Market Trends of Latin America Air Freight Industry
Growth of E-commerce increase the transport service
As per a recent report by DHL, cross-border e-commerce is one of the major opportunities for logistics providers due to the lower density of physical retail space, limited product availability, high penetration of smartphones, and purchase savings throughout the region. The industry continuously innovates to leverage the latest technologies and develop fraud protection solutions and authentication technologies that allow key players, merchants, and banks to identify online shoppers by leveraging solutions such as biometric data for identity authentication. Several factors are behind this growth, the most important being the large numbers of millennials making purchases and the massive proliferation of smartphones.
In Latin America today, social commerce is starting to overtake e-commerce. More than half of the Latin American shoppers polled in Brazil, Colombia, and Mexico engaged in social commerce. Comparing social commerce to traditional e-commerce, such as official corporate websites or marketplace websites like Amazon, Rappi, or MercadoLibre, the latter is gaining ground in Latin America.
The increased selection of payment options was cited by more than 40% of customers from Brazil, Colombia, and Mexico as a key advantage of social commerce. Nearly one-third of social commerce transactions in Argentina, Colombia, and Mexico involved currency coupons obtained from convenience stores. This demonstrates that, in addition to relying on bank transfers, cards, and PayPal, even tech-savvy social media users favor cash as their preferred payment option.
Brazil Evolving as an Important Market for the Growth in the Air Freight Industry
Brazil's assistance of air cargo through its customs and border regulations ranks 52nd out of 135 countries in terms of the E-freight Friendliness Index (EFFI) globally. The air cargo transportation market has grown considerably in the country due to its various benefits, such as greater speed and safety in the movement of products inside and outside the country.
The Brazilian aviation industry is a top 10 export destination for U.S. aerospace products. Brazil has the 5th largest airspace in the world and is one of six countries globally that manufactures commercial jets. Aerospace products and parts are the second-largest sector for U.S. exports to Brazil. U.S. companies exported USD 6.808 billion in 2022, a nearly full recovery from the pre-pandemic high of USD 7.021 billion in 2019.
In addition to being an attractive destination for U.S. exports, in 2022, Brazil was also the largest South American source of Foreign Direct Investment (FDI) into the United States, according to SelectUSA, the U.S. Government’s investment promotion program. Additionally, the U.S. Bureau of Economic Analysis indicates that the Brazilian stock of job-creating FDI in the United States stood at USD 30.6 billion in 2022 when measured by the market of the ultimate beneficial owner or UBO.
One of the key advantages of air freight is its dependability. Even though weather conditions can affect flight schedules, the availability of daily flights makes it simple to board the following trip. Consolidating shipments might be assisted by a knowledgeable air freight forwarding business. Combining airport terminal pickup, customs brokerage, cargo delivery, and affordable air carrier rates can help simplify logistics administration. Vendors can then concentrate more on expedited shipping in this fashion.
