Rocky Coast.

Cargo sticks to the shores of South America.

SOUTH AMERICAN SHIPPING FOLLOWS A STRAIGHTFORWARD rule: Big city consumers buy their goods from nearby manufacturers.

But that's often the problem. Unlike Europe and the United States, where road and rail networks serve interior cities and manufacturing plants, South America favors its coast--and that means it ends up grappling with its inland freight needs.

"South America, and Latin America for that matter, is a region of capital cities characterized by main points of manufacturing and consumption," says Frederick Stromeyer, vice president of international operations for USCO Logistics, a Connecticut-based transport company. "In general, there is less reason for them to move inland compared to containers in the United States, which has a more uniform distribution system throughout the country."

In South America, most major cities sit on or near the coast. Sao Paulo and Rio de Janeiro consume huge portions of Brazilian output, while the Buenos Aires metropolitan area accounts for about two-thirds of Argentina's consumption. "Containers usually go directly to a distribution center in Buenos Aires and goods are then moved inland by truck," says Agustin Iriondo, logistics manager for S.A. DeGiacomo, USCO's affiliate in Buenos Aires. Only the largest companies like General Motors and Eastman Kodak can negotiate to hold containers up to 20 days; smaller companies tend to stick close to the coast so they can return the boxes within five to seven days to avoid extra charges, Iriondo says.

Because so little cargo heads inland, companies must be prepared to pay top dollar. They also must plan well so boxes are not left stranded at their plants or the ports.

Chile bears some similarities to Argentina in that about 70% of its purchasing power is concentrated in Santiago. Finished goods flow straight to the capital through the ports of San Antonio and Valparaiso. Many shippers expect specific inspection, insurance and other procedures available only in Santiago--just one more reason not to open cargo routes to the interior.

"Chile is different from Argentina in that there are many ports of entry for raw materials, so there is more even distribution," says Andre Van Bavel, president of AZB USCO Logistics in Santiago. But the roads and rails don't venture far inland. "Raw materials tend to go to the large cities located near ports in the northern part of the country," he says.

That means inland shippers or consumers could be stuck in the interior without a way to get their cargo. That's the Latin logistics idiosyncrasy that manufacturers, shippers and others in the industry hope to change.