South America Freight Forwarding Market Outlook, 2029

The South American freight forwarder market will contribute significantly to the global logistics scenario, owing to the rich natural resources, rapidly expanding industrial sectors, and growing integration into international trade networks of the region. Innovation lies at the heart of change that the freight forwarder market of South America is undergoing. Technological developments rapidly diffuse, enhancing efficiency, transparency, and customer satisfaction. Digital freight booking and management platforms are very common, providing real-time shipment location and better coordination.

Automation technologies, such as automated warehouses and RPA, are applied to decrease human effort and minimize errors. AI and machine learning will play their part in predictive analytics, route optimization, and inventory management. Other blockchain technologies are proving to be very promising in securing, making transparent, and tamper-free records of transactions within the supply chain. The IoT would form a fourth key innovation, with sensors and connected devices recording real-time data on conditions and locations of goods that further enhance the monitorability and manageability of logistics operations. The freight forwarding market in South America is dynamic and changing.

Probably one of the most important developments underway would be the investment underway in infrastructure. Countries like Brazil, Argentina, and Chile invest heavily in updating their transport networks, including sea ports, highways, and railways, to increase the efficiency of logistics. Public-private partnerships are being utilized as a funding mechanism for such infrastructure projects, enhancing the region's ability to handle increasing trade volumes. Another important positive driver is the growth of e-commerce. With the acceleration of online shopping driven by the COVID-19 pandemic, demand for efficient logistics and fast delivery services grew.

Companies are expanding their logistics capabilities by purchasing advanced warehousing solutions to improve last-mile delivery networks to satisfy this rapidly growing segment e-commerce. The regional trade agreements, like the Pacific Alliance and Mercosur, are still crucial in terms of facilitating trade and economic integration, opening further opportunities to freight forwarders. Indeed, slashing trade barriers, encouraging foreign investment, and regional trade agreements at the beginning in 1991 contributed to the countries' starting in this direction. This period of liberalization witnessed significant upgrading of the infrastructure and the entry of global logistic giants. The 2016 expansion of the Panama Canal increased the region's connectivity to global shipping routes, freight operations becoming more efficient. South America is urbanizing very fast, and this trend shows immense effects on the freight forwarding market.

According to the research report "South America Freight Forwarding Market Overview, 2029," the South America Freight Forwarding market is anticipated to grow at more than 5% CAGR from 2024 to 2029. The movement of people to urban areas increases demand for efficient logistics solutions in support of city life. The pressure from residents moving into cities, including São Paulo, Buenos Aires, and Santiago, is increasing the demand for advanced solutions concerning transportation and warehousing to cope with increased goods flow.

The problems that urbanization is giving way to, in the form of congestion and space deficiencies, are being overcome through innovative logistics strategies like urban consolidation centers and smart delivery solutions. Along such lines, investments in technology and infrastructure are made to handle such complexities of urban nature so as to ensure on-time deliveries and efficient distribution networks within crowded metropolitan areas. Against the backdrop of these changing market dynamics, a few strategic approaches are being taken up by South American freight forwarders.

Multimodal transportation finds great application in the optimization of these logistic processes through the combination of road, rail, air, and sea transport for higher efficiency and at lower costs. Companies work on digital transformation by implementing high technologies, such as real-time tracking systems, automation, and predictive analytics, to ease operations. A rush of partnerships and collaborations is forming among logistics providers in order to grow their offerings and geographical presence.

The investments in infrastructure a state-of-the-art warehousing and superior transportation network are required to accommodate growing trade volumes and be responsive to customer demands. Government policies and regulations play an instrumental role in the South American freight forwarders market. A number of countries bring in a set of reforms to enhance trade facilitation and logistics efficiency. For example, Brazil implemented the "Port Law" to make its ports more efficient and reduce bureaucratic delays, hence offering better efficiency for cargo handling. Argentina has adopted measures for modernizing its customs procedures and decreasing logistical bottlenecks.

Market Drivers

• Trade Agreements: Recent trade agreements, such as the Mercosur-EU deal, are bolstering international trade and creating new opportunities for freight forwarders in South America. These agreements reduce tariffs, streamline customs procedures, and promote economic cooperation, facilitating smoother and more cost-effective movement of goods across borders. By enhancing market access and reducing trade barriers, these agreements stimulate trade volumes and drive the demand for freight forwarding services to manage increased trade flows. The harmonization of standards and regulations under these agreements further simplifies logistics operations, making South America an attractive market for international trade and investment.
• Agricultural Exports: South America's rich agricultural sector, particularly in countries like Brazil and Argentina, drives the need for robust freight forwarding solutions. The export of agricultural commodities, such as soybeans, coffee, and beef, requires efficient logistics to reach global markets. Reliable freight forwarding services are crucial for maintaining the competitiveness of agricultural exports, ensuring timely delivery and preserving product quality. The growing demand for organic and sustainably produced agricultural products further underscores the importance of efficient logistics in the region. Investments in cold chain logistics, advanced packaging technologies, and efficient transportation networks are essential to support the growth of agricultural exports and enhance the global reach of South American products.

