Uruguay as a Regional Hub for South America

Grupo Base Cargo set up operations in ZONAMERICA to streamline its operations. The Uruguayan logistics group, with offices in Argentina, Brazil, Chile, Uruguay, and Spain, inaugurated Base Free Zone in August. A 1,500-square-meter warehouse in the ZONAMERICA free trade zone, which will be expanded to 4,000 square meters in the coming years. We spoke with its founder and CEO, Nelson Saturno, about Uruguay’s role in the future of global logistics.

As a result of the pandemic and the war in Ukraine, there is a redefinition of global value chains (GVCs) that once spanned the globe. How do you see the logistics market moving forward?

Since the pandemic, there has been a fundamental shift in logistics, which was further exacerbated by the war in Ukraine. Demand outstripped supply. This marked a change in how market demand is generated. Until the end of last year, freight rates were up to 1,000% higher than before the pandemic. On the one hand, there was a need to get the goods as soon as possible, but on the other hand, there was no capacity to do so. This made shipping goods more of a necessity than the costs. These past two years have been very good for the logistics sector due to the extremely high freight rates.

Is this situation continuing in the logistics market?

No. Things are back to normal now. Globally, supply exceeds demand, so freight rates are falling. Meanwhile, end customers no longer have an urgent need to have their goods shipped as soon as possible.

How does the Southern Cone in general, and Uruguay in particular, fit into the global logistics landscape?

In general terms, Latin America accounts for 5% to 7% of global trade. That means we are far behind what is happening in other parts of the world. However, Uruguay plays a leading role as a regional hub for South America. This is the case with the Base Cargo Group. We began our operations thanks to a key client that operated out of Panama to serve the entire Southern Cone region. Today, that same client is opening another hub in Montevideo to supply the Mercosur countries and Chile. Our country is essential for logistics operators, who view it as a distribution center for the entire southern region of the continent.

What sets Uruguay apart?

This is a long-standing government policy that has sought to position Uruguay as a distribution hub, similar to Rotterdam and Antwerp in Europe, or Singapore in the East. This is because Uruguay is a reliable country that upholds the law and maintains long-term policies. As a result, investors have legal, physical, and spatial security regarding the distribution and storage of their goods. Furthermore, Uruguay is located a short distance from the main regional markets. This ensures the speed of logistics operations, which is essential since today’s inventories are not as large as they were in the 20th century.

What is Grupo Base Cargo's vision?

We aim to be a full-service logistics provider that can offer our clients all the services they need. We want them to have no need to handle any aspects of their shipments, distribution, or imports themselves. We want them to be able to unload the ship and have their products delivered within Uruguay or the region using our service. We want the products to arrive in good condition, on time, and at a competitive cost.

They recently moved their operations to the ZONAMERICA logistics hub in Montevideo. How does the relocation of the value chain through logistics centers work?

For us, with our clients in the pharmaceutical industry, ZONAMERICA is a model free trade zone for high-value-added goods. In our case, the business ecosystem and the quality of services available at the park made ZONAMERICA our obvious choice. Furthermore, ZONAMERICA’s strategic location—near the airport, 20 km from the Port of Montevideo, and along the main Mercosur routes—allows us to ship goods to their final destination without major issues.