In early 2008, just before the GFC tsunami hit Latin America, Colombia first made the unofficial ‘investment hot spot’ list. Fuelled by a strong financial system and a growing consumer class, economic activity had increased at an average pace just shy of six per cent between 2004 and 2007.
In fact, the country’s rise only paused momentarily after the Lehman bust and quickly resumed a decent clip, notching a 6.6 per cent gain in 2011 and back-to-back four per cent gains in 2012 and 2013. Consulting firm Fast Market Research is now expecting 4.3 per cent GDP growth for 2014 – an enviable record that has brought South America’s third largest economy back on the investment world map. 
“Colombia is already very much on the move [and] higher world growth will only enhance its prospects,” says Peter Hall, Chief Economist at Export Development Canada, a nation that is actively trying to increase trade in Colombia.
According to Hall, the potential is there, but securing future growth isn't guaranteed. “Currently, the country's infrastructure is constraining growth,” he says, revealing that it is more costly to transport goods inside the country than across to Asia. An economist report recently confirmed Hall’s impression, stating that exporting a standard shipping container costs $1,770 in Colombia, against $1,480 in Argentina.
Aware of the paralysing effect of a below-average infrastructure, the Colombian Government has embarked on a multi-billion infrastructure spending binge. According to Financial Times journalist Andres Schipani, Colombia’s government is auctioning off $25bn worth of road infrastructure to keep the country’s economy humming. “The concessions are part of a larger strategic goal to invest nearly $3 billion in transport infrastructure by 2014 and about $100 billion by 2021,” he says. Some analysts expect the final investment to be around $55 billion only.
Regardless of the amount, Luis Fernando Andrade, Director of the country’s newly formed National Infrastructure Agency (ANI), announced some 8,000km of roads will be constructed as part of the investment.
“As Colombia uses roads for more than 80 per cent of its internal transportation, the push is to create extensive road systems, including the expansion of critical roads and building bridges and tunnels to reduce journey times,” comments Schipani. “The plan is geared towards … shortening routes and lowering all gradients to decrease fuel usage, creating 80kph average speeds instead of the current 40kph.”
Connecting Medellín, the country’s economic powerhouse, to the Pacific and Caribbean sea is one key element of said plan. Another large-scale project is the four-lane expansion of the route from Bogotá to Buenaventura to facilitate trade with Asia and the rest of Latin America.
A third issue to be addressed is the trade corridor between Tumaco in Colombia and Belém in Brazil. According to The Economist, the route includes an unpaved track that locals call the “trampoline of death”, running from Pasto, capital of the Nariño department, to Mocoa in the Andean foothills. “Today its 78km take more than three hours to traverse, as gushing mountain streams cross it and continue down sheer cliffs into gorges.” A new $376m road safe for lorries is set to open in 2016.
Even though it may take some time to complete the impressive overhaul, the campaign is expected to have a positive impact on GDP performance and lead to substantial growth in the country’s construction industry. UK consultancy Timetric states that infrastructure construction is forecast to grow at a CAGR of 7.67 per cent from 2013 to 2017.
The resulting need for transport equipment is not specified in Timetric’s most recent report, but given the proven correlation of construction activity and equipment demand, many an analyst is confident sales will increase until the end of the decade.
Naturally, Fast Market Research is optimistic about the country’s long-term growth performance. On the back of the Government’s infrastructure investment initiative, the US-based firm is expecting road freight tonnage to increase by 5.7 per cent in 2014 – a positive signal for the transport equipment industry.
A second development that could positively affect trailer demand is a 9.79 per cent increase in total tonnage at the Port of Cartagena, next to a more restrained 2.39 per cent rise at the Pacific port of Buenaventura.
Given that surge of positive data, it is not surprising that US trailer giant Utility has recently opened a subsidiary in Bogotá. Starting off with a small team of five people, the new location plans to follow Utility’s Mexico business model. “Just as Mexico did 20 years ago, Colombia is in the process of developing more modern trailer fleets,” says Gabriel Garcia Diaz, President of Utility Trailer de Mexico. “Colombia is the door to South America and has a growing economy, which makes it an ideal location for a new Utility dealership.”
Today, the majority of equipment used in Colombia is still quite basic – light rigid trucks, four-wheel-drive vehicles, three-wheel bikes and the odd donkey dominate the market with an estimated owner-operator ratio of 75 per cent – yet Utility’s move indicates a change in the logistics landscape.
As infrastructure development is set to continue until 2021 – backed by record-breaking fiscal inflows that are unlikely to stop any time soon – truck and trailer combinations will soon be able to handle Colombia's wrinkled topography and help shoulder the nation’s growing freight task. To be close the market, Hong Kong’s Sinotruck has also established an office in Bogotá to sell articulated trailing equipment imported from Asia, challenging ambitious local businesses like Rhinox, a start-up from the town of Armenia that is trying to gain national recognition in the semi-trailer market, and established brand Romarco.
But while the country’s growth potential is undeniable, security is still a concern in Colombia – not only on the road, but also in business. “Operating in Colombia is not without its risks,” says Canadian expert Hall. “Institutions are weak, in particular the regulatory process. Environmental and social permits can take up to 18 months to secure.”
In addition, corruption and social conflict are quickly rising to the top among business-inhibiting concerns, as demonstrations are already nipping up to 0.5 per cent away from annual GDP growth.
“Juxtaposed against the opportunities, these significant concerns can be daunting,” Hall concludes. “[But] with appropriate risk coverage, savvy traders and investors can do very well in the coming growth cycle in this very dynamic market.” 
Essa Al-Saleh, President and CEO of Kuwaiti transport giant Agility Global Integrated Logistics, is equally optimistic about the potential of emerging nations like Colombia. “The industry’s confidence in emerging markets shows that logistics executives take a long view and see beyond [negative] headlines,” he says. “In the past, currency pressures, investor jitters, political instability or a pause in growth was a major setback that undermined confidence about other emerging markets. This time, the industry is staying focused on their enormous potential.”
Since 2014, Agility is funding a comprehensive Emerging Markets Logistics research project to identify the most attractive logistics hot spots around the globe. Since the 2012-13report, Colombia climbed three spots in the ranking to no. 26 – coming in behind the BRIC ensemble, but ahead of much talked-about economies like Nigeria and Venezuela. In South America, only Chile, Peru and Argentina outperform Colombia, but none of them have climbed more than a single spot since the last ranking.
In the ‘Size & Growth Attractiveness’ category – which is based on economic output, projected growth, financial stability and population size – Colombia is in 13th position just behind the booming Philippines and ahead of South Africa.