Market Challenges

• Political Instability: Frequent political changes and economic instability in South America create uncertainties in the freight forwarding market. Policies regarding trade, taxation, and infrastructure investment can shift rapidly, disrupting logistics operations. Companies must navigate these volatile conditions, which can affect planning and long-term investments. Political instability can lead to inconsistent regulatory environments, changes in trade agreements, and fluctuations in currency exchange rates, all of which impact logistics operations. Freight forwarders must develop strategies to mitigate these risks, such as diversifying routes, establishing contingency plans, and maintaining flexibility in their operations.
• Infrastructure Deficiencies: Many regions in South America suffer from inadequate infrastructure, including poor road networks and underdeveloped ports. This lack of reliable transportation infrastructure complicates logistics, leading to delays and increased costs. Freight forwarders face significant challenges in ensuring timely and efficient delivery of goods. Investments in infrastructure development, such as the construction of modern ports, expansion of road networks, and improvement of rail systems, are crucial to address these deficiencies. Public-private partnerships and government initiatives focused on infrastructure development can enhance connectivity and support the growth of the logistics sector in South America.

Market Trends

• Integration of Technology: There is a growing trend towards adopting advanced technologies to improve logistics efficiency in South America. The use of GPS tracking, automated warehousing, and digital platforms for freight management is becoming more common. These technologies enhance transparency, streamline operations, and reduce costs, making the logistics chain more efficient. Digital freight platforms connect shippers with carriers, optimizing load matching and reducing empty miles. Additionally, the adoption of AI and machine learning algorithms for demand forecasting and route optimization is transforming logistics operations, enabling companies to respond quickly to market changes and improve service levels.
• Focus on Regional Connectivity: Efforts to enhance regional connectivity through infrastructure projects, such as the Initiative for the Integration of the Regional Infrastructure of South America (IIRSA), are gaining momentum. These projects aim to improve transportation networks, facilitating smoother intra-regional trade. Enhanced connectivity boosts the efficiency of freight forwarding operations across South America. Investments in multimodal transportation solutions, such as integrating road, rail, and waterways, are crucial to optimizing logistics networks and reducing transit times. Improved regional connectivity supports economic integration and trade diversification, creating new opportunities for freight forwarders in South America.

Industrial & Manufacturing accounts for the largest share of South America's freight forwarding market, powered by rapid industrialization and growth in manufacturing activities across the region, aided by government initiatives and investments in infrastructure development.

South America has witnessed high economic growth in recent years, mainly resulting from expanding industries such as automotive, aerospace, and consumer goods. This growth has increased the demand for freight forwarders, who provide companies with efficient and reliable logistics solutions for the transportation of goods and products. Government initiatives, more precisely, have been a giant step ahead in encouraging industrialization and manufacturing within South America.

For example, the "Plano Brasil Maior" by the Brazilian government is aimed at improving the country's competitiveness on an industrial level by investing in infrastructure, offering tax incentives, and making trade agreements. Similarly, Chile's "Estrategia Nacional de Desarrollo" aims to secure economic growth by investment in infrastructure, innovation, and human capital. These policies, tilling huge investments in the region, are fostering the growth of industries such as mining, oil and gas, and agriculture. Boosted demand for freight forwarders has been witnessed due to the expansion of manufacturing activities across South America. A few players, such as DSV A/S, Kuehne + Nagel, and CMA CGM Group, have started offering customized solutions in logistics to the manufacturing firms, which include warehousing, transport solutions, and supply chain management. Digital technologies like blockchain, AI, and other digital technologies accelerate the growth of freight forwarders within the region efficiently and cost-effectively. Besides, its geographical position has made South America very attractive as a hub for international trade. Harbors in this region, such as the one in Santos, Brazil, or even Valparaíso, Chile, rank in the top busiest worldwide, with enormous cargo traffic. Starting with the growth of international trade, freight forwarding services have benefited from this change because companies need effective and trustworthy logistics solutions for the shipment of goods and products across borders.

Transportation and Warehousing is the major segment occupying the biggest market share in South America, as the region has huge investments in infrastructure development with respect to the transport sector, which has turned into growing demand for effective and professional logistics and associated warehousing services.

