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2020

Latin America Logistics Market

Latin America Logistics Market Size, Share, Competitive Landscape and Trend Analysis Report by Type, End Use and Mode Of Transport : Opportunity Analysis and Industry Forecast, 2020-2027

AT : Freight & Logistics

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Author's: Anvay Sonpimple | Lalit Janardhan Katare
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Latin America Logistics Market Outlook 2020-2027:

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.

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.

Latin-America-Logistics-Market-2020-2027

COVID Impact Analysis

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.

Furthermore, factors such as development of the e-commerce industry coupled with rise in reverse logistics operations and rise of tech-driven logistics services and growing adoption of IoT enabled connected devices are boosting the growth of the Latin America logistics market. However, poor infrastructure & higher logistics costs and lack of control of manufacturers on logistics service is hindering the growth of the market. In addition, surge in use of information technologies (IT) solutions & software and emergence of last mile deliveries coupled with logistics automation provide remarkable growth opportunities for the players operating in the Latin America logistics market.

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.

Latin America Logistics Market
By Type
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Cash Logistics segment is projected as the most lucrative segments

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.

Top Impacting Factors

Development of the e-commerce industry coupled with rise in reverse logistics operations

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.

Latin America Logistics Market
By End Use
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Cash Management segment is projected as the most lucrative segments

Rise of tech-driven logistics services and growing adoption of IoT enabled connected devices

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.

Risk to goodwill of manufacturer Poor infrastructure and higher logistics costs

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.

Latin America Logistics Market
By Mode Of Transport
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Airways segment is projected as the most lucrative segments

Surge in use of information technologies (IT) solutions & software

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.

Latin America Logistics Market
By Country
2027
Brazil 
Mexico
Colombia
Chile
Argentina
Costa Rica
Panama
Rest of Latin America

Costa Rica is projected as the most lucrative segments

Key Benefits For Stakeholders

  • This study comprises the analytical depiction of the Latin America logistics market analysis along with the current trends and future estimations to depict the imminent investment pockets.
  • The overall market potential is determined to understand the profitable trends to gain a stronger foothold.
  • The report presents information related to the key drivers, restraints, and opportunities of the Latin America logistics market with a detailed impact analyses.
  • The current market is quantitatively analyzed from 2019 to 2027 to benchmark the financial competency.
  • Porter’s five forces analysis illustrates the potency of the buyers and suppliers in the industry.

Latin America Logistics Market Report Highlights

Aspects Details
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By Type
  • Logistics Segment
  • Cold Chain Logistics
  • Reverse Logistics
  • Cash Logistics
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By End Use
  • Telecommunication
  • Trade and Transportation
  • Government and Public Utilities
  • Healthcare
  • Manufacturing
  • Retail
  • Media and Entertainment
  • Banking and Financial Services
  • Information Technology
  • Food and Dairy
  • Consumer Electronics
  • Cash Management
  • Others
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By Mode Of Transportation
  • Railways
  • Airways
  • Roadways
  • Waterways
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By Country
  • Mexico
  • Colombia
  • Brazil
  • Chile
  • Argentina
  • Costa Rica
  • Panama
  • Rest of Latin America
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Key Market Players

DSV, SUPPLY CHAIN SOLUTIONS, GEODIS, DB SCHENKER (DB GROUP), UNITED PARCEL SERVICE, INC. (UPS), C.H. ROBINSON WORLDWIDE, INC., KUEHNE+NAGEL, DEUTSCHE POST AG (DHL GROUP), A.P. MOLLER – MAERSK, FEDEX

Analyst Review

Startups operating in the Latin America logistics market are working to boost the logistics industry by using technologies such as artificial intelligence (AI), big data, machine learning, and Internet of Things (IoT). In addition, new technological advancements are adopted by majority of companies for efficient operations in Latin America logistics market. Further, rapidly growing business-to-consumer (B2C) e-commerce market integrated with strong business-to-business market has propelled the need of modernized logistics solutions and shipping solutions in the Latin America logistics market.

The factors such as development of the e-commerce industry coupled with rise in reverse logistics operations fuels the market growth. In addition, the surge in use of information technology (IT) and technological advancement systems such as IoT, arterial intelligence (AI) and machine learning also expected to drive the market growth. However, high logistics cost coupled with poor infrastructure hinders the market growth. Further, emergence of last mile deliveries coupled with logistics automation is some of the factors that are likely to foster the market growth.

Among the analyzed countries, Brazil accounted for the highest revenue in the Latin America logistics market throughout the forecast period, followed by Mexico, Argentina, and others. Moreover, Costa Rica is expected to witness the highest growth rate, owing to rise in trading activities due to globalization. This indicates lucrative prospects for logistics services in Latin America.


 

Author Name(s) : Anvay Sonpimple | Lalit Janardhan Katare
Frequently Asked Questions?

The outbreak of COVID-19 has brought effects on many aspects, such as flight cancellations, travel bans and quarantines, which made the massive slowing of the supply chain and logistics activities across the world. Logistics firms, which are involved in the movement, storage, and flow of goods, have been directly affected by the COVID-19 pandemic.

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Latin America Logistics Market

Opportunity Analysis and Industry Forecast, 2020-2027