ARGENTINA FREIGHT AND LOGSITICS MARKET - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

ARGENTINA FREIGHT AND LOGSITICS MARKET - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Argentina freight and logistics market is expected to witness a CAGR of >2% during the forecasted period of 2020-2025. Argentina suffers from infrastructure deficit. According to data from the World Economic Forum, Argentina is one of the most backward countries in the region in terms of logistics capacity. The data indicates that the average regional investment in infrastructure is around 3.5% of GDP, while Argentina's indexes barely reach 2.9%. Analyzing the participation of each sector, it is observed that 91% of the total is moved by truck. The railroad would be responsible for 4.2% of the transport, while 4.8% move along the Paraná Waterway. On the other hand, less than 0.1% corresponds to air transport.

Key Highlights

• The logistics costs in Argentina are high compared to other Latin American countries. Argentina has the highest relative logistics costs; they are 32% more expensive than in Brazil and almost triple those of Mexico.
• Ecommerce growth is boosting investments in warehousing and logistics centers. This has led to the gradual development of logistics facilities in Argentina.

Key Market TrendsImproving Ecommerce Sales Resulting in Growing need for Warehous and Storage Facilities

In Argentina, more and more brands are moving towards digital sales. A business that in 2018 moved USD 229,760 million and grew 47% in sales versus 2017, despite the retraction of consumption, according to data from the Argentine Chamber of Electronic Commerce (CACE). CACE in its predictions anticipates even better numbers. 2019 is estimated to show a 50% jump, reaching 3% of total sales.

Improving sales through e-commerce platforms created a need where brands are in a process of reducing the square meters destined to the commercial premises and replacing them with spaces in e-commerce logistics centers. That is, they are understanding that they need less exhibition space and more areas for storage and transit. For instance, the logistics centers are mainly in areas of Greater Buenos Aires that have excellent access to transport. 84% of the surface under construction - around 251,028 square meters - is located in different areas of Greater Buenos Aires and the expectation is that in the short term, the projects destined to the e-commerce logistics will continue to increase.

90% of connected Argentine adults already bought digitally sometime in their lives which represents about 18.3 million people. The increasing popularity of e-commerce in the country helps drive the investment and development of new distribution centers and warehouses in the country.

Agricultural Exports Increasing

Agriculture is a major industry in Argentina holding 6.1% GDP share. The industry also is a major end-user for the logistics sector. The production of vegetables and legumes occupies only 1.5% of that total, with some 600,000 hectares. The production volume is 10 million tons and it stands out mainly for its high economic value per unit of weight and for its high production per unit of cultivated area. In 2018, exports of soybean, wheat, and corn generated 21.327 billion U.S. dollars and accounted for 35 percent of total Argentina exports, according to official data. The increasing exports demand for better logistics infrastructure in the warehousing segment and cold chain logistics.

Competitive Landscape

The Argentina freight and logistics market is expected to be fragmented with a large number of local and international players in the market. The market is still developing and this allows new players to enter the market as there are no strict barriers to entry. Major players in the market are AEROLINEAS ARGENTINAS S.A., DB Schenker, GEFCO, DSV AIR & SEA S.A., and Hellmann Worldwide Logistics among others. With the road freight segment dominating the market, a large number of players are focused on providing road freight transportation services in Argentina.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

AEROLINEAS ARGENTINAS S.A.
TRANSPORTADORA DE GAS DEL SUR S.A.
LATAM Airlines
DB Schenker
NUEVO CENTRAL ARGENTINO SA
Panalpina
GEFCO
Andreani Logistica S. A.
DSV AIR & SEA S.A.
Hellmann Worldwide Logistics
CEVA Logistics
Agility
DACHSER
DHL

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