In Edition 174 of the magazine Inbound Logistics Latam, Logistics Practice Director at Americas Market Intelligence (AMI), Diego Rodríguez, outlines what the regional logistics industry needs to focus on for the remainder of the year, and why. What follows is an English version of his original analysis entitled “Tres factores a monitorear en el sector logístico en América Latina en la segunda mitad de 2025.”
A PDF copy of this edition of the magazine is available in the link below, in the original Spanish version. Diego’s piece is on page 26.
Three Factors to Watch in Latin America’s Logistics Sector in the Second Half of 2025
Diego Rodríguez Paez
Director of Logistics and Industry Practice
AMI
International logistics is experiencing a period of unprecedented disruption, marked by global risks that are having direct repercussions on Latin American supply chains. The region, whose logistics market is projected to reach US$283 billion in 2025, is constantly grappling with external and internal factors holding back its growth.
In this article we look at three global risks impacting logistics in Latin America. We then offer recommendations to help industry professionals effectively mitigate these threats.
Container Ship Capacity Expands While Rates Drop
The shipping industry is entering a period of overcapacity. In 2021 and 2022, spurred on by record-breaking rates following the impact of the pandemic, shipping lines ordered a wave of new container ships. In 2025, that capacity is coming onto the market. Global container tonnage grew by 10% in 2024, and another increase of around 6% is expected in 2025, equivalent to roughly 1.8 million additional TEUs, according to Hillebrand and Gori.
Overall, global capacity could expand by a further 9–10% in the short term, according to a report by AlixPartners. This is well above the forecast trade demand growth, which Maersk claims could even contract by 1% in 2025, due to the trade war.
This mismatch between supply and demand signals a downward trend in ocean freight rates. While it benefits Latin America’s importers and exporters in terms of more affordable costs, it could also mean that shipping lines operating Latin American routes (including global giants like MSC, Maersk, or Hapag-Lloyd) will reconfigure their routes to avoid idle ships. A recent example is the new Gemini alliance between Maersk and Hapag-Lloyd (launched in 2025) that will operate under a hub-and-spoke model, which, according to both companies, could achieve 90% efficiency, far exceeding current container logistics models.
For Latin America, the increased capacity also means that countries and ports that are unable to accommodate larger ships will begin to be served by feeders. This poses operational challenges given the limited capacity of feeders in the region.
In addition, the Panama Canal expansion now allows the passage of vessels up to ~15,000 TEUs, paving the way for new Asia–Caribbean–South America rotations with larger ships. The challenges persist, however: ports with insufficient draft, outdated equipment such as cranes that need replacing, landside congestion, etc., which will continue to hamper the efficiency of port activities. Shipping lines could redirect surplus vessels to secondary services, intensifying competition on intraregional or secondary routes.
Logistics Infrastructure: Throttling the Potential of Emerging Opportunities
Latin America has longstanding structural challenges in its logistics sector that exacerbate its vulnerability to external risks. The region’s efficiency in logistics lags behind the emerging Asian economies. None of the Latin American economies rank among the top 50, according to the most recent data from the World Bank’s Logistics Performance Index (LPI, 2022). The top Latin American country, Brazil, is in 53rd place.
The two greatest challenges for Latin America can be viewed as:
Structural Issues
The region has an underdeveloped road and rail network, together with low-capacity ports. There is also limited space at key transshipment hubs like Kingston and Cartagena, given that clients are asking the shipping lines to keep their containers at these ports in the hope that United States’ customs tariffs might change at some point. Additionally, there is a considerable number of small logistics operators, each with their own processes and requirements, which prevents standardization. All of this creates the infamous bottlenecks that delay logistics operations and raise their costs. In fact, freight transportation processes happen to be significantly more expensive in Latin America than in markets like Asia.
Lack of Innovation
Latin America is awash in a sea of customs red tape. Processing is often efficient, with inadequate digital infrastructure, leading to frequent human error, especially in cross-border operations. This is compounded by legal incompetence, a lack of satisfactory laws for the sector, and poor coordination between the public and private sectors. Some organizations have attempted to address this. One such example is CAF-Banco de Desarrollo de América Latina, author of the Latin America Logistics Profile (PERLOG), an analysis for the development of logistics based on regional cooperation. In its first stage (2014), it involved eight countries: Mexico, Panama, Colombia, Ecuador, Peru, Bolivia, Paraguay, and Uruguay. Other initiatives include the Bioceanic Corridor, a route stretching from Brazil to Peru.
