FRANCE\\\


French giant battles for growth in a weak market


With France


Issue 8 2014 - Freight Business Journal


French President in a corner 25 a very strong


contender for the ‘sick man of Europe’


title, and President


François Hollande’s voter approval levels so low that they are scarcely measurable, is this the time for the country’s big economic moment? With the incumbent Socialist party’s prospects for re-election receding rapidly, might the president try to stage a daring break-out from the forces that currently so restrict his freedom for manoeuvre, chiefly France’s powerful labour unions? So far, there has been little


sign of that happening, though. Hollande very quickly distanced himself


from a suggestion by


Minister of Economy, Emmanuel Macron that France might be ready to drop the maximum 35-


The freight market is still being affected by the weakness of the French market which, in general, has yet to recover to its pre-crisis volumes, says leading French transporter and forwarder, Norbert Dentressangle. In particular, weakness in the industrial sector, hit by a lack of export competitiveness, and a slowdown in sectors sensitive to consumer demand like distribution and packing. The market is at one and the


same time highly concentrated yet at the same time fragmented. And uncertainty over truck taxes - until the current scheme was abandoned in mid-October - have also profoundly affected customer relations, says managing director of Norbert Dentressangle’s Transport division, Luis Angel Gomez. Against this background,


the priority must be to maintain profitability, maintain competitive costs which have been affected, not just by salaries but increased salaries, while continuing to offer clients innovation and valuation creation. Norbert Dentressangle for its part plans to maintain its


leadership in French road transport; France remains its main market. It will continue to innovate, despite the difficult market conditions, particularly in value-added services, such as its KeyPL transport optimisation service the ‘Red inside’ leasing package or the development of multimodal transport solutions. Norbert Dentressangle has been a pioneer in this respect, for example with its work with Franprix in which it put in place a multimodal service for central Paris using a combination of road and barge transport. Norbert Dentressangle


also plans to become a major player in international freight forwarding. Here, the market has been affected by the downturn in global economic activity and hence freight activity; margins in the sector have been under pressure since 2008, despite a rebound in 2010. However, the company has


achieved critical mass in French freight forwarding, explains managing director of the Air and Sea division, Pascual Praquin, reinforced by its acquisition of fellow forwarder Daher, finalised in September 2013. This has cemented its


place in the top ten in France. At present, Norbert


Dentressangle has eight air and seafreight offices in France, at the main ports and airports, plus Strasbourg, Lyon, Lille, Nantes and Toulouse. It has also set up an Air and Sea division which includes 720 partners in 56 offices and present in 14 countries. The Air and Sea division


achieved turnover of €149 million in the first nine months if 2014, up almost 60% compared with the same period in 2013, beating growth in the general market by 10%. For the future, the division


plans to offer a global supply chain offer, particularly where it can exploit synergies with the group’s transport and logistics solutions. This will include a complete import delivery service to the final customer, along the lines of those already developed in Russia and in the US with


the acquisition


of Jacobson finalised in September. Norbert Dentressangle will


also build on its recognised expertise in specific sectors such as aerospace, luxury goods and hi-tech.


hour week, something very dear to the trade unions. If the unions are Hollande’s


rock, then his hard place is German Chancellor Angela Merkel, who is demanding that France embark on an austerity drive similar to that which has delivered deficit reductions and economic turnarounds in Ireland and Greece. But so far, Hollande has been unable or unwilling to confront the unions,


although


French finance minister Michel Sapin in late October offered the European Commission savings of €3.6 billion in a bid to head off full scale confrontation with Brussels. This will bring France closer to balancing its budget, but the French Government is clearly fearful of cutting to far and too fast in case it tips it into


full-blown recession again. The freight industry does have


a special interest in all this. For a start, France is a major market for UK transporters and forwarders. As with virtually every other European freight market, the trade is heavily skewed in favour of inbound volumes into the UK – and if the French are struggling economically and unable to buy even the limited volume of goods they currently purchase from us, the gap will widen still further. And, if France is to experience


yet another period of labour unrest, freight operators will be on the front line if ports and roads are blockaded or ferry operations hit by strikes. With France being the UK’s main entry-point to Europe, operators to all destinations stand to suffer.


Truck tax ‘was Sword of Damocles’


The French Government’s attempt to introduce a truck tax last year was “disruptive” and “ridiculously managed” said Norbert Dentressangle chairman Hervé Montjotin, but at least the Sword of Damocles that had been hanging over the industry had been removed. The compromise reached was “fairly acceptable” to the industry, he said. Montjotin was presenting the


French-owned forwarding and logistics group’s nine-month revenue figures for 2014. The UK is the second most important market for ND aſter France, accounting for around 20% of its overall market, and revenue here was up 5.3% in the first nine months of the year. Commenting on business


activity for the first nine months of 2014, Montjotin said the company had maintained a strong growth momentum, while reaping the benefits of


its increasingly international profile. However: “The French market is still weak, due to the unfavourable economic climate and the uncertainty surrounding the introduction of the HGV tax, until it was dropped in mid-


October.” But the integration of US forwarder Jacobson since 1 September, “is proceeding rapidly and smoothly, and the roll-out of the Norbert Dentressangle brand is already underway.”


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