The movement of goods is booming in Latin America (LATAM) and it is resulting in a significant rise in the number of commercial vehicles being sold in the region. According to consultancy firm Frost & Sullivan, economic growth is driving demand, with annual sales of commercial vehicles expected to top 200,000 units by 2023.
An increase in the “demand for greater transparency, speed and truck capacity optimization” is behind a rise in freight brokerages in emerging markets. The firm cited the rise of opportunities in the LATAM logistics industry due to the technological disruptions leading to increased sales. Policies and new regulations related to commercial vehicles are expected to complement the new business models. Original equipment manufacturers (OEMs) are adapting to the new regulations.
Frost & Sullivan’s Mobility Industry Analyst, Hernan Cavarra, noted the main draws of LATAM for freight and logistics companies. “Mexico, Brazil, Chile, Colombia and Argentina will draw attention to advanced services such as driver behavior management, video safety, and prognostics, mostly for big fleets in emerging regions like Peru and small fleets in the whole LATAM region. We also expect a shift from basic to mid-tier services.”
An economic recovery is seen as happening in Brazil by 2019. The heavy-duty truck (HDT) industry might be one of the first industries to benefit as much of the Brazilian economy is dependent on it as noted previously here at FreightWaves. But for now, what is affecting the industry is the rise in the prices of commodities such as mining ore and oil.
The 2023 forecast that Frost & Sullivan developed is dependent on some issues in the region being resolved. One is the lack of proper infrastructure in some areas. Second is lack of internet connectivity. The latter is seen to impact the logistics companies more as more and more fleets have become dependent on digital communications. While the United States government is preoccupied with getting the trucking companies equipped with electronic logging devices, LATAM-based trucking companies are struggling with choppy internet.
This means that Cavarra’s prediction on the growth of LATAM economy-wise still hangs in the balance. But the optimism in Cavarra is present upon noting in the research that, “Truck digitization will offer new business opportunities for key OEMs in the region. OEMs such as Daimler Trucks, Volkswagen Trucks (MAN & Scania), and Volvo Trucks are expected to invest heavily in telematics solutions oriented toward the further development of the truck-as-a-service (TaaS) model.”
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