Chile Freight and Logistics Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Chile Freight and Logistics Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Chile freight and logistics market is expected to register a CAGR of over 5% during the forecast period.

• Chile has one of the most stable and free-market economies in Latin America, fueled by a robust fiscal response. Chile's GDP grew by 11.7% in 2021, even though logistics in Chile is still on a development path. Import and export operations from the country have increased in the last few decades. The country's perfect geographic location offers excellent potential for air, sea, or land connections to countries like Europe, Asia, and South and Central America.
• The country has also been investing heavily in infrastructural improvement. The Banco Central de Chile reports that in the first nine months of 2021, the total gross fixed capital formation in building and other investments increased by 10.6%. Also, Chile's health infrastructure is expected to see significant development during the forecast period.
• As per Statista, e-commerce is also witnessing growth in Chile. In 2021, the country had about 12 million online retail users, up almost two million from before the crisis. Still, the country struggles with income inequality. Consequently, informal trade remains an attractive alternative for sellers and consumers. In 2021, business-to-consumer (B2C) e-commerce sales in Chile were estimated at close to USD 12 billion, nearly double that of 2019.

• According to the International Trade Administration, the Chilean government has announced "Chile Over Rails", with a USD 5 billion budget. This railway investment plan will modernize Chile's railway infrastructure. Through 2027, Chile Over Rails will complete 27 projects to update the passenger and freight rail network run by the Chilean Railways Company, or Empresa de Ferrocarriles del Estado (EFE). By 2027, the goal is to triple ridership to 150 million passengers per year and to double the volume of freight transported to 21 million tons per year.
• The Alameda (Santiago) - Melipilla Train and the Santiago - Batuco line are two upcoming projects considered key for the country's post-pandemic recovery and make up 30% of the total government investment in this program. The 37-mile track extension, USD 1.5 billion Alameda (Santiago) - Melipilla railway project bidding took place in June 2021 and is expected to be completed in 2025. The 17-mile track extension, USD 650 million Santiago-Batuco railway project tender, was released in 2022 and will begin operations in 2025.
• The Chilean ministry has officially launched a USD 2.5 billion project to add a line to the Santiago metro system in 2022. The line, known as "Line 7," will run between the suburbs of Renca, on the northwestern outskirts of the capital, and Vitacura in the northeast. It will be 26 km long, with 19 stations. When completed in 2027, it is expected to halve travel time across the city's north and relieve pressure on the system's Line 1.
• A USD 267 million rail bridge across Chile's Biobío River (Biobío region) is expected to open in late 2025. Contractors have started working on the railway bridge. The project involves building a 1.9 km span to carry two tracks and a 320 m tunnel. The aim is to allow trains to cross at up to 100 km/h and possibly accommodate double-decker rolling stock.

• Chilean exports increased by 8.5% in the first month of 2021. Chile's global trade volume in January 2021 increased by 4.2%, and exports increased by 8.5%. With an export value of USD 7.94 billion, as compared with 2020. The primary export destination market for Chile's national products is China, accounting for 47.1% of the market in the year 2021, followed by United States (11.8%) and Japan (9.1%). These three countries accounted for 68.0% of total Chile's national sales.
• In January 2021, the mining sector's exports accounted for 56% of the country's total sales at USD 4.44 billion, an increase of 33.3% compared to the same period in 2020. In the mining product, shipments of copper minerals and their concentrates accounted for 53.3% of the department's total sales, an increase of 42.0% compared to the same period in 2020. Copper ranks second, with a participation rate of 37.3% in mining products. It's also crucial to note the growth of 59.5% seen by iron ore and its concentrates.

The Chile freight and logistics market is competitive and fragmented with the presence of many local as well as international players.

The country is considered to have great potential for both European and Spanish logistics providers and there are multiple benefits for other countries to develop their business operations in Chile as well. Some of the major players in the Chile freight and logistics market are C.H. Robinson, Bollore Logistics, Ceva, Agility, and DB Schenkar.

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