The Top E-commerce Delivery Firms You Should Know About in Latin America

The e-commerce market in Latin America has seen substantial year-over-year growth in recent years. In 2022, it experienced a 39% increase compared to the previous year, followed by a 20% increase in 2023¹. This growth can be attributed to shifts in consumer behavior since the onset of COVID-19, with many individuals making their first online purchases during this period. Consequently, there has been a surge in digital adoption, impacting various industries. For instance, in 2022, global parcel shipping volumes reached approximately 161 billion parcels, with expectations of a 59% growth rate by 2027².

The Pandemic also drove merchants to advocate their business for online sales, and it helped launch or cement online startups in the region. Top online sellers include marketplaces, local supermarkets, grocery stores, brand sites, social media, and delivery apps³. Examples of top regional e-commerce players include Mercado Libre, Amazon, Exito, Magalu, Falabella, and Rappi, among others.

With the increasing demand for convenience and instant gratification, retailers must provide reliable, same- or next-day delivery services to meet customer expectations. In this scenario, efficient last-mile delivery services play a crucial role in the success of e-commerce in Latin America.⁴

Understanding the Last Mile Challenge

Last-mile delivery refers to the parcel’s movement from the hub to its destination, usually a personal residence or retail store⁵. This critical component of e-commerce logistics directly impacts customer satisfaction, operational costs, and overall business efficiency. In e-commerce, the last mile represents the most expensive and logistically complex part of the delivery journey, where customers expect fast, reliable, and cost-effective service⁶.

Nevertheless, Latin America’s diverse geographical and infrastructural landscapes present challenges for last-mile delivery services. According to the World Bank’s Quality of Trade and Transport-related Infrastructure Index (2022)⁷, Brazil is the highest-ranked LAC country in the region, scoring 3.2 points (on a scale where one is low and five is high). Traffic congestion also poses significant logistic issues in some major LAC cities, adding extra time and costs. For instance, Mexico City was ranked seventh with the worst traffic worldwide in 2023, closely followed by São Paulo, Rio de Janeiro, and Bogota⁸. The varied terrains and infrastructure disparities create substantial obstacles to achieving seamless and efficient delivery operations.

This can have a significant impact not only on customer experience due to the constant delays but also on the business profitability. After the pandemic, customers increasingly expect same-day or next-day delivery, creating greater pressure on service levels and costs; otherwise, it can result in dissatisfied customers and loss of market share.⁹ Late deliveries, damaged goods, or order inaccuracies tarnish a retailer’s brand reputation, leading to additional costs such as restocking fees. Moreover, the high costs associated with last-mile logistics, where delivery expenses can comprise over 50% of total shipping costs, directly affect business profitability.¹⁰

Top 5 E-commerce Delivery Firms in Latin America

Returning to e-commerce, the main delivery companies in Latin America have not only expanded throughout the region but have also developed various services and technological innovations, as we can see below:

In this competitive market, it is worthwhile to analyze the strengths and unique selling points that allow each player to maintain a dominant position compared to others, without overlooking the weaknesses that reflect the challenges of the last mile, as seen below:

Top 3 Local Last Mile Providers

Beyond these top 5 providers that service a wide variety of markets, it’s also important to highlight local last-mile providers in different countries. To that end, below we highlight 3 important providers in Chile, Colombia, and Brazil, respectively.

Chilexpress

According to a recent investigation conducted by the Chilean National Economic Prosecutor’s Office, Chilexpress is estimated to be the leading company in the last-mile sector with a market share between 30% and 40%¹¹. This company maintains a fleet of approximately 700 own vehicles, connecting around 400 owned branches and 500 independent points for the drop-off and pickup of small loads, as well as 75 regional hubs that allow for cross-docking processes of loads weighing over 100kg¹², Chilexpress utilizes a combination of its facilities, partnerships, and technology-driven solutions to optimize its delivery operations.

