South America Freight And Logistics - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2017 - 2029

South America Freight And Logistics - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2017 - 2029

The South America Freight And Logistics Market size is estimated at USD 180.78 billion in 2024, and is expected to reach USD 223.02 billion by 2029, growing at a CAGR of 4.29% during the forecast period (2024-2029).

E-commerce industry and infrastructure investments, developing the freight transport market in the region

• The market has been observing increasing investments in the shipping and trucking sectors. Many new players have entered the market, and with the competitive advantage of digitization, the new players are expected to increase market competitiveness. From 2018 to 2022, the average annual infrastructure investment in Brazil amounted to USD 36.3 billion, followed by Chile, with an average annual infrastructure investment of around USD 17 billion.
• E-commerce is a major factor in the increased demand for transportation services. Revenue in the e-commerce market in South America is expected to reach USD 77.42 billion in 2023. Revenue is expected to register a CAGR of 14.76% during 2023-2027, reaching a value of USD 134.27 billion by 2027. In the e-commerce market, the number of users is expected to reach 244.1 million by 2025. User penetration was 54.0% in 2022 and is expected to be 58.7% by 2025.
• Brazil is by far the largest market for commercial vehicle sales in South America. In 2019, sales or registrations of new vehicles in the country amounted to nearly 526 thousand units. Argentina was second in the region, with approximately 126.4 thousand commercial vehicles sold that year. Sales increased in 2021 after an initial decrease in 2020 due to COVID-19. The CEP players have since then captured significant market share. In 2021, FedEx (including TNT), United Parcel Service (UPS), and Deutsche Post DHL held 44%, 33%, and 20%, respectively, of the market for express and courier services in the Americas, the same as the previous four years.

Growth and transition in South America's freight and logistics

• Brazil is one of the major economies in the region, along with Argentina, Chile, Colombia, and Peru. Total freight volume in Brazil witnessed a YoY increase of 6% in 2021 due to increased transportation activity contributed by road, rail, and air. Air freight witnessed a YoY growth of 10.8% in September 2022, the highest growth among other regions with new services and capacity, and in some cases, investing in additional aircraft for air cargo. Cargo capacity witnessed a YoY increase of 18.4% in September 2022. However, rising fuel prices and the disruption of global transportation chains negatively impacted international freight in the country.
• The e-commerce sector has been witnessing a boom in the region led by the COVID-19 pandemic and is expected to grow during the forecast period. Brazil witnessed an increase of 12.59% YoY increase in e-commerce during the first quarter of 2022, whereas Chile witnessed a YoY growth of 23%. The huge growth in the e-commerce sector is driving warehouse logistics in the region. In the second quarter of 2022, the average vacancy rate was below 6% in the region. Space availability is among the major challenges related to warehouse logistics. Further, the pharmaceutical market in Argentina, with a domestic market value of USD 8,329 million in 2021, has been a significant driver of temperature-controlled warehousing in the country.
• South America is working toward strengthening its freight and logistics infrastructure. In 2022, the government of Argentina announced direct investments of USD 2.8 billion to enhance transport and water projects for the 2023 budget. Investments worth USD 250 million were allocated to promote decarbonization in the transportation industry in Brazil.

South America Freight And Logistics Market Trends

South America is offering an investment of USD 4.5 trillion in infrastructure to improve the transportation sector

• Chile's transport and storage sector showed steady growth in 2021, with a 24.41% increase in its contribution to GDP. In 2022, transportation, driven by maritime services, expanded by 27.9% due to improved infrastructure and storage demand. Argentina's transportation sector rebounded by 10.62% in 2021 but experienced a Q1 2023 drop in GDP to ARS 52,590.67 million (USD 297.543 million) from Q4 2022's ARS 53,539.95 million (USD 302.914 million), attributed to reduced transport usage, increased private vehicle reliance, and traffic congestion. Brazil's transportation industry encompasses cargo, ports, public transit, and urban mobility, with logistics being costlier at 12% of GDP due to inadequate infrastructure compared to the United States.
• Chile’s Public Works Ministry (MOP) announced a USD 4.7 billion concession plan in 2021, under which highway projects were said to cost approximately USD 11 billion over the next five years, while other notable projects included hospitals, airports, cable cars, trams, and re-tenders for groups of jails. According to the government, the 2021–2025 five-year plan includes various processes for concessions and tenders. For instance, the value of roadwork projects alone exceeds USD 11 billion.
• South America presents investment opportunities of USD 4.5 trillion over the next decade, with 22 initiatives in transportation and telecommunications amounting to USD 117.8 billion. The regional infrastructure integration plan includes 409 transportation, telecommunications, and energy projects, totaling USD 150.4 billion. By 2040, ports and airports are anticipated to necessitate investments of USD 55 billion and USD 53 billion, respectively.

Crude oil prices in the region rose to USD 100 per barrel in 2022 owing to the impact of the Russia-Ukraine War on global crude oil

• Colombia is Latin America's third-largest oil producer, followed by Brazil and Mexico. Colombia supplied 203,000 barrels per day on average (2.4% of total US crude oil imports) in 2021. South America pumped 442,789 barrels per day on average in 2022, which was 13% lower than in 2021. Brazil has the region's second-largest oil reserves, accounting for a volume of 12.7 billion barrels. In 2022, Latin America's largest oil producer pumped slightly more than 3 million barrels per day, witnessing a 5.6% increase from 2021.
• In 2021, the price of diesel declined by 27.26% YoY, and the price of gasoline declined by 9.85% YoY. The main factor leading to fluctuations in diesel prices is the international demand for distillate fuel. However, Argentina's diesel oil and liquified gas shortages are affecting the mobility of private cars, passenger and cargo transportation, and economic activities. Due to sanctions against Russia, there has been an impact on the price of fuels. The price of oil in the region rose to USD 100 per barrel in 2022, compared to USD 68 in 2021. Argentina's state-owned oil company purchased diesel from the spot market due to extremely high demand and the national government's electricity and gas subsidies.
• As of March 2022, the diesel prices in Belize and Barbados were among the highest reported in Latin America and the Caribbean, averaging above USD 1.7 per liter. Within South America, Brazil had the highest diesel price, at USD 1.38 per liter, while Venezuela reported the lowest, with a liter of fuel costing an average of USD 0.03. As of June 2023, Uruguay reported the highest gasoline prices in Latin America and the Caribbean, with an average price of 1.83 USD per liter, followed by Chile with USD 1.58 per liter.

South America Freight And Logistics Industry Overview

The South America Freight And Logistics Market is fragmented, with the top five companies occupying 6.35%. The major players in this market are Deutsche Post DHL Group, DP World, DSV A/S (De Sammensluttede Vognmænd af Air and Sea), Kuehne + Nagel and SAAM (sorted alphabetically).

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