The arrival of Chinese etailer Temu in Uruguay has set the ground for a courier terminal at Montevideo’s Carrasco International Airport.
Latin America Cargo City (LACC), the airport’s logistics operator, is spending over $10m on construction of a 5,000 sq metre building designed to accommodate the rapid growth of e-commerce traffic.
“This investment will enhance infrastructure, operational capacity, and services, directly improving the experience for both courier companies and end consumers of international e-commerce, who will benefit from a simpler and more efficient process,” said LCC general manager Bruno Guella.
LACC’s e-commerce volumes grew at around 15% a year until 2024, when the arrival of Temu halfway through the year triggered a 170% year-on-year increase in parcel volume in the second half, doubling the airport’s volume over the full year.
The parcels arrive largely on freighter flights from the US, some dedicated to Temu, said Mr Guella. The weekend saw the airport receive three freighters bringing in goods for the company.
And other e-commerce platforms have shown interest in expanding into Uruguay.
Mr Guella said the rapid increase in global e-commerce had “posed an unprecedented challenge for airports globally, which are seeking innovative solutions to meet the demand. This project aims to address this challenge through both new infrastructure and process optimisation”.
Among the features of the new facility, slated to open its doors in the second half of next year, are automated vertical storage systems for parcels, multi-range cold storage rooms, and individual workspaces for dedicated operations. Several courier firms have asked for individual areas in the building, which will also house customs.
And LACC is also upgrading its warehouse management system, a process scheduled to be completed this summer.
While the rapid growth of parcel traffic and the interest from other e-commerce platforms have been encouraging, Mr Guella is not that gung-ho on the sector’s future trajectory. For one thing, it is not clear if flying goods around the world after receiving orders is going to be a viable strategy long term, as opposed to a short-term mechanism to stimulate demand and create markets.
Current developments in the US and the EU to stem the traffic are also giving pause for thought on the long-term outlook for this business and the appropriate transport strategy, he added.
Another consideration stems from Uruguay’s population of 3.5 million, which offers a limited market for the e-commerce juggernaut.
On the other hand, LACC has positioned itself as a logistics hub and gateway for the southern cone of South America, a strategy that prompted two pharmaceutical giants to use the airport for their distribution in the region. Leveraging the airport’s free trade zone, they are bringing in product by air as well as ocean container for multimodal distribution.
Mr Guella sees a possibility that this model could gain traction for e-commerce to Uruguay’s neighbours. LACC has performed some trials to test the viability of handling e-commerce shipments bound for Brazil.
Still, he remains cautious, he says, waiting to get a clearer picture of where e-commerce is headed.