South America is experiencing huge investments in road, rail, air, and sea transportation infrastructure, which has fuelled the demand for effective logistics and warehousing services. The governments have been promoting infrastructure development through public-private participation, concessions, and investments in transportation infrastructure. Growth in the transport sector in South America boosts the demand for warehousing services. Bigger and more modern warehouses are required by firms to store goods and products, thereby fueling growth in the warehousing segment.

The warehousing market of this region is adopting modern technologies like automation and robotics to increase its efficiency and reduce costs. The growth of e-commerce in South America has increased demand for last-mile delivery services, which leads to a rise in the transportation and warehousing segment. Growth in international trade is another factor boosting the freight forwarding market in South America.

Many countries from the region ink free trade pacts with other regions of the world, strategically keeping it as an international trade hub. This surge in cargo traffic boosted freight forwarding services in the region. Companies such as DSV A/S, Kuehne + Nagel, and CMA CGM Group are now offering customized logistics solutions to companies, including transportation, warehousing, and supply chain management.

Ocean Freight forwarding leads the South America freight forwarding market due to its highly extended coastline and strategic location, making it a sure stake for international trade and cargo transportation.

Ocean freight forwarding will remain the leading segment in the South America freight forwarding market and will continue to capture the largest share of the market. This is mainly because of the large extent of its coastline and the geographical position that makes the region a very key place for international trade and cargo transportation. The South American coastline stretches over 25,000 kilometers, opening into leading sea lanes and trade routes. In cargo traffic, the ports in this region, such as the Port of Santos of Brazil, the Port of Valparaíso of Chile, or the Port of Callao of Peru, rank among the most congested in the world.

Recent growth in international trade has been a major factor behind the rising demand for ocean freight forwarding services in South America. The economies in the region have been growing, driven by the expansion of such industries as mining, oil and gas, and agriculture. This has created increased demand for logistics services, as companies require efficient and reliable transport solutions to move goods and products across borders. These include tailored logistics solutions that ocean freight forwarders such as Maersk Line, COSCO Shipping, and CMA CGM Group are giving to companies for the transport of containerized cargoes, bulk cargoes, and project cargoes.

Its geographical position has made the region quite an attractive hub for transshipment and re-export activities. Many companies use the South American ports as a hub to transship goods to North America, Europe, and Asia. As companies are in dire need of efficient and reliable transport solutions for movement of goods and products across borders, this is fueling the demand for ocean freight forwarding services. For example, the Port of Santos in Brazil serves as such an important transshipment hub that many companies use it to serve as a big re-exportation base to a lot of countries in South America and beyond.

Brazil captures key positioning in the South America freight forwarding market due to its large and diversified economy, strategic location, and huge investments in logistics infrastructure.

Brazil is the biggest economy in South America, contributing the maximum share to the freight-forwarding market in the region. It is strategically located with a long coastline and shares borders with several countries, thus making it a potential hub for international trade and cargo transport. The economy of Brazil is diversified by the strong presence of industries such as manufacturing, agriculture, mining, and oil and gas, which drives the demand for logistics services. Freight forwarding in this country is characterized by a great volume of cargo traffic; a significant portion is handled by the Port of Santos, one among the busiest ports in Latin America.

The Brazilian government has been investing aggressively in the development of logistic infrastructure, thereby enhancing the efficiency of the country's logistics infrastructure by modernization projects in the road and port sectors, while increasing capacity. Government efforts for the privatization of the logistics sector have been attracting huge private investments, resulting in the development of modern logistic facilities and services. The vast geographic size and diversified terrain of Brazil necessitate a strong logistics network, which has been fueling the freight forwarding market in the country.

The freight forwarding market of the country is driven by the growth of e-commerce, since it increases the demand for logistics services, mostly last-mile delivery and express logistics. The country has attracted big players in the freight forwarding business, such as DHL, FedEx, and Maersk, all looking to take a share of the growing demand for logistics services. Besides, membership in Mercosur, a trading block, has eased trade with other nations in the region, a factor fueling freight forwarding market growth.

Considered in this report

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report

• Freight Forwarding market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By End-User

• Industrial & Manufacturing
• Retail and E-commerce
• Automotive
• Consumer Goods
• Healthcare
• Others

By Service Type

• Transportation and Warehousing
• Packaging
• Documentation
• Value-added Services

By Transport Mode

• Ocean Freight forwarding
• Air Freight forwarding
• Road Freight forwarding
• Rail Freight forwarding

By Customer Type

• B2B
• B2C

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Freight Forwarding industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.


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