Four Key Verticals Driving Growth in Latin American Logistics

Latin America’s logistics market is estimated to have reached $360 billion in 2024, with a 6.6% annual growth rate projected from 2025 to 2030. Yet the success of regional trade ambitions will depend heavily on tailored logistics strategies that meet evolving demands.

Key areas of focus include cross-border trucking, ocean services, cold chain logistics and digital platforms. Some markets are more promising than others. Brazil, for instance, is rapidly positioning itself as an e-commerce hub, while Mexico is ramping up new facilities to support its growing manufacturing sector.

Four crucial sectors are sparking growth in Latin America’s logistics industry’s strong growth over the next five years.

Food 

Looming 25% tariffs on goods moving into the U.S. from Latin American countries, particularly Mexico, have introduced uncertainty to established trade flows. As a result, the shift of food exports to other regional markets could offer suppliers a competitive edge, reduce their dependency on U.S. trade, and reinforce intra-regional supply chains.

Despite Latin America’s vast agricultural resources, intra-regional trade in the food and beverage sector remains underdeveloped. It accounts for just 22% of total trade, compared with nearly 45% in Asia. This disparity presents a significant growth opportunity for countries such as Mexico and Colombia to expand their presence in regional markets and build more resilient trade networks.

Logistics, however, remains a key challenge. Most supply chains in Latin America are designed for east-to-west and north-to-south trade routes, making intra-regional distribution complex and inefficient. Additionally, while governments promote exports, restrictive import policies and regulatory inconsistencies hinder smoother trade between neighboring countries.

As Latin American nations look to strengthen their food trade networks, overcoming these logistical and regulatory obstacles will be critical. Below is a breakdown of the value of food exports from Colombia and Mexico to their key trade partners: 

Automotive 

Mexico is cementing its position as Latin America’s automotive leader, with a projected $303 billion market size in 2025. The country is also seeing the highest growth rate in logistics spending within the automotive sector, with a 6% compound average growth rate from 2023 to 2025. As Mexico supplies approximately 40% of automotive parts for U.S.-made vehicles, the industry is highly dependent on cross-border trade.

However, the threat of 25% tariffs on imports from Mexico could disrupt existing supply chains, forcing companies to seek alternative logistics strategies.

Beyond Mexico, Argentina, Brazil and Colombia are also key players in Latin America’s automotive sector. Argentina has the highest logistics spending share, with 17% of total automotive sales allocated to logistics costs. Meanwhile, Colombia remains the most lagging market, despite having an automotive market with an estimated value of $1.2 billion and only $168 million dedicated to logistics spending within that industry.

The region’s ability to adapt to shifting trade policies and invest in logistics efficiency will determine its long-term competitiveness.

Fashion

Brazil is emerging as Latin America’s dominant force in fashion logistics, with $73 billion in total sales projected for 2025, the largest in the region. The country also boasts the highest growth rate in logistics spending within the fashion sector, with a projected 8.6% CAGR from 2023 to 2025, driven by the rapid expansion of e-commerce.

Brazil, known for its strong textile and garment industries, has an opportunity to leverage its logistics advances to expand its presence in the U.S. market. As businesses seek alternatives to Chinese goods, Brazil could position its products as a competitive option, strengthening its foothold in global fashion trade.

Efficient distribution networks are becoming crucial. Companies are investing heavily in logistics to meet growing demand.

In 2024 alone, Brazil’s logistics spending in fashion grew by 12%, reinforcing the need for automation and predictive supply chain management.

Pharmaceuticals

Latin America’s pharmaceutical logistics sector is experiencing steady expansion, driven by rising healthcare demand and the need for advanced supply chain systems. Brazil leads the region in logistics spending, projected to reach $3.7 billion by 2025, followed by Mexico at $2.8 billion. Meanwhile, Colombia stands out with the fastest growth rate, reaching an 8.14% CAGR from 2023 to 2027.

Pharmaceutical logistics requires strict temperature-controlled storage and efficient transportation networks to maintain product integrity. While Brazil has a strong logistics infrastructure, it remains an underutilized market for international pharmaceutical manufacturers, as domestic companies continue to dominate.

Argentina presents an interesting case, as its pharmaceutical logistics spending has grown at a 4% CAGR since 2018, making it one of the few industries in the country experiencing consistent expansion.

With healthcare needs increasing across the region, enhancing cold chain logistics and expanding distribution networks will be key to ensuring pharmaceutical supply chains can meet future demands.

Latin America’s logistics landscape is evolving rapidly, with these four key sectors driving the next wave of growth. While opportunities are abundant, the region still faces significant challenges, including regulatory barriers, infrastructure gaps, and supply chain inefficiencies.

Mexico and Brazil are among those countries making substantial investments in logistics infrastructure to support their growing industries, while Colombia and Argentina are working to close the gap.

As trade policies shift and new logistics strategies emerge, businesses operating in Latin America must adapt quickly to remain competitive. Those who invest in efficient supply chains, automation, and regional trade connectivity will be best positioned to thrive in the years ahead.

Diego Rodríguez is director of logistics practice with Americas Market Intelligence.