The lack of intermodality in French ports places the country in a position of structural non-competitiveness. France is depriving itself of a transit activity that could create jobs and support the post-Covid expansion of international trade, regrets Mehdi Bournissa.

The timing coincided between the release of alarming figures on our trade deficit, a reflection of our deindustrialization, and the presentation of the National Port Strategy during the CIMer. This coincidence is fortuitous, as while port and logistics infrastructures are not enough to build a successful trade policy, they remain essential.

With less than 6 million containers handled in 2019, France ranks 7th in Europe, far behind Germany, the Netherlands, and even Belgium — all with trade surpluses — which handle between 15 and 20 million containers. Considering that container traffic represents 90% of global trade, this underperformance translates into a mere 8% market share in Europe for French ports.

Disconnected Ports

In the domestic market, one in two containers destined for France passes through Antwerp, Hamburg, and Rotterdam. Even though our ports are of good quality, they are dead ends due to their very weak connectivity to the « hinterland, » or inland regions. The most blatant example is the absence of a connection between the estuary port of Le Havre and the Seine, making it inaccessible to the conventional inland waterway fleet. As a result, inland waterway transport accounts for only 8.3% at Le Havre, compared to a national average of 2.3%, but still far from the 35% seen at competitors Rotterdam and Antwerp. Adding to the absurdity, according to Christian Buchet, Alsace and the former Lorraine are the French regions best connected to the sea due to their proximity to Antwerp, Hamburg, and Rotterdam.

Road transport represents nearly 90% of freight transport in France compared to 70% in Belgium and Germany, and even 50% in the Netherlands, with an imaginable carbon footprint. Rail freight, which accounted for 30% in 1984, now represents only 9%, compared to double that in Germany.

An Ultra-Attractive Fiscal Framework

We are in a situation of structural non-competitiveness. The lack of intermodality creates disruptions in logistics that generate additional costs for both imports and exports. A double burden, as exporting often requires importing inputs. France, despite its central geographical location, also deprives itself of a transit activity that could create jobs and support the expansion of post-Covid international trade. Developing huge logistics platforms like Hav Log or massive warehouses, while intermodality lags behind, is literally putting the cart before the horse.

While the 2008 port reform helped implement the Terminal Convention, facilitating the financing of operating companies, the new National Port Strategy only offers a list of ambitions for 2050. The reality is that port investments account for less than 3% of the state’s investments in transport infrastructure, which is grossly insufficient. The investment trajectory of €1.45 billion over eight years, including the merger of the ports of Le Havre, Rouen, and Paris, is paltry given the challenges and the vast French coastline.

To be concrete, the strategy should include at least:

• A massive investment plan aimed at digitalizing and opening up the major French seaports through coherent multimodal platforms. This would not only support French companies in post-crisis recovery via public procurement, but also make them eligible for the European recovery plan and intelligently support our ecological objectives without harming the industrial sector.

• A fiscal plan through the establishment of free zones, not only in response to the UK’s project of 10 free ports but also to develop modern industrial zones focused on exports and transit activities. The fiscal component should also extend the eligibility rules for the tonnage tax regime (based on Dutch or Danish rules, validated by the European Commission) and lower social charges to make the French flag more attractive. Lastly, it will be necessary to ensure the implementation and generalization of the project to standardize property tax on all port infrastructures.

• Finally, an institutional component that would place the Ministry of the Sea, which struggles to exist on its own due to a lack of connection to a sovereign ministry, at the heart of our economy by creating a large Ministry of Economy, Industry, Foreign Trade, Transport, and the Sea.

Mehdi Bournissa is VP at DP WORLD, a specialist in taxation and international trade issues.