In the private sector, Latin American countries are taking proactive steps. Logistics startups have been actively promoted in Mexico, Brazil, and Chile, offering value-added services and attracting venture-capital investments to modernize the legacy supply chain. Examples include Nowports (Mexico) and Nuvocargo (U.S./Mexico).
Lastly, large 3PL operators like DHL, Kuehne+Nagel, UPS, and others, are expanding their presence in Latin America, introducing best practices and exerting pressure on local operators to innovate.
Trade War with the U.S.: Repercussions on Regional Trade
The third threat on the regional logistics horizon stems from the sphere of geopolitics and trade: tariffs imposed by the Trump administration.
The implications of a trade conflict of this magnitude would be profound. Mexico is enormously reliant on the American market: approximately 83% of its exports are to the U.S., totaling close to 490 billion dollars in 2023 (nearly 30% of its GDP). For now, provisions in place under the USMCA protect much of the cross-border trade, with a couple of exceptions:
- Steel and aluminum: subject to a 25% tariff, even under the USMCA.
- Automobiles: vehicles assembled with at least 85% of their components manufactured in the United States are not subject to any tariffs.
Moving beyond the macroeconomy, we can expect severe impacts on jobs (with potential layoffs in export industries), on foreign investment (the nearshoring boom might stall), and on North America’s integrated supply chains.
The uncertainty has already led businesses and authorities to consider contingency strategies. One of these is to step up the pace of regional integration in order to be less reliant on volatile markets. One key sector in this regard is food and beverages, whose intraregional trade is a mere 22% (in contrast with 45% in the Asian economy). AMI analyses point to Colombia, Guatemala, and Dominican Republic as potential regional distributors. The Pacific Alliance or the Mercosur–Central America project could in turn gain renewed momentum.
The trade war will also have immediate repercussions in terms of the U.S.–Mexico border. The reorganization of global supply chains to avoid tariffs is already affecting decision-making about the leasing of new spaces in Monterrey, Tijuana, Ciudad Juárez, and Mexico City. Warehousing fees are expected to fall as vacancy rates rise.
In any event, the crisis would force a reconfiguration of regional supply chains. We may see U.S. manufacturers reshoring the production of critical inputs or diversifying toward other markets once again if costs in Mexico become too high. South America could assume new relevance as an alternative market for European exporters.
Strategic Prospects and Recommendations for the Logistics Sector
The outlook we have just described is a combination of immediate threats and structural challenges. Against this complex background, logistics companies in Latin America need to develop a resilient, proactive strategy. Presented below are some key recommendations:
- Diversify routes. It is essential to have contingency plans in place for diversions or cutbacks in ocean or air route capacities. We need to look at alternative ports, secondary transportation modes (e.g., regional road or rail), and maintain buffer inventories to contend with delays.
- New contracting systems. With an anticipated oversupply of shipping capacity, ocean and air freight rates could fluctuate significantly. Exporters and importers need to reassess their carrier contracting strategies: combining long-term fixed-price agreements (to secure capacity on critical routes) with exposure to the spot market (to benefit from intermittent rate decreases). It is also worth exploring alliances with digital forwarders or logistics marketplaces that offer quotes from multiple providers in real time in order to choose the best options at a given moment.
- Operational efficiency is crucial for logistics operators to survive amid narrower margins. They need to invest in route optimization, carry out preventive fleet maintenance (to reduce downtime costs), and incorporate management technologies (e.g., TMS, WMS).
- Adoption of technology. Visibility is indispensable in turbulent times. Using artificial intelligence to improve data analytics can help forecast demand and identify inefficiencies. Adopting integrated systems that connect providers, operators, and customers on the same platform can in turn facilitate decision-making. For example, smart monitoring can enable transportation companies to reduce fuel usage by up to 20%.
- Defensive commercial strategy. Companies that are overexposed to the U.S. market will have to diversify their portfolio of customers and providers. A cross-border carrier might expand its services within Mexico or toward Central America; while a freight forwarder could begin serving South American intraregional flows, etc. This diversification would reduce their reliance on a single vulnerable market.
- Business intelligence. Logistics operators must anticipate demand. If a large shipper is planning to relocate part of its production, the operator should facilitate that change by offering capacity on the new route or handling the logistics of their machinery removals. At the same time, they can explore the resulting new business opportunities: if tariffs do materialize, this will increase demand for customs advisory services, bonded warehousing, country-of-origin labeling, and other areas where logistics companies can add value.
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