Market Trends of Brazil 3PL Industry
Increasing Freight Trucking Driving the Market Growth
In 2023, Brazil has more than 4.2 million truck drivers and nearly 2 million kilometers of roads. In addition, the country has one of the world’s largest road logistics networks, and the flow of trucks is witnessing significant growth. Also, according to the Brazilian Association of Highway Concessionaires (ABCR), in the past two decades, the truck traffic in the country increased by more than 60%, and most of the goods in the country are traded via highways.
Moreover, Brazil has a network of more than 1.7 million km of federal roads, the fourth-largest system in the world after the United States, China, and India, and it relies on its highways and backroads for the transportation of 90% of its ton-mile cargo nationally, using rail for less than a tenth. Hence, trucking haulage plays a vital role in the growth of the 3PL market in the country.
Meanwhile, Brazil’s trucking sector is moving towards energy efficiency to reduce carbon emissions and improve air quality by taking initiatives such as replacing older trucks, improving fuel economy, and investing in rail and roads. Moreover, in 2022, heavy trucks accounted for more than half of all new trucks registered in Brazil, with more than 65 thousand units, followed by semi-light trucks, medium trucks, etc. Thus, the increasing trucking freight further drives the third-party logistics market in the country.
E-Commerce Growth Fueling the Logistics Sector
Brazil is the largest and most populated country in Latin America and is continuously experiencing rapid growth in e-commerce expansion in the country, with a more than 16% year-on-year growth rate in 2021. In addition, as per industry experts, the Brazilian e-commerce market is expected to grow by more than 90% by 2025. In addition, Brazilians embrace special promotions and offers provided by e-commerce platforms, thus creating new opportunities for online stores to explore new initiatives to attract customers’ attention.
Moreover, the pandemic has driven the bolstering growth in online purchases. The Brazilian government issued pandemic relief via digital wallets, further resulting in increasing e-commerce sales in the country. In addition, despite the functioning of brick-and-mortar stores after the pandemic in the country, the notable population in Brazil preferred online retail channels in 2022. For instance, in 2022, the number of online shoppers’ number reached nearly 108 million, up by more than 24% when compared to 2021 (with 87 million online shoppers).
Meanwhile, online sales accounted for more than 10% of all retail sales in Brazil; this is twice as much as the nearly five percent share observed three years earlier in 2018. The pandemic accelerated the e-commerce sector further requires a huge network of third-party logistics to meet the growing consumer demand from online channels.