Servientrega

Servientrega owns 2000 vehicles, and around 3700 branches. The company has recently invested in cutting-edge solutions such as route optimization algorithms, real-time tracking systems, and digital platforms for seamless delivery management. The company has taken steps to reduce its carbon footprint. These include fleet renewal, along with preventive and corrective fleet maintenance. The company voluntarily offsets its carbon footprint following the Green House Gas Protocol¹³.

Correios Brazil

Correios owns around 6000 branches and 7000 vehicles. The state-controlled postal company is strategically exploring the expansion of air cargo transport to enhance Correios’ efficiency and reduce operational costs compared to other modes. Additionally, it evaluates other business opportunities by establishing partnerships with companies like Embraer, the Brazilian aeronautical company, to acquire aircraft such as the E-190F, E-195F, and C-390 Millennium. These are modified versions of commercial aircraft designed for short-haul cargo transportation.¹⁴

Correios is implementing e-commerce strategies to enhance its operations and competitiveness to compete in the challenging last-mile market, considering Brazil’s growing e-commerce landscape. One pivotal initiative is the implementation of RFID tagging for all parcels to enhance tracking, developed in collaboration with CEITEC, a government institution linked to the Ministry of Science, Technology, and Innovation.

Technological Innovations Driving Last-Mile Efficiency

To enhance last-mile efficiency, e-commerce delivery firms in Latin America have embraced innovative technologies such as artificial intelligence, machine learning, and route optimization algorithms¹⁵. These technologies streamline delivery operations, enhancing speed, accuracy, and cost-effectiveness, ultimately providing a superior customer experience.¹⁶

For example, Treggo, an Argentina-based company, has developed technology to simplify urban shipments in Argentina, Mexico, and Chile for merchants of all sizes. The company offers instant quotes, digitizes the delivery process, and collaborates with Mercado Libre’s Flex Shipping to enable products to be received within just one hour. Treggo’s emphasis on digitizing delivery processes and providing SaaS-like tools to merchants has led to partnerships with thousands of last-mile providers with an expanding customer base in Mexico and Colombia.¹⁷

Similarly, Rappi, has implemented technology-driven solutions to enhance delivery speed, accuracy, and cost-effectiveness. Rappi’s platform utilizes AI and machine learning algorithms to optimize delivery routes, forecast demand, and efficiently allocate resources. The company’s focus on innovation and sustainability has resulted in partnerships with major e-commerce players and a growing customer base throughout the region.¹⁸

Addressing Sustainability and Environmental Concerns

The e-commerce industry in Latin America is taking steps to address sustainability and environmental concerns through various initiatives such as electric vehicles, green packaging, and carbon offset programs. These efforts aim to reduce the carbon footprint of last-mile delivery operations and enhance brand reputation by meeting evolving consumer expectations.

For instance, companies like Mercado Libre, have implemented sustainable practices such as minimizing packaging and using eco-friendly materials¹⁹. Similarly, Melonn, a logistics disruptor in the region, prioritizes sustainability initiatives like reducing carbon footprints and facilitating returns for the fashion industry, particularly in Chile.²⁰

The use of electric vehicles in last-mile delivery is gaining traction in Latin America. Companies like ChileExpress, Servientrega, and Correios Brazil have started using electric vehicles for urban deliveries, aligning with environmental goals and building positive brand images²¹. This move reduces carbon emissions and taps into government incentives, tax credits, and grants designed to promote sustainable transportation.

Green packaging is another area where e-commerce companies are making significant strides. By using biodegradable and recycled materials, these companies reduce packaging waste and promote eco-friendly practices. Additionally, alternative delivery methods like consolidated delivery and drones are being explored to reduce carbon emissions and last-mile costs.

