One-Stop Shipping in Montevideo.

• Author: Luxner, Larry
• Position: Montevideo, Uruguay

TINY URUGUAY, sandwiched in between vastly larger Brazil and Argentina, wants to make a name for itself as the new shipping and logistics platform of the Mercosur trade bloc. At least that's the goal of hundreds of transportation-industry executives who attended a recent logistics conference in the country's capital of Montevideo.

"Our opinion is that things will happen in South America the same as they did in Europe," says Santiago Bassols, director-general of the Barcelona-based Instituto de Logistica de Iberoamerica, which sponsored the conference.

"Because of the EU, most companies are changing their distribution strategies in order to provide the best service to the market," says Bassols. "In most cases, European companies are concentrating their activities among three to five distribution centers, changing from a national distribution policy to a European policy. Nike, for example, closed twenty distribution centers and opened one big center in Belgium for all of Europe. Nissan has two distribution centers for spare parts--one in Amsterdam and one in Barcelona."

"Uruguay is located in between the two main South American markets, Brazil and Argentina. It could be similar to Holland, also a small country in between very important markets," he adds.

Juan C. Rodriguez, commercial manager at Costa Oriental S.A., Montevideo's largest third-party logistics provider, says he's convinced that Uruguay--already the administrative headquarters of Mercosur--should also be the customs union's natural logistics platform.

"Uruguay offers multinational companies various advantages, starting with reduction of inventories in each country, so you don't pay duties on the goods until you need them," he says, adding that "Uruguay is a service economy, it has a national port, and the distance to our main markets is very small."

According to Rodriguez, it costs only $150 to move a container through the Port of Montevideo, as opposed to $230 in...