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France Freight Transport Report 2011


France Freight Transport Report 2011

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Price $530.00
Meta Description No
Publisher Business Monitor International
Date of Report Aug 1, 2011
Quick Overview
Troubled industrial relations affected the French freight transport sector in 2010, and although there was areturn to normality at the end of the year, the possibility of disruptions in 2011 had to be taken seriously.In mid-October BMI commented on the strike that had paralysed the oil terminals at the port of Marseille,which at that point was entering its third week amid fears of a petrol shortage in France. The governmenthad begun transporting fuel by road and rail to avoid shortages as refineries in the region had begunshutting down. Port workers were protesting against government plans to raise the retirement age from 60to 62, as well as a 2008 port reform law to privatise cargo handling and transfer the workers from thepublic to the private sector. A 'work to rule' go-slow had been in place at the port since September 15.
Workers had blocked traffic at the oil terminals of Fos and Lavera at Marseille for more than two weeks,halting all movements of crude oil and oil products into and out of the port. BMI noted that the port ofMarseille had experienced several work stoppages in recent years as unions resisted efforts to transferpublic-sector jobs to private companies. A 12-day strike at the oil hub in December 2008 cost refineriesan estimated EUR26mn (US$36mn), including EUR15mn related to vessel delays and EUR11mn in lostrevenue. According to the Union Française des Industries Pétrolières, the 2010 strike had already costcrude processers 'tens of millions of euros'.
The outlook in France is for economic growth to slow in 2011, with an associated knock-on effect for thefreight transport sector. In Q410 the administration of President Nicolas Sarkozy successfully resisted awave of strikes against his pension reforms. However, with his popularity ratings having taken a batteringand the presidential elections of 2012 on the horizon, we believe the government's appetite for furtherreform is now limited. The government will continue on its current course of fiscal austerity, which willweigh on private consumption levels and act as a growth decelerator. As a result of our analysis, BMIestimates 2010 GDP growth of 1.5% (following the 2.6% contraction in 2009). Our outlook for 2011 isfor the recovery to lose some of its impetus, with growth cooling to 1.0%, edging up to 2.0% in 2012. Inthe five years to 2015 we expected growth to average 1.8% a year, implying France will perform solidlybut undynamically. The economy will struggle with a de facto 2.0% annual growth 'ceiling'.
In November 2010 the EU imposed a fine of EUR799.4mn (US$1.1bn) on 11 air carriers, including theAir France-KLM Group, for co-ordinating air-cargo fuel and security surcharges. Air France and itssubsidiary faced the biggest fine of EUR339.6mn (US$467.3mn), leading to protests by officials andsuggestions of a possible legal challenge. After a deep trough in 2009 when French air cargo volumedropped by 13.9%, we saw a weak recovery in 2010 (estimated growth of 2.3%) which we forecast willcontinue into 2011, with growth of 3.1%, to 1.515mn tonnes.
During much of 2010 CMA-CGM, France's largest shipping company, was searching for investors toinject capital and reduce its debt levels, Debt of US$5.3bn hung over the company, a factor that waswidely blamed on CMA CGM overstretching itself with new orders, such as its new mega fleet. Anumber of financial suitors had come forward, but all had been sent on their way following talks.France's main bulk port, at Marseille, suffered during the 2009 recession, experiencing a 13.4% drop intonnage handled, down to 83.1mn tonnes. BMI estimates this was followed by a partial recovery of 5.3%in 2010, taking total volume handled to 87.503mn tonnes. Against the background of a wobbling traderecovery in Europe, we project marginal growth of 1.6% in 2011 to 88.9mn tonnes.
In terms of cargo volume, France's railway system experienced two years of decline, in 2008 and 2009(with contractions of 0.9% and 21.9% respectively). We estimate a strong recovery in 2010 with growthof 25.0%. But for 2011 we believe the industry will be back on a pattern of slow decline, with volumedropping by 1.3% to 106.215mn tonnes.
In 2011 we expect total tonnage volume carried by road to increase by 1.7% to 1.99bn tonnes, followingan 0.9% gain in 2010. Growth over these two years will be insufficient to offset the 12.0% drop involume experienced during 2009. In fact it is only in 2015 that we expect the total to come back close topre-2009 levels.
In real terms French trade slumped by a large 11.5% in 2009, had a weak recovery in 2010 (estimatedgrowth of 2.5%) and is set to accelerate a little in 2011 (+3.9%). This means that the country's trade valuewill still remain below the peak achieved in 2008. In nominal terms we are expecting imports to totalUS$719.9bn in 2011, with exports lower at US$679bn. France will therefore register a trade deficit. To2015, average import growth in real terms will be 4.8% a year, with exports growing at the higher rate of5.3%.
Table of Contents
Executive Summary ........................................................................................................................................ 5
SWOT Analysis ................................................................................................................................................ 7
France Freight Transport Industry SWOT ............................................................................................................................................................ 7
France Political SWOT ......................................................................................................................................................................................... 7
France Economic SWOT....................................................................................................................................................................................... 8
France Business Environment SWOT ................................................................................................................................................................... 8
Industry Trends And Developments .............................................................................................................. 9
Multi-Modal/Logistics .......................................................................................................................................................................................... 9
Road ..................................................................................................................................................................................................................... 9
Rail ..................................................................................................................................................................................................................... 11
Air ....................................................................................................................................................................................................................... 12
Maritime ............................................................................................................................................................................................................. 14
Market Overview ............................................................................................................................................ 17
Multi-Modal ........................................................................................................................................................................................................ 17
Infrastructure ...................................................................................................................................................................................................... 18
Road ................................................................................................................................................................................................................... 18
Rail ..................................................................................................................................................................................................................... 18
Air ....................................................................................................................................................................................................................... 19
Water .................................................................................................................................................................................................................. 19
Global Oil Products Price Outlook ............................................................................................................... 20
Table: Oil Product Price Assumptions 2010 (US$/BBL) .................................................................................................................................... 21
Table: Oil Product Price Forecasts (US$/BBL) .................................................................................................................................................. 22
Industry Forecast .......................................................................................................................................... 23
Macroeconomic .................................................................................................................................................................................................. 23
Airfreight ............................................................................................................................................................................................................ 23
Table: Air Freight, 2007-2015 ............................................................................................................................................................................ 23
Maritime ............................................................................................................................................................................................................. 23
Table: Maritime Freight, 2007-2015 .................................................................................................................................................................. 24
Table: Inland Waterway Freight ......................................................................................................................................................................... 25
Rail Freight ........................................................................................................................................................................................................ 25
Table: Rail Freight, 2007-2015 .......................................................................................................................................................................... 25
Road Freight ....................................................................................................................................................................................................... 25
Table: Road Freight, 2007-2015 ......................................................................................................................................................................... 26
Trade .................................................................................................................................................................................................................. 26
Table: Trade Overview, 2007-2015 .................................................................................................................................................................... 26
Table: Key Trade Indicators, 2007-2015 ............................................................................................................................................................ 27
Table: France's Main Import Partners, 2002-2008 (US$mn) .............................................................................................................................. 28
Table: France's Main Export Partners, 2002-2008 (US$mn) .............................................................................................................................. 28
Company Profiles .......................................................................................................................................... 29
Air France -- KLM .............................................................................................................................................................................................. 29
CMA CGM .......................................................................................................................................................................................................... 31
BMI Methodology .......................................................................................................................................... 33
How We Generate Our Industry Forecasts ......................................................................................................................................................... 33
Transport Industry .............................................................................................................................................................................................. 33
Sources .................................................................................................................................................................................................................... 34




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