South America’s only Airport Free Zone, MVD has positioned itself as a competitive gateway for South American distribution.
Over the past 10 years, MVD airport management has been fine-tuning its service offer and has successfully positioned itself as an expert multimodal regional distribution center with strong focus on pharma. Having excelled in the most complex cargo handling requirements, it is now branching out to service the high-tech, eCommerce, spare parts and refurbishing industries.
Corporacion America (NYSE: CAAP) one of the largest global airport operators, took over the concession of Uruguay’s main airport, Aeropuerto Internacional de Carrasco, in Montevideo back in 2003, and after pumping an impressive $165 million dollars into its refurbishment, inaugurated a brand-new terminal in 2009. Building on its major benefit – the fact that it operates under the free airport law, offering not only all the tax and legal benefits of a standard free trade zone but also significant logistics advantages due to its strategic location inside an airport and its multimodal transport capabilities – the airport’s vision was to position itself as THE gateway for South American distribution. It therefore began working on developing a world-class infrastructure and IT systems, a competitive professional team, and an organizational culture with the client’s peace of mind at the center of its strategy.
MVD Free Airport Today
Today, MVD Free Airport provides a wide array of services across several industries, with a strong focus on pharmaceuticals. Cross-docking operations consolidate sea freight and airfreight, and transport cargo via truck to the larger regional markets such as Brazil and Argentina. Postponement operations allow for optimization of purchase orders at origin and product customization to reach smaller markets, as well as nearshoring security stock for same-day replenishment. It provides a platform for refurbishing operations for manufacturers, significantly reducing their fulfillment cycles, as well as high-tech and e-commerce delivery platforms that allow for nearshoring of inventory via sea freight and an agile last mile from Montevideo with same day delivery to all main South American cities.
Getting the message out that cargo is more than just “moving boxes”
CFG spoke with MVD’s Commercial Manager, Hans Guiscardo, recently, and learnt how the cargo team, together with HR, spent the first 2 years, from 2014 on, developing staff culture and setting standards going well beyond the then existing notion that cargo was simply about “moving boxes.” A great deal of work went into setting up the cargo infrastructure including general storage areas, inbound and outbound x-ray, full AWB traceability, and the airport’s first Pharma Hub, inaugurated in 2017.
“It was important for us and all our staff, to get a full understanding of the Pharma business, and the consequences of a failed cycle,” Hans Guiscardo underlined, very much aware of the financial and life-threatening risks involved if pharma is not properly handled. The aim was to develop a top-quality cargo distribution center in an emerging market, with an excellent cultural and logistical link to neighboring countries, positioning MVD as a reliable and professional doorway to South America. The larger regional distribution activities began in earnest 3 years ago.
Pharma Hub 2 will be opening mid-next year
“When we built phase 1 of the Pharma Hub, we were confident it would be well accepted, but the reality exceeded expectations what makes us feel proud considering the high level of demand of an industry such as pharma.” Managing Director at MVD Free Airport, Bruno Guella, stated in an earlier interview. The reality from 2016 onwards, were 3-figure percentage growth figures and a hub that constantly operates above 60% capacity with 100% capacities at various peaks throughout the year, when Brazil and Argentina throughputs are at as their highest. This year, work began on building Pharma Hub 2, which is due to become operational in August 2020, doubling the existing floor space and bringing the total pharma warehouse capacities to 2,600 m². MVD Free Airport was the seventh airport to join Pharma.Aero in September 2017, (an initiative set up by two IATA-designated Pharma Hubs, Brussels Airport and Miami Airport in October 2016, to focus on improving pharma handling and quality in air cargo worldwide), and was awarded IATA’s CEIV Pharma Certification in mid-June 2018.
A local expert with same-day links to all major South American cities
Many Free Zones around the world are near an airport, and Uruguay itself has a total of 11 Free Zones, thus a great deal of expertise and flexibility in providing efficient supply chain management. Yet, Montevideo is able to go one step further. As South America’s only Free Zone Airport, operating under Airport Free Zone law, and with a mere 200m from the tarmac to the warehouse, it provides extremely quick transfer times. “Since all cargo movement happens inside the airport, we are able to offer our customers a much leaner platform for supply chain, with tax advantages, fast lead times to reach the larger regional markets as Brazil, Argentina and Chile, and significantly reduced costs”, Hans Guiscardo says, “And we are flexible in setting up Proof of Concepts, since our processes are seamless to implement and within a minimum administrative burden.”
He mentions a number of success stories, including the AstraZeneca HUB Uruguay project which won the LOGIPHARMA AWARDS in the category of "Global Temperature Control" in 2017, as well as an honorable mention in the category of "Best Distribution Network Strategy" on the basis of its regional distribution set-up in Uruguay.
MVD Free Airport as a strategic logistics partner for a customized last mile.
Having proven its expertise in a highly sensitive cargo product, MVD Free Airport is now keen to branch out and place itself as “A strategic partner for global players” in the rapidly growing eCommerce industry, and in the high-tech, refurbishing and spare parts sectors. Asian and European companies are already looking at MVD as a solution to their otherwise geographical constraints when it comes to quickly furnishing South American customers with products and parts. MVD Free Airport’s multimodal transport capabilities provide the possibility of a long haul to Uruguay via sea, reducing airfreight costs, nearshoring stock at MVD airport, and performing pick-pack-shipping operations to ensure same-day delivery to all main south American cities.
Hans fires off MVD’s benefits in comparison to its neighbors: “Economic and political stability, high level of education, excellent cultural understanding of regional markets, much simpler
and more transparent processes than in Argentina, Brazil or Chile, for example, superb same-day air network to all major South American cities, reliable RFS network - all enabling a shorter last
mile, and we are the only third-party logistics provider in South America that combines a tax-exemption regime, multimodal transport, primary and secondary packaging capabilities, and location
inside an airport free zone.” And all that in a forward-thinking airport that already has one of the lowest pollution levels worldwide, and earlier this year, pledged to further reduce its
carbon emissions by 20% over the next few years, having installed a photovoltaic solar power plant, a new thermal conditioning system, and shifted fully towards the use of LED technology to
reduce power consumption.
Sustainable, multimodal, quality-oriented, fully traceable– how many airports can offer that?
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