Montevideo port skims 30% of cargo from Buenos Aires

Tuesday, October 18, 2005

In the last year, Uruguay's Montevideo port has managed to take 30% of the cargo previously being handled at neighboring Argentina's Buenos Aires port due to the high costs at the latter terminal, Argentine daily Infobae reported.

The costs of docking a ship in Montevideo's port are approximately US$15,000, while in Buenos Aires port, the cost for the same ship is closer to double that figure.

"In fact, at present you could talk about tripling costs [between Montevideo and Buenos Aires] because this operation can reach up to US$45,000," the chairman of Argentina's Centro de Navegación shipping association, Rodolfo García, was quoted as saying.

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"The most important problem being faced by the port [of Buenos Aires] at the moment is that it is very expensive and Montevideo port is attracting a great deal of Argentine cargo," added the official.

Despite the devaluation of the Argentine peso at the beginning of 2001, port charges effectively remained in dollars, which made them considerably higher than in other regional ports such as Montevideo.

"In the last few years, we have lost ground because of the [economic] crisis, and even so, prices were maintained in dollars," said the head of the transport commission of the Argentine importers chamber (CIRA), Juan Carlos Mondello.

"Uruguay has taken as a premise that its ports should be supported [by the state] so they serve as regional terminals, and that will not be good for Buenos Aires as it will take traffic away," added Mondello.

"Also, Argentine foreign trade will have additional costs because shipping lines that do not come directly to Buenos Aires and unload in Montevideo will charge extra," the CIRA official was quoted to have said.

Aside from the cost differences between docking in Buenos Aires and Montevideo, said García, Buenos Aires port has the added complication that to reach the unloading facilities, ships have to first negotiate a 200km navigation channel.

This process can take up to 10 hours and requires two pilots employed by the port. In comparison, arriving at other ports in the region is a much simpler affair and takes no longer than two hours.