Over the past 18 months, Latin America has seen its e-commerce sector grow at record levels. The COVID-19 pandemic prompted over 50 million Latin Americans to buy online for the first time. This has caused demand for retail warehousing space to surge across the continent.
Brazil is the most dominant market in terms of warehousing, accounting for roughly 50 percent of total industrial market share, followed by Mexico, Colombia, Chile and Argentina.
Brazil’s warehousing sector has been buoyant in 2021, despite the ongoing impacts of the COVID-19 crisis. Most industrial investment is centred in and around São Paulo.
Infrastructure investment is critical to the thriving warehouse sector to enable rapid distribution. One of Bolsonaro government’s goals continues to be the modernisation of Brazil’s infrastructure, with large privatisation and development plans, ranging from airports, to highways and ports.
GLP is the largest owner and developer of warehouses in Brazil with more than 60 facilities and various mega projects under development. Other big investors and developers are also active in this market, including global players such as Brookfield, Prologis, Goodman, Amazon and Hines, as well as strong local developers such as HSI, TRX, LOG and Bresco.
Mercado Livre, Latin Americas’ most valuable company, has heavily invested in Brazil and is aiming to close 2021 with over 100 warehouses.
With approximately 80 percent of Mexican exports heading to the US, it is hoped the Biden administration will strengthen the relationship between these two North American Free Trade Agreement countries.
The Mexico Government recently launched The National Development Plan 2019-2024, which focuses on transportation infrastructure development. This includes a re-envisioned airport system for Mexico City and the development of a multi-modal cargo corridor across the Isthmus of Tehuantepec.
Global retailers such as Amazon, Mercado Libre and Walmart are strong. DHL also has significant plans in this market as they look to modernise their distribution and have a fully electric fleet by the end of 2021.
The pandemic has expedited the maturity of the e-commerce in Mexico, but with only 65 percent of the total population connected to the internet, there’s still plenty of scope for this market to grow.
Argentina is the third largest economy in Latin America, but the logistics and freight market is expected to grow at a slower pace than elsewhere in the region. Argentinean government investments in logistics infrastructure have not kept pace with the other major economies in Latin America.
Nevertheless, e-commerce has grown rapidly boosting investment in warehousing and logistic centres. Buenos Aires based Mercado Libre has grown to be the largest company in Latin America, by market value.
Chile is one of the most open economies in the Latin America region. It has boosted its trade through its membership of the Trans-Pacific partnership, alongside Mexico and Peru and eight other countries.
Colombia has invested strongly in free trade zones, attracting foreign investment. Like Brazil and Mexico, Colombia also has a national plan to develop logistics infrastructure.
Director, Latin America