Schenker, UPS, DHL, FedEx, Yusen Logistics, XPO Logistics, MSC (Mediterranean shipping company), Ekol logistics, Kuehne Nagel International AG, Schneider Transport, Bansard International and FlyTrans International Forwarders. With the increasing E-commerce market and developing infrastructure plans, the French economy has the potential for growth and opportunities for new players to penetrate the market.

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