Argentina Freight and Logistics - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2017 - 2029

Argentina Freight and Logistics - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2017 - 2029

The Argentina Freight and Logistics Market size is estimated at USD 26.16 billion in 2024, and is expected to reach USD 32.24 billion by 2029, growing at a CAGR of 4.27% during the forecast period (2024-2029).

Rising logistics costs in export-import in 2021 witnessed due to low levels of Parana river in Argentina

• As of 2021, logistics costs for Argentine exporters and traders increased by 300% due to historically low water levels of the Parana river. Generally, around 80% of Argentine agricultural exports are shipped from Rosario. However, as the downspout affected navigation and led to a nearly 25% reduction in loads vessels could carry from Rosario, traders and exporters were compelled to complete their cargoes in other Argentinian ports, mainly in the southern provinces, leading to increased logistics costs.
• The World Bank Board of Directors approved a USD 600 million loan to improve the infrastructure and service of the Belgrano Sur railway line in Argentina. This financing strengthened the World Bank's investment in the rail transport sector in Buenos Aires following the approval of a USD 347 million loan in 2021 to modernize the Mitre Line.
• Argentina's updated 2022 budget included cuts to public spending, in line with an agreement with the IMF, but it showed a mixed result for the infrastructure sector. Highway authority Vialidad Nacional's budget rose 21% from USD 1.09 billion in 2021 to USD 1.33 billion in 2022. Investments have increased by 25.6% to USD 1.04 billion in 2022. But investments in specific highway construction programs fell 10.7% to USD 362.45 million under the budget 2022, while funds for rehabilitation and maintenance increased by 86.9% to USD 317.62 million.

Argentina Freight and Logistics Market Trends

Argentine Trains invested USD 38 billion to transforms railways, boosting freight transport by 36%

• Argentina's transportation and storage sector showed signs of recovery in 2021, contributing 10.62% more to the GDP YoY. However, in the first quarter of 2023, GDP from transportation in Argentina decreased from ARS 53,539.95 million (USD 302.914 million) in the fourth quarter of 2022 to ARS 52,590.67 million (USD 297.543 million). This decline was mainly due to reduced use of transport services, resulting in a higher reliance on private vehicles and increased traffic congestion.
• In 2021, the Ministry of Transport, through 'Trenes Argentinos' (Argentine Trains), invested over USD 38 billion to modernize passenger and freight rail systems. This effort aimed to connect more towns, reduce logistical costs, enhance freight transportation efficiency, and stimulate regional economies by improving infrastructure and linking trains with other transportation modes. Notably, Trenes Argentinos Cargas transported 6.1 million tons of goods in 2020, a figure that surged by 36% in 2021, reaching around eight million tons. Significant infrastructure upgrades took place, including the renewal and reactivation of 1,300 km of tracks for the Belgrano Cargas project in January 2021.
• Transportation infrastructure projects nationwide have been suspended due to the prevailing economic conditions and the ongoing series of elections, including both provincial and national elections, scheduled for 2023. The Port of Buenos Aires handles 70% of the country's shipping activities and requires essential modernization improvements. These upgrades encompass dredging, filling services, equipment enhancements, and the implementation of updated cargo control systems.

An increase in fuel prices has led to indefinite strikes and protests since June 2023

• Fuel prices are skyrocketing across the world due to the Russia-Ukraine War and the recovery from the COVID-19 pandemic. These factors are causing inflation, due to which fuel prices are increasing. Natural gas is an important component of Argentina's energy matrix, not only as a fuel for households and industries but also for electricity generation, supply, and transportation. About 12% of Argentina's vehicles are powered by compressed natural gas. The import of LNG rose from 56 vessels in 2021 (at the cost of USD 1.1 billion) to around 70 vessels in 2022 (at a projected cost ranging between USD 4 billion and USD 6 billion).
• The shortage of diesel oil and liquified gas in Argentina had a profound impact on the mobility of private vehicles, passenger and cargo transportation, and economic activities. Due to sanctions against Russia, the price of oil in Argentina rose from USD 68 per barrel in 2021 to USD 100 per barrel in 2022. The price of liquified gas imported to Argentina rose from USD 8 in 2021 to USD 40 in 2022. Argentina's state-owned oil company purchased diesel from the spot market due to high demand and the national government's import subsidies that were offered to maintain the prices of electricity and gas.
• The rate of increase in fuel prices was between 12% and 20% in the City of Buenos Aires. In June 2023, the rate averaged 14.3% throughout the country in the case of the common variety and 17.7% for the premium variety. The consumer price index (CPI), taking into account the electricity and gas rates for the middle and upper income groups, rose by at least 16.5% due to a shortage of diesel. This situation put farmers in a tough spot as fuel is required to harvest and transport most crops. Hence, indefinite strikes have been conducted in the country due to the shortage of fuel.

Argentina Freight and Logistics Industry Overview

The Argentina Freight and Logistics Market is fragmented, with the top five companies occupying 4.73%. The major players in this market are Agunsa Logistics, DB Schenker, Deutsche Post DHL Group, DSV A/S (De Sammensluttede Vognmænd af Air and Sea) and TASA Logística (sorted alphabetically).

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