Future Trends and Challenges

To stay ahead of the curve and capitalize on growth opportunities, e-commerce delivery firms are adopting strategies such as expanding their delivery networks, investing in technology, and offering value-added services.²²

Urbanization poses a significant challenge for e-commerce delivery firms in Latin America, as densely populated urban areas can lead to traffic congestion, limited parking, and inefficient delivery routes. Companies are beginning to explore artificial intelligence, machine learning, and route optimization algorithms to address these challenges to streamline delivery operations and improve efficiency.

Regulatory hurdles also pose a challenge for e-commerce delivery firms in Latin America, as governments impose restrictions on delivery times, routes, emissions, working hours, and labor relations. To navigate these challenges, companies are forming partnerships with local governments and regulatory bodies to ensure compliance and maintain a positive brand image.

Conclusion:

In conclusion, the e-commerce delivery market in Latin America is poised for continued growth, with key players such as Mercado Libre, Melonn, and Treggo leading the way in innovation and efficiency.²³ As the region’s digital economy continues to evolve, e-commerce delivery firms will play a critical role in shaping the future of last-mile delivery in Latin America.²⁴

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Sources:

1. AMI, 2023. “Digital Payments and E-commerce in Latin America [2023-2026 data and projections]” ↩︎
2. Portless (April 22, 2024). “The Evolution of Last-Mile Logistics: How The Rise of E-Commerce Reshaped the Industry” ↩︎
3. AMI (November 29, 2023). Major trends among e-commerce shoppers in Latin America” ↩︎
4. TechCrunch (July 22, 2021). “Last-mile delivery in Latin America is ready to take off” ↩︎
5. Onfleet (December 4, 2023). “What is Last Mile Delivery? Everything You Need to Know” ↩︎
6. Forbes (August 26, 2020) “Last Mile Deliveries: Complex, Costly, And Critical” ↩︎
7. Data are available online at: lpi.worldbank.org. Summary results are published in World Bank (2023): Connecting to Compete: Trade Logistics in the Global Economy, The Logistics Performance Index and Its Indicators. ↩︎
8. La República (July 8, 2023) “Dos de las ciudades que tienen el peor tráfico en América Latina están en Colombia” ↩︎
9. DispatchTrack (January 11, 2024). “Impact on Customer Experience” ↩︎
10. Emerging Real Estate Digest (April 27, 2023) “Delivering on Latin America’s Last-Mile” ↩︎
11. La Tercera (January 4, 2023) “Chilexpress, Blue Express y Starken: como funciona el mercado de la última milla según la FNE” ↩︎
12. AMI interview, 2024 ↩︎
13. Protocol for determining, measuring, recognizing, and reducing greenhouse gas emissions into the atmosphere. ↩︎
14. Embraer (April 9, 2024) “Embraer and Correios sign Memorandum of Understanding for optimization studies in air cargo transport” ↩︎
15. Ms Novia (August 7, 2023) “Revolutionizing Last Mile Logistics: Latin America’s Booming E-Commerce Market Takes Center Stage!” ↩︎
16. TechCrunch (July 22, 2021) “Last-mile delivery in Latin America is ready to take off” ↩︎
17. TechCrunch (July 21, 2022). “Treggo, armed with new funds, takes on crowded Latin American last-mile delivery sector” ↩︎
18. AMI analysis 2024 ↩︎
19. Cart2Cart (December 28, 2023). “E-Commerce and Sustainability: Green Practices for Online Retailers” ↩︎
20. Times of India (June 30, 2023). “Sustainable e-commerce: How brands are prioritising environmental responsibility” ↩︎
21. Ufleet (January 18, 2024). “7 Methods for Sustainable Delivery in E-Commerce” ↩︎
22. TechCrunch (July 21, 2022). “Treggo takes on crowded Latin American last-mile delivery” ↩︎
23. RapidPricer (October 4, 2023). “E-Commerce Pricing Strategies Transforming Latin American Retail” ↩︎
24. McKinsey & Company (June 7, 2023). “Logistics Disruptors: Fostering trust in Latin American e-commerce” ↩︎

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