Mexico 3PL - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2020 - 2029

The Mexico 3PL Market size is estimated at USD 18.55 billion in 2024, and is expected to reach USD 23.38 billion by 2029, growing at a CAGR of 4.92% during the forecast period (2024-2029).

The market is driven by the increase in trade flows, domestic and international, in the country. Furthermore, free-trade agreements and the supply of pharmaceutical products are propelling market growth.

Key Highlights

• The nearshoring trend and the penetration of e-commerce in Mexico have resulted in an unprecedented increase in logistics activity. The geographic location of Mexico and its significant installed manufacturing capacity have been the primary drivers of a shift in supply chains from Asia. The country is not only the United States' most important trade partner, but it also has a significant presence in several industries. This increased activity has fueled the demand for more dynamic logistics services, the majority of which are fueled by technology. Companies that embrace such understanding quickly will be able to seize market share and become relevant players.
• The growth in the market is driven by the increasing trade flows, which are not only from one region to another but are more decentralized and fragmented. This factor is expected to intensify the complexity of logistics activities in the forecast period. The evolution of supply chains is also subject to changes in consumer habits, driven further by the emergence and increasing acceptance of e-commerce, leading the supply chains, which are more flexible and adapt to the demands of the new consumers. The approval of the United States-Mexico-Canada Agreement (USMCA) has brought about changes in Mexico in terms of globalization and logistics integration, as well as in the role of logistics operators, shortly.
• Mexico is the second largest pharmaceutical market in Latin America and shares a border and free-trade agreement with the United States, the largest healthcare market globally. In August 2022, the National Chamber of the Pharmaceutical Industry of Mexico (Canifarma) forecasted a growth of 36% in pharmaceutical production in 2022, the first year of double-digit growth within the last decade. Investments from international pharmaceutical companies are expected to increase.
• Top management at TRAXIN understood this mindset long before the COVID-19 pandemic was declared. The company was well-prepared and positioned to capitalize on the opportunities presented by the contingency. A key is an asset-light approach combined with cutting-edge technology. This entails conducting business with the help of third-party assets. It is not an easy task because businesses must ensure high-quality services and, as a result, carefully select the right suppliers while taking into account a number of different variables that could potentially affect the outcome. TRAXPORTA, an internally developed App that connects shippers and carriers, creating an efficient marketplace for road cargo, is one of the most promising business lines currently expanding. Shippers enter their loads into the app, and carriers select the shipments that best match their capabilities.

3PL Mexico Market Trends

The United States-Mexico-Canada Agreement (USMCA) Increasing the Bilateral Trade is Driving the Market

The US-Canada-Mexico Agreement provides a solid foundation for strengthening North American production, but reshoring to Mexico will not occur without careful policy implementation. Under the first pillar, Building Back Together, the United States and Mexico committed to strengthening critical semiconductor and information and communication technology supply chains centered in China and Taiwan, as well as promoting bilateral trade, in part by establishing the Supply Chain Working Group. Promoting investment in semiconductors in North America appears to be a logical response to Asia's overreliance. It is more difficult to transition from theory to practice.

Under the USMCA, trade recovered from pre-COVID levels, with an average 6% increase across the region from 2019 to 2021. To put this in context, a record 75% of Canadian and Mexican imports came from the US in 2021, making both countries the US's largest export markets. Both are also the US's most important trading partners, accounting for more than twice as much US trade as China. In terms of controversies, the USMCA is off to a fast start, resolving far more trade-related disputes in two years than its predecessor, the North American Free Trade Agreement. This is evident in the labor sector, where the USMCA's new Rapid Response Mechanism (RRM) has yielded promising early results in favor of collective bargaining rights in Mexico.

The Agreement requires the 3PL service providers to collaborate and increase their connectivity within the country, as well as in North America, for ease of trade. In response to this, DB Schenker and AirBridge Cargo teamed up to improve digital connectivity for air cargo in 2020. Ryder, the leading provider of 3PL solutions in Mexico, announced an expansion of four centers that may function as the operating premises located in key points of the national territory of Mexico, as part of its growth plans and in response to the demand for logistics services from different sectors.

E-commerce and Logistics' Technology Growth in Mexico is Driving the Market

During the pandemic, e-commerce activity increased significantly, particularly in Mexico, where this channel was underutilized. Several stages in the supply chains that served online shopping in Mexico were severely underdeveloped. Such a lag needed to be addressed on multiple fronts, but having modern and robust technological resources was undoubtedly critical to capitalizing on opportunities brought about by increased demand. Technology enhances service quality, expands capacity, and allows for a better understanding of market dynamics.

In Mexico, e-commerce will continue to penetrate and expand. The omnichannel will become more relevant, marketplaces will expand, more small and medium-sized businesses will enter the ecosystem, fintech tools will become increasingly important, and cross-border activity will increase as a result. Technology will continue to play an important role in bringing such things to fruition. Over the last five years, the Mexican retail e-commerce market has grown by 300%, propelling it to 16th place globally, ahead of its neighbor Brazil.

Mexican shoppers' desire for international brands and products is fueling a healthy cross-border market in addition to fueling domestic digital retailing. More than two-thirds (67%) of Mexican online consumers now shop cross-border, and foreign merchants account for 6% of total online sales. As in other countries, the pandemic boosted the e-commerce market in Mexico, creating a million new Mexican online shoppers and increasing user penetration to 74%. In terms of 4PL and 3PL logistics, technology is critical to meeting clients' needs; in fact, it is the backbone of such operations. Many customers from various industries have increased their logistics requirements, while others have arrived in Mexico as a result of the nearshoring trend.

Clients are more seasoned and informed; they expect complete transparency and more complex and advanced solutions. Logistics digitalization is now a reality in Mexico. Logistics, transportation, and mobility are vital to the global economy. It is difficult to comprehend how complicated it is for supply chains to function properly. There are numerous moving parts and several processes that necessitate surgical precision. To summarize, technology is the backbone of modern logistics, and asset-light businesses will unlock greater amounts of value due to extremely low investment requirements.

3PL Mexico Industry Overview

The Mexico 3PL market is fragmented with the presence of a large number of players, including major players like DHL Supply Chain, Traxion, Schneider, Ceva Logistics, and Accel Logistics. The strategic alliances of 3PL service providers in the market are expected to set the tone for the exchange of innovations in supply chains to improve the services provided and adopt and integrate the latest technological solutions. The total visibility of goods in transit, a trend that plans production and distribution according to real demand, is likely to make operations more efficient and profitable.

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• The market estimate (ME) sheet in Excel format
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