Uruguay plays an instrumental role as a regional hub for South America.

Base Cargo Group has set up operations in ZONAMERICA to improve its business performance. In August, the Uruguayan logistics group with offices in Argentina, Brazil, Chile, Uruguay and Spain inaugurated Base Free Zone. A 1500 m² warehouse in ZONAMERICA free zone, which will be expanded to 4000 m² in the coming years. We talked to 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, the Global Value Chains (GVCs) that ran from one end of the planet to the other have been redefined. What do you think is the future outlook for the logistics market?

The pandemic brought about a major change in logistics, which was deepened by the war in Ukraine. The demand was greater than the supply. There was a shift in the way market needs were generated. Until the end of last year, freight rates were up to 1000% more expensive than they were before the pandemic. On the one hand, there was a need to have the goods shipped as soon as possible, but on the other hand, there was no space for them. As a result, the shipping of goods became more important than the cost. The past two years have been particularly good for the logistics sector, due to the exceptionally high freight rates.

Is this the current situation in the logistics market?

No. We are now back to normal. Globally, supply is greater than demand, which means that freight rates are falling. At the same time, end-customers no longer have a pressing need for goods to be shipped immediately.

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

In general terms, Latin America accounts for 5% or 7% of world trade. This means that we are nowhere near what is happening in other parts of the world. However, «Uruguay plays an instrumental role as a regional hub for South America.» Such is the case with the Cargo Base Group. We started our business because of an anchor client that operated from Panama for the entire Southern Cone region. This very same client is now establishing another hub in Montevideo to cater to Mercosur countries and Chile. Our country is pivotal for logistics operators, who see it as a distribution hub for the entire southern region of the continent.

How is Uruguay different from other countries?

This has been a long-standing government policy, which has tried to position Uruguay as a distribution hub like Rotterdam and Antwerp in Europe, or Singapore in the East. Uruguay is a reliable country, which respects the law and has long-term policies. Thus, investors benefit from legal, physical and spatial certainty regarding the distribution and storage of their goods. In addition, Uruguay is located at a short distance from the main regional markets, which ensures speedy logistics operations, a key aspect since stocks nowadays are not as large as they were in the twentieth century.

What is the vision of the Base Cargo Group?

We want to be a comprehensive logistics operator that can deliver all the services our clients require so that they do not need to do anything when it comes to transit, distribution and imports. We seek to provide a service that enables our clients to unload the ship and deliver their products either in Uruguay or the region. And that the products arrive in good shape, on time and at a competitive cost.

You recently relocated your operations to the ZONAMERICA logistics hub in Montevideo. How does the relocation of the value chain through logistics centers work?

Since we have clients in the pharmaceutical sector, ZONAMERICA is an exemplary free zone for high value-added products. In our case, the business ecosystem and the quality of the services that can be rendered from the park led us to choose ZONAMERICA. In addition, the strategic location of ZONAMERICA—close to the airport, 20 km from the port of Montevideo and with access to Mercosur’s main routes—enables us to ship the goods to their final destination without major inconvenience.