Market Trends of Latin America Contract Logistics Industry
This section covers the major market trends shaping the Latin America Contact Logistics Market according to our research experts:
Growth in the Automotive Sector is Spearheading the Market
Countries like Brazil, Colombia, and Argentina have been facing political and economic crises leading to a downturn in the growth of the automotive sector. However, Mexico, despite sluggish economic growth, has been laying a solid ground for growth in the automotive sector. The country's competitive manufacturing costs, compact supply chain, and transport links to the United States have made it a huge recipient of automotive investment, especially as an export hub to the United States and Canada.
The region has Mexico and Brazil with the most developed automotive sectors - Mexico produced about 4 million motor vehicles in 2019, while the production in Brazil added up to almost 3 million units that year. In fact, these two Latin American countries ranked amongst the largest motor vehicle producers worldwide, with Ford, Volkswagen, and Toyota among the leading players in Latin America.
Such growth in the sector is strongly demanding the involvement of the contract logistics players to support the transportation and storage of the vehicles and parts to the domestics as well as international markets.
Focus on Last-mile Cost Reduction
The growing e-commerce market in the Latin American region is leading the logistics players in the region to focus on warehousing, inventory management, and modes to provide faster deliveries incurring the least cost. The sector demands the logistics players to position their warehousing closer to city centers to facilitate same-day delivery services.
Implementation of big data management in the sector lowers costs, speeds fulfillment, and improves accuracy. E-commerce in Latin America also creates opportunities for legacy logistics providers.
In Latin America, logistics companies face huge traffic issues and spend a great deal of time finding and identifying un-named streets. Companies like Rappi, Chazki, and CargoX are developing in the market with their network of drivers and vehicles to deliver items leading towards a market to drop their pricing.
