Latin America logistics Market by Type (Logistics Segment, Cold Chain Logistics, Reverse Logistics, and Cash Logistics), End Use (Telecommunication, Trade & Transportation, Government & Public Utilities, Healthcare, Manufacturing, Retail, Media & Entertainment, Banking & Financial Services, Information Technology, Food & Dairy, Consumer Electronics, Cash Management, and Others) and Mode Of Transport (Railways, Airways, Roadways, and Waterways): Opportunity Analysis and Industry Forecast, 2020–2027

Latin America Logistics Market

The Latin America logistics market was valued at $ $542.40 billion in 2019, and is projected to reach $784.60 billion by 2027, registering a CAGR of 6.2% from 2020 to 2027. In 2019, based on country, Brazil garnered the highest share in the Latin America logistics market.

 

 

The COVID-19 outbreak has affected various industries across the world. It has led to either closure or suspension of their production activities in most of the industrial units across the world. The outbreak of COVID-19 pandemic is having an enormous impact on the industries such as aviation, automotive, manufacturing, and food & beverages, which in turn, significantly affect the logistics industry as well.

 

Logistics is widely known as the process of coordinating and moving resources such as equipment, food, liquids, inventory, materials and people from one location to the storage of the desired destination. It is a management of the flow of goods from one point of origin to the point of consumption, to meet the requirement of customers. Logistics management focuses on the efficiency and effective management of daily activities concerning the production of the company’s finished goods and services. This type of management forms part of supply chain management and plans, implements and control the efficient, effective forward, and reverse flow and storage of goods.The market is segmented on the basis of type, end-use and mode of transport. Based on type, it is bifurcated into logistics segment, cold chain logistics, reverse logistics and cash logistics. By end-use, it is divided into telecommunication, trade & transportation, government & public utilities, healthcare, manufacturing, retail, media & entertainment, banking & financial services, informational technology, food & diary, consumer electronics, cash management and others. On the basis of mode of transport, it is categorized into railways, airways, roadways and waterways. Based on country, the market is analyzed across Mexico, Colombia, Brazil, Chile, Argentina, Costa Rica, Panama    and Rest of Latin America. Further, breakdown of type and country by product is also provided in the report.

 

Some of the key players operating in the Latin America logistics market include A.P. Moller–Maersk, C.H. Robinson Worldwide, Inc., DB Schenker, Deutsche Post AG (DHL Group), DSV, FedEx, Geodis, Kuehne+Nagel, Supply Chain Solutions and United Parcel Service, Inc., and others.

Latin America Logistics Market Trends

E-commerce refers to the buying and selling of goods by using internet. Third-party logistics service providers encompass shipping of products to consumers. In addition, the e-commerce industry utilizes logistics service to manage and oversee the supply chain of e-commerce companies, which allows these companies to focus on marketing and other business operations. Thus, due to numerous benefits provided by logistics to the ecommerce industry, adoption of logistics service is rising at a significant rate, which in return is driving the growth of the logistics market. For instance, DHL, a leading logistics company, and the Panama Ministry of Commerce and Industry launched a Global Center of Excellence (GCOE) in January 2018 with the aim of fulfilling the central objectives of the National Logistics Strategy of Panama by 2030, to increase international investment in Panama in the areas of logistics and transport. The GCOE is focused on promoting Panama as a gateway to Latin America and a strategic logistics center through joint commercial development activities, education and training across the supply chain, and technical guidance for companies looking to develop their business in Latin America. Further, in September 2020, the e-commerce giant Mercado Libre bought a minority stake in Kangu, a Brazilian logistics startup to boost e-commerce. Kangu enables small retailers to collect and withdraw products purchased via e-commerce.

 

Increasing penetration of Internet of things (IoT) in the logistics sector enables freight companies and consumers to have direct access to the company network through Internet. The logistics infrastructure is constantly upgraded to meet the need. Increasing use of Artificial Intelligence (AI), machine learning, Radio-frequency identification (RFID) and Bluetooth, coupled with other newly introduced technologies such as drone delivery and driverless vehicles, are being witnessed in logistics services. These growing technological advancements act as the catalyst to the growth of the logistics market size. In addition, some of the logistics companies in Latin America are increasing their spending and are using technologically advanced systems for logistics enhancement, further expected to propel the growth of the logistics market in Latin America. For instance, SimpliRoute, an urban logistics solution raised the $3 million funding improve its AI-powered logistics platform. The new funding will help the startup to grow its logistics intelligence platform and expand to other countries besides Mexico, Chile, Peru and Uruguay. In addition, AT&T provides Internet of Things (IoT) solutions for Honeywell’s transport and logistics offerings internationally in countries across Europe, North America, Latin America, Asia, Africa and Australia.

 

Logistics demands the good infrastructure, supply-chain and trade facilitation. Without it, firms have to build up more stock reserves and working capital and this will strongly affect national and regional competitiveness due to high financial costs. In addition, the lack of infrastructure in Latin America hinders the logistics market as it increases costs and reduces supply chain reliability. These include significant inefficiencies in transport, poor condition of storage infrastructure, a complex tax structure, low rate of technology adoption and poor skills of the logistics professionals. For instance, according to a report by The Economist, an international newspaper, Latin America has a lack of adequate infrastructure. More than 60% of the region’s roads are unpaved. Further, the inconsistencies in the address and postal system is the other challenge for parcel delivery in Latin America. Many countries lack postal codes and rely on local landmarks for addresses, and as a result shipping companies often have trouble delivering parcels successfully. Moreover, logistics costs are heavily determined by the availability and quality of infrastructure. Infrastructure directly influences transport costs and indirectly affects the level of inventories and consequently financial costs. Thus, owing to poor transport infrastructure, firms need to have high levels of inventories, to account for contingencies, which in turn, lead to higher overall logistics cost. Therefore, factors such as poor infrastructure along with high inventory prices and insufficient warehousing space, are expected to hamper the Latin America logistics market growth.

Adoption of IT solutions in logistics service is extremely essential for smooth and efficient flow of the entire supply chain. IT solution adds economic value to the supply chain. For timely delivery and tracing goods in supply chain, IT solution plays a vital role. Various software, such as warehouse management system, Electronic Data Interchange (EDI), and cloud computing, help logistics service providers to enhance their real-time monitoring and tracking capabilities. Thus, increase in adoption of IT solutions and software is anticipated to increase the efficiency and smoothen the flow of supply chain, providing a remarkable growth opportunity for the key players operating in the market. For instance, Kestraa, a Brazilian logistics startup, raised $2.7 million funding from Canary Ventures and various angel investors for logistics software.

Kestraa is a cloud-based B2B solution for freight-management, connecting ship-owners, cargo agents, freight forwarders, government systems, and more. The software allows stakeholders to manage their shipments, anticipate delays, and optimize on delivery time. Customers are also able to monitor the delivery process of their goods. Kestraa will use the funding to continue to grow the platform and connect stakeholders to ensure a smoother process.

By Type

By End Use

By Mode of Transport

By Country