Market Trends of argentina courier, express, and parcel (cep) Industry
Argentine Trains invested USD 38 billion to transforms railways, boosting freight transport by 36%
- Argentina's transportation and storage sector showed signs of recovery in 2021, contributing 10.62% more to the GDP YoY. However, in the first quarter of 2023, GDP from transportation in Argentina decreased from ARS 53,539.95 million (USD 302.914 million) in the fourth quarter of 2022 to ARS 52,590.67 million (USD 297.543 million). This decline was mainly due to reduced use of transport services, resulting in a higher reliance on private vehicles and increased traffic congestion.
- In 2021, the Ministry of Transport, through 'Trenes Argentinos' (Argentine Trains), invested over USD 38 billion to modernize passenger and freight rail systems. This effort aimed to connect more towns, reduce logistical costs, enhance freight transportation efficiency, and stimulate regional economies by improving infrastructure and linking trains with other transportation modes. Notably, Trenes Argentinos Cargas transported 6.1 million tons of goods in 2020, a figure that surged by 36% in 2021, reaching around eight million tons. Significant infrastructure upgrades took place, including the renewal and reactivation of 1,300 km of tracks for the Belgrano Cargas project in January 2021.
- Transportation infrastructure projects nationwide have been suspended due to the prevailing economic conditions and the ongoing series of elections, including both provincial and national elections, scheduled for 2023. The Port of Buenos Aires handles 70% of the country's shipping activities and requires essential modernization improvements. These upgrades encompass dredging, filling services, equipment enhancements, and the implementation of updated cargo control systems.
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An increase in fuel prices has led to indefinite strikes and protests since June 2023
- Natural gas is an important component of Argentina's energy matrix, not only as a fuel for households and industries but also for electricity generation, supply, and transportation. About 12% of Argentina's vehicles are powered by compressed natural gas. The import of LNG rose from 56 vessels in 2021 (at the cost of USD 1.1 billion) to around 70 vessels in 2022 (at a projected cost ranging between USD 4 billion and USD 6 billion).
- The shortage of diesel oil and liquified gas in Argentina had a profound impact on the mobility of private vehicles, passenger and cargo transportation, and economic activities. Due to sanctions against Russia, the price of oil in Argentina rose from USD 68 per barrel in 2021 to USD 100 per barrel in 2022. The price of liquified gas imported to Argentina rose from USD 8 in 2021 to USD 40 in 2022. Argentina's state-owned oil company purchased diesel from the spot market due to high demand and the national government's import subsidies that were offered to maintain the prices of electricity and gas.
- The rate of increase in fuel prices was between 12% and 20% in the City of Buenos Aires. In June 2023, the rate averaged 14.3% throughout the country in the case of the common variety and 17.7% for the premium variety. The consumer price index (CPI), taking into account the electricity and gas rates for the middle and upper income groups, rose by at least 16.5% due to a shortage of diesel. This situation put farmers in a tough spot as fuel is required to harvest and transport most crops. Hence, indefinite strikes have been conducted in the country due to the shortage of fuel.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Consumer expenditure surged by 35.83% in 2022 amid rising commodity prices from the Russia-Ukraine War
- Construction and manufacturing sectors drove the economy, with one of highest recorded GDP growth rates during 2017-2022
- Online purchases made via mobile phones are estimated to reach 64% by 2025 from 55% in 2021
- Argentina anticipates exports to reach USD 41 billion by 2030, driven by increased fuel exports
- Argentina ranks 73rd in the LPI, and investing USD 220 billion in opportunities and infrastructural plans
- The mining sector received a boost, with over USD 370 million in investments in 2022, led by private investors
- Shortage of fuel due to the Russia-Ukraine War and increase in biodiesel prices were the major drivers of inflation
- In March 2022, the government launched the Productive Argentina Plan 2030 to boost the manufacturing sector in the country
- Argentina aims for zero gas imports by 2030, which is in line with the National Energy Transition Plan 2030
- Argentina joined China's Belt and Road initiative, securing access to over USD 23 billion in investments
