Market Trends of mexico courier, express, and parcel (cep) Industry
Mexico's transportation and storage sector growth with 18.97% YoY in 2022, fueled by infrastructure investments
- Mexico's economy, valued at USD 1.3 trillion, is the second-largest economy in Latin America and the 15th-largest in the world. In 2022, the transportation and storage sector experienced a substantial 18.97% YoY growth from the previous year, driven by increased investments, exports, and the overall expansion of the economy. There are 102 ports along Mexico's 7,145-mile coastline and 15 out-of-port terminals. The Mexican Government is working to modernize the railroad of the Isthmus of Tehuantepec, expand cargo handling and storage capacity at the ports of Coatzacoalcos, Veracruz, and Salina Cruz, Oaxaca, and expand the trans-isthmus highway from two to four lanes.
- The manufacturing industry faced challenges in 2021 due to raw material shortages, global logistics bottlenecks, and high raw material costs, which impacted the trucking industry's growth. In 2022, the manufacturing industry experienced accelerated growth in all sectors. Imports of intermediate and capital goods, fixed investment in machinery and equipment, output levels, and exports of manufactured goods all saw significant increases compared to the same period in 2021.
- The transportation and warehousing sector had a GDP of MXN 1.84 trillion (USD 0.094 trillion) in the third quarter of 2022, an increase of 0.62% from the previous quarter and a 21.3% increase from the same period in the previous year. The Infrastructure, Communications, and Transport Ministry and the public and private sectors invested around MXN 768 billion (USD 39.38 billion) in road and rail infrastructure in 2022 to build and modernize railways, highways, and bridges, as well as improve road safety measures in Mexico.
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The Mexican government implemented tax subsidies to tackle inflation, resulting in a USD 4.51 billion loss in 2022
- The Mexican government has resorted to tax subsidies as a measure to mitigate inflationary pressures. These subsidies, specifically in the form of the IEPS (special tax on production and services), resulted in a loss of USD 4.51 billion in 2022. As the global market experienced volatility, oil prices gradually declined toward the end of the year. Therefore, the Mexican government has proportionally reduced its subsidies, considering that fuel prices no longer impose a burden on the population.
- In March 2021, gasoline consumption in Mexico saw 36 consecutive months of decline, registering a drop of 8.5% compared to the same month in 2020. However, the rebound in the price of gasoline meant an increase of 43.9% in real terms. The sale of Magna gasoline in March 2021 was 452,310 barrels per day, 13.4% less than in the same month of 2020, while the sale of premium gasoline was 136,555 barrels per day, an increase of 12.2% YoY, which accumulated 10 consecutive months of sales growth.
- The price per liter of diesel increased by 10.42% from January to June 2020, as it went from USD 1.06 per liter in 2019, sold on average in the same period, to USD 1.17 in the first half of 2020. In 2022, natural gas and electricity prices in Mexico rose as the country approached peak demand. The increase in natural gas prices in the United States will inevitably spread to Mexico's gas and power markets. A weaker-than-expected supply response in the United States, combined with high natural gas demand in both domestic and export markets, is expected to increase the prices further. The US gas market is expected to remain constrained until 2023, resulting in an extended period of high gas price benchmarks for Mexico.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Mexico's population declined by 1.07% in 2022, driven by decreasing birth rates and urban migration
- The agriculture industry and clothing and footwear under the retail and wholesale trade sectors are major growth drivers of the economy
- E-shoppers are anticipated to reach 78 million by 2025, fueled by smartphone adoption and e-payment methods
- Mexico's transportation and storage sector growth with 18.97% YoY in 2022, fueled by infrastructure investments
- Mexico anticipates continuing natural gas imports amidst increased domestic demand and falling production in 2023
- Investment projects worth USD 56.45 trillion to boost the infrastructure sector in Mexico
- The Mexican economy is driven by a surge in retail store launches and booming online purchases
- Mexico's inflation is impacted by the government's changes in taxes and tariffs
- The GVA of the Mexican manufacturing sector grew by over 14% YoY in 2022, led by the food and beverages sub-segment
- Mexico aims to phase out crude oil exports in 2023 to attain domestic self-reliance
- Mexico government invested USD 394 million in boosting its logistic capabilities in 2023
