Ana Rey president of the Institute

March 2018 / SOUTH AMERICA·

Uruguay: A logistics hub

The INALOG brings together public and private actors of business chambers that integrate the logistics chain in order to promote value added services and regional distribution from the logistics platforms of Uruguay.

Within the framework of the heavy investments in infrastructure in execution by the Ministry of Transport of Uruguay, the National Institute of Logistics (INALOG) promotes private investment. The INALOG brings together public and private actors of business chambers that integrate the logistics chain in order to promote value added services and regional distribution from the logistics platforms of Uruguay. In this context, German companies have been regularly visited in order to boost the outsourcing of companies in that country, which can move their stocks to Paraguay, Argentina and Brazil from Montevideo.

Public Accountant Ana Rey, president of the Institute pointed out that maritime and air connectivity is excellent with facilitation of Foreign Trade to and from the region. German companies or members of the European Union can settle or settle their stocks in Uruguay, which will allow them to reach a market of more than 250.000.000 inhabitants with high GDP. “Uruguay Logistico” (Logistics Uruguay) promotion policy as an identity of qualified operators and reliable services, determined that logistics’ sector entrepreneurs participate in regular missions to Germany.

The fruit fair in Berlin as an area for exporters and missions to Düsseldorf, Hamburg and Berlin allowed to know the potential for quality and services that can arise in an alliance with Germany. A modern port consolidated as a "regional hub" is complemented by a customs office with reliable operators oriented to the facilitation of trade and an aerial and terrestrial infrastructure that connects us to the region. These are elements to be considered by German businessmen in the search for new markets. The following data confirm the growth and activity trends of the logistics sector in Uruguay. There is a growing trend in the construction of buildings for industries and warehouses, with a significant peak in the years 2012 and 2013. During the period analysed 2005-2016, 217 companies built 479 buildings that totalled more than 1.150.000 m2 of construction occupying land for almost 1,150 ha. This data shows that the use of land (m2 built/m2 land) is 10%, which infers that companies have capacity for their infrastructure of logistics warehouses.

In the first half of the period, an average construction of 50,000 m2/year is recorded, while in the second half 145,000 m2/year were reached. A maximum was recorded in 2012 with 282,000 m2 built, standing out that almost 40% of the constructions surveyed correspond to the years 2012 and 2013. In the analysis by departments, it is found that 57% of the total was built in Montevideo, 33% in Canelones and the remaining 10% in San José. This difference is maintained almost every surveyed year. The main access roads to the deposits are: Route 1 (19%), Route 101 (17%), Camino Bajo La Petisa (11%), Route 8 (10%), Route 5 (9%), and Route 102. (6%), which totals something more than 70% in terms of constructed area. In reference to the use of land by companies: unique companies occupy 70% of the total built. That is, 30% of the surface has been built on logistics platforms.

This relationship, that has been maintained throughout the period has been modified in the last year (2016), where the relative weight of logistics platforms measured in terms of m2 built, went to 66% compared to 34% of use of land by unique companies. The movement of containers related to foreign trade of Uruguayan goods had an increase of 2% and that of the Hub -Uruguay as a regional distribution centre- grew 8% in 2017. The figure reached in 2017 by the containers of the Hub was the highest in the last 5 years. The total movement of containers mobilized in 2017 reached its highest level in the last 5 years. In the interannual variation an increase of 6% can be observed (10% full and 5% empty) with respect to the previous year. Based on its services, the numbers presented confirm that investors and operators of the international industrial sector choose Uruguay as a distribution platform.