Market Trends of north america same day delivery Industry
Mexico's transportation sector propels GDP with 21.3% surge, initiates USD 39.38 billion investments for infrastructure modernization
- Transportation and warehousing contributed a GDP of MXN 1.84 trillion (USD 0.094 trillion) during the third quarter of 2022, marking a 0.62% quarterly increase and a substantial 21.3% surge compared to the previous year's corresponding period. The Infrastructure, Communications, and Transport Ministry, in collaboration with the public and private sectors, committed investments totaling MXN 768 billion (USD 39.38 billion) in 2022 to enhance Mexico's road and rail infrastructure. This comprehensive effort aims to modernize railways, highways, and bridges while also addressing road safety enhancements.
- The Port Infrastructure Development Program of the Maritime Administration, which the US Department of Transportation announced in 2022, would receive more than USD 703 million to support 41 projects in 22 states and one territory that will enhance port facilities. The funding will help improve supply chain reliability by increasing port capacity and resilience, improving operations, lowering emissions from the port, and creating new employment opportunities for coastal seaports, Great Lakes ports, and inland river ports.
- In North America, the United States is the largest contributor to the GDP of the transportation and storage sector, accounting for 86% of the total North American transportation and storage sector's GDP. The United States contributes six times the combined value of Canada and Mexico. The Canadian government provided an additional CAD 1.9 billion (USD 1.46 billion) to the National Trade Corridors Fund over four years (2021-22 to 2024-25), which may spur investments in much-needed improvements to Canada's roads, rails, and shipping routes, build long-term resilience for the Canadian economy, and support internal trade.
__Share___Of_GDP__North_America__2022.svg "North America Same Day Delivery Market Trends")
Understand The Key Trends Shaping This Market
Download PDF
Low supply and high demand for natural gas in the United States are anticipated to increase natural gas prices
- In 2021, natural gas prices declined by 14.7% YoY. However, in 2022, natural gas prices recorded a YoY growth of 34.3%, and the YoY growth of gasoline prices stood at 2.02% due to high inflation and the Russia-Ukraine War. The supply of crude oil became more constrained, and the gasoline demand increased, which raised the price even higher. The retail diesel prices were predicted to average around USD 4.20/gal in 2023, down by 16% from 2022, and the diesel refining margins in the country were expected to decline by 20% in 2023 and 38% in 2024. The prices are expected to keep dropping in 2024 and average close to USD 3.70/gal.
- The primary driver of high gas and diesel prices is the price of crude oil, which is now 75% higher than in 2021. For instance, in Canada, gas prices jumped by more than 50% in 2021, pushing the cost of a liter to more than USD 1.56 in many parts of the country. Similarly, many western states faced much higher gas prices in the United States because of more limited refining capacity.
- There has been a rapid rise in diesel fuel prices, squeezing freight transportation companies and their customers. The impact is evident more in Mexico, where about 80% of trucks are managed by small trucking companies or owner-operators. The increase in natural gas prices in the United States will inevitably spread to Mexico's gas and power markets. However, Mexico imports 80% of its fuel from the United States. Still, gas and diesel cost less in Mexico because the Mexican government offers subsidies to the trucking industry to offset operating expenses. A weaker-than-expected supply response in the United States, combined with high natural gas demand in domestic and export markets, is expected to increase the prices further.
Understand The Key Trends Shaping This Market
Download PDF
OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Regional manufacturing sector gets a boost with CHIPS and Science Act and Green Manufacturing Initiative
- A rise in gas prices acted as a major catalyst for increased PPI and CPI in the region
- The shift toward Mexico from China is expected to boost manufacturing production in the coming years
- North America aims to domestically produce 25% of its Asian imports to increase regional integration
- Agriculture, Fishing, and Forestry registered good growth during the review period
- The e-commerce industry in North America grew by over 6% YoY in 2022, led by fashion and electronics sub-segments
- National Export Strategy of the US aims to boost regional commerce by strengthening small businesses
- Canada leads in North America region, with 7th rank in LPI fueled by logistics quality and infrastructure growth in 2023
