Market Trends of chile freight and logistics Industry
Chile's transport and storage sector made a strong recovery with 18% growth in 2021, fueled by maritime services
- The transport and storage sector steadily recovered in 2021, with a notable 18% YoY growth in its contribution to GDP. In 2022, the sector continued to expand and saw a 3% YoY growth, primarily attributed to the growth in maritime services. The rise in services was primarily driven by improvements in road infrastructure and increased demand for storage solutions.
- Chile's Public Works Ministry (MOP) announced a USD 4.7 billion concessions plan in 2021, under which highway projects would cost around USD 11 billion over the next five years. Other projects include hospitals, airports, cable cars, trams, and re-tenders for groups of jails. For instance, the value of roadwork projects over the five years exceeded USD 11 billion. The re-tenders for Routes 78 (USD 892 billion) and Route 68 (USD 903 billion) are the highest-value initiatives in the portfolio of public tender for the growth and development of the logistic infrastructure.
- The "Chile Over Rails" initiative encompasses a comprehensive plan comprising 27 projects to be implemented by 2027, with a combined investment of USD 5 billion. These projects aim to modernize passenger and freight railway infrastructure managed by the Chilean Railways Company, Empresa de Ferrocarriles del Estado (EFE). The overarching objective is to triple annual ridership to 150 million passengers and double the freight transportation volume by 2027. Among these projects is the Alameda (Santiago) Melipilla Railway, which opened for bidding in June 2021 and entails a USD 1.5 billion investment for a 37-mile track extension, anticipated to be finalized by 2025.
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Chile proposes mitigating fuel hikes by doubling stabilization fund to USD 1.5 billion
- The price of diesel in Chile increased by 36% in 2022, compared to 2021 and reached USD 0.84/liter due to fluctuations in the international demand for distillate fuels and restrictions on the supply side. Gasoline Prices in Chile remained unchanged at 1.42 USD/Liter in August 2023. As of March 2022, the average diesel price in Chile was reported at 1.15 USD per liter. Chile reported one of the highest gasoline prices in Latin America and the Caribbean, with an average price of 1.58 USD per liter in June 2023.
- Due to its small oil production, the South American countries are extremely vulnerable to changes in the price of oil on the world market. Chile's crude oil imports were reported at 145.547 barrels/day in December 2022 a decrease from the previous number of 164.159 barrels/day for December 2021. After oil prices rose sharply due to Russia's invasion of Ukraine, the Chilean government proposed doubling the size of a fund that helps cushion fuel price spikes to USD 1.5 billion. Despite the struggling economy and rising inflation, the government promised to increase social programs while exercising fiscal restraint.
- In 2021, the Chilean Ministry of Energy passed the country's first energy efficiency law, Law 21305-2021, which impacts construction, housing, heating, and transportation. The Ministry of Energy established interoperability standards for electric vehicle (EV) charging infrastructure and designated hydrogen as an official fuel source. Chile has ambitious EV sales targets of 100% zero-emission technologies for light- and medium-duty vehicles, urban buses, and large machinery by 2035.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Population growth is expected to reach 19.46 million by 2030, with a gradual increase to 20.32 million by 2050, affected by a low fertility rate
- The oil and gas, mining, and quarrying sectors are the largest contributors to Chile's economy, with high volumes of exports
- Digital projects such as the Chile Digital 2035 strategy and the Brecha Digital Cero plan are expected to help e-commerce grow
- Chile strives toward low-cost green hydrogen exports by 2040 under its ambitious national hydrogen strategy
- Diesel and gasoline prices increased in 2021, along with ongoing driver shortages, leading to increasing truck operational costs
- Chile's logistics performance declines, which ranks 61st in LPI 2023, due to international shipment challenges
- Increasing trade and oil imports driving market growth across modes of transport
- Hinterland connectivity expansion required to boost Chile's maritime network and trade volumes
- Increase in sea, air, and land freight costs owing to rise in fuel rates, adverse economic conditions, and a lack of economical solutions for transport
- Chile invested USD 8 billion in infrastructure to boost its economy through public-private partnerships (PPP)
- Chile anticipates being the frontrunner in green hydrogen with an annual output of 1.6 million tons by 2040
- Supply chain disruptions, increased costs of food and raw materials, and rise in mining and input prices accelerated consumer and producer prices
- The government launched the “Chilean Technology Working Group” to boost the manufacturing sector in the country
- Chile recorded 23% growth in dairy imports in 2022 with United States, European Union, and New Zealand among leading suppliers
- The demand for commercial and electric vehicles is rising in the country, led by Scania and Mercedes Benz trucks
- Through its national electric mobility strategy, Chile has set forth the target of transitioning road freight transport to 100% ZEV by 2045
- Capacity expansions at the Port of San Antonio and Valparaíso are enhancing foreign trade capabilities
- Dock worker strikes in 2022 severely affected Chilean ports and the international supply chain
- Capacity expansion investments across sea, rail, and road transport are expected to drive growth during 2023-2030
