The Colombian third-party logistics (3PL) market is anticipated to register a CAGR of 4.75% during the forecast period. Colombia is home to an exciting domestic economy, focusing on international markets and foreign trade. Open, transparent, and ready-to-trade are the three cornerstones of the Colombian economy. Additionally, Colombia´s strategic geographical location offers great advantages for logistics services, which lowers costs and reduces the time of deliveries.
Colombia is regionally the major focal point for overall logistics activity among the rest of South American countries. The high production of both agricultural products and oil, gas, and petroleum products is expected to drive the logistics activity in these countries.
Project logistics grows in the region due to the increasing construction of oil and gas projects and government initiatives to improve the countries’ infrastructure. Additionally, regional SMEs, along with companies like Amazon and eBay are propelling the e-commerce growth in the region.
Road freight transport is the dominant mode of transportation in these countries. The logistics landscape in the region is becoming more competitive, with international players expanding into the region with strategies, such as acquiring local companies.
Logistics firms involved in the movement, storage, and flow of goods have been directly affected by the COVID-19 pandemic. The pandemic has affected e-commerce fulfillment services provided by 3PL operators worldwide as well. Like the tendency of freight trips by road, freight volumes transported by air diminished during the pandemic (i.e., March and April 2020) in comparison to the volumes observed in the same months in 2019. Overall, the amount of air cargo decreased in all cities. Bucaramanga, Barranquilla, and Pereira reported minimal movement of air cargo during March 2020, while Bogotá, Medellín, Cali, and Cartagena presented reductions between 40% and 70% in March 2019. Cargo volumes transported by trucks during the mandatory quarantine also exhibited a decrease, mainly explained by lower transport flows of non-essential goods.
Key Market Trends
Rising investment in Transport and Logistics Sector
Colombia has made considerable progress in expanding its air and maritime port capacity, while the country’s ambitious road-building program appears to be back on track after a series of delays. Additionally, the government has sought to overhaul the industry’s legal framework to facilitate private investments, while municipal authorities have improved urban and rural mobility.
Nevertheless, the progressive integration of Colombia into the international economy and the development of sophisticated global value chains have placed a strain on the country’s transport system. Insufficient levels of historical investment, rising demand from both businesses and consumers, and the nation’s rugged geographical terrain have resulted in a significant infrastructure gap. The government aims to lessen the gap and facilitate economic growth.
According to the Ministry of Transport (MoT), the movement of goods within the country largely takes place via road, with 73.2% transported in this manner, followed by rail (25.5%) and river (1%). While investment in the sector has been rising, this has not been uniform across the segments.
According to the National Roads Institute (Instituto Nacional de Vías, INVÍAS), USD 2.3 billion was invested in the country’s road infrastructure between 2010 and 2018. However, it is estimated that a further USD 13.7 million will need to be invested in the segment by 2025.
E-commerce driving the market
E-commerce in Colombia has experienced an atypical growth compared to a common trend observed in Latin America in recent years. As a result, Colombia can be seen as a late starter in transactional and connectivity growth. However, its market has been evolving rapidly due to government policy, banking penetration, and individual efforts to create trust in the E-commerce sector. With a promising market, Colombia may be set to outpace the development of pioneering Latin American countries such as Brazil.
Colombia is currently the fifth largest e-commerce market in Latin America and the only country in Latin America with a Ministry of E-commerce, making it clear that the market is a priority for the government. Colombia is also the 31st largest market for E-commerce, with a revenue of USD 4 billion in 2019, placing it ahead of Chile and behind the United Arab Emirates.
In 2019, multimedia products, household items, and fashion pieces generated the largest revenue in online sales. However, the demand for food and beverages has shown faster growth with the onset of online food delivery. An example of such a trend is Colombian on-demand delivery company Rappi, which has become a key player in transforming these e-services. The company has managed to overcome some of the main logistical and efficiency challenges that had previously hindered the development of this segment in the country.
Given the growing importance of e-commerce and the companies leading its evolution, local stores, such as Grupo Éxito, the leading retail chain in Colombia, have been allocating greater resources into their digital channels.
The market studied is competitive and fairly fragmented, with many local and few international players, such as Kuehne Nagel, Servientrega SA, OPL Carga SAS, and Deutsche Post DHL, among others.
The trend toward outsourcing logistics services is significant. Moreover, it may continue to increase, even though it is imperative to recognize that the percentage of logistics outsourcing in Colombia continues to be low compared to the proportions handled in Europe and North America. In this sense, leaders in this business are working hard to seek to streamline the process.
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Table of Contents
1.2 Scope of the Study
4.2 Impact of COVID-19 on the Market
4.3 Insights on E-Commerce Fulfillment and Last-mile Delivery Market
4.4 Brief on Key Logistics Hubs in Colombia
4.5 Market Dynamics (Drivers, Restraints/Challenges, and Opportunities)
4.6 Industry Attractiveness - Porter's Five Forces Analysis
4.6.1 Bargaining Power of Buyers/Consumers
4.6.2 Bargaining Power of Suppliers
4.6.3 Threat of New Entrants
4.6.4 Threat of Substitute Products
4.6.5 Intensity of Competitive Rivalry
5.1.1 Domestic Transportation Management
5.1.2 International Transportation Management
5.1.3 Value-added Warehousing and Distribution
5.2 By End User
5.2.2 FMCG (Fast-moving Consumer Goods) - (Includes Beauty and Personal Care, Soft Drinks, Home Care, etc.)
5.2.3 Retail (Hypermarket, Supermarket, Convenience Stores, and E-commerce)
5.2.4 Fashion and Lifestyle (Apparel and Footwear)
5.2.5 Technology (Consumer Electronics and Home Appliances)
5.2.6 Reefer (Fruits, Vegetable, Pharma, Meat, Fish, and Seafood)
5.2.7 Other End Users
6.2 Company Profiles
6.2.1 Kuehne Nagel
6.2.2 Servientrega SA
6.2.3 OPL Carga SAS
6.2.5 Colvanes SAS
6.2.6 Coordinadora Mercantil SA
6.2.7 Blu Logistics Colombia SAS
6.2.8 TCC SAS
6.2.12 EGA - KAT
6.3 Other Companies
A selection of companies mentioned in this report includes:
- Kuehne Nagel
- Servientrega SA
- OPL Carga SAS
- Colvanes SAS
- Coordinadora Mercantil SA
- Blu Logistics Colombia SAS
- TCC SAS
- EGA - KAT