What Is The Growth Forecast For Mexico’s Logistic Market?

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In Mexico, the road network plays a vital role as transport infrastructure. Road infrastructure makes it possible to ensure delivery of large sizes and of course, door-to-door delivery. With a connection of highways, freeways, trails, and roads, the freight and logistic market of Mexico is expected to see a CAGR of 10.53% between 2021 and 2026. The logistic industry in Mexico is witnessing high growth and many logistic companies have emerged in the region to meet the growing needs of logistics. 

New Logistic Companies Are Emerging 

With the growing demand of the logistics industries, along with many large companies, even small companies have started emerging to leave their mark and grow in the current flow of rising demand of the logistic industry. This trend is visible across the globe. In 2021, the value of the global logistic market was US$ 4.92 trillion and it is expected that the value will increase to $US 6.55 trillion by 2027. Even though the logistic industry experiences disruption due to geopolitical tension, uncertainties, and disruptions in the supply chain, it is expected that the logistic market will continue to grow especially with an increasing dependency of the customer on the eCommerce platforms. Currently, the e-commerce industry and the logistics companies like XpressBees are witnessing mutual growth across the globe. In addition to the usage of technology, the logistic sector is also experiencing an improvement in its efficiency which is further contributing to its growth. 

Mexico Is A Logistic Hub 

When it comes to Latin America, Mexico is a logistic hub. It is because Mexico is the home of many Latin American companies’ headquarters. This makes Mexico an important strategic channel for many logistic companies to create a better shipping experience for the users. 

With a population of more than 130 million, the marketplace of Mexico is blooming and this is especially true for the online marketplaces as discussed above Mexico being a medium-income country has seen an increase in eCommerce platforms and to cater to the needs of the customers, the logistic industry of the region is also experiencing growth. 

Also, it needs to be noted that the US and Mexico share a healthy trade relationship. In fact, it will not be wrong to say that Mexico is one of the most important trading partners of the United States. After China, Mexico is the largest supplier of imports to the United States. Also, more than 80% of exports from Mexico go to the United States. 

How Competitive Are The Logistic Sectors Of Mexico?

The freight and logistics sector of Mexico is immensely competitive. Both domestic and international players like Trackon are either operating or trying to operate in the country. The competition is so intense, that in the past few years the competition has shifted from service-based to price-based competition. 

After the penetration of big companies like Amazon in Mexico, the infrastructure of the logistics companies of Mexico has improved to cater to the needs of the customers. Even though country-specific companies are working in Mexico, international companies have also joined the sector to further enhance the logistic sector of Mexico. 

Recently, last year, Mexico unveiled USMCA Park Logistics Center which is a multimodal logistic plan. The plan was given a go-ahead to improve international trade to honor the United States – Mexico – Canada Agreement. In addition to that, DIBRA Prologis also acquired 95,852 square feet of logistic space in Mexico indicating the huge potential that Mexico has. Currently, the major players in the logistic sector of Mexico are DB Schenker, Ryder System Inc. DHL, FedEx, and Penske Logistics. The consolidated logistical market of Mexico is currently governed by these few major players. However, the highly competitive freight and logistic market is still very fragmented and exists without any dominant players. 

Currently, the Mexico logistic and freight market is seeing a technology innovation and the current regulations are also are making the market very lucrative. In the coming years, a CAGR of 10.53% is expected from the freight and logistic sector of Mexico. Along with the logistics sector, even the eCommerce market of Mexico will see huge growth in the coming years with increased penetration of the internet in the region. 

Mexico Daily Post