QCuba wants to be a cross-dock point for imports moving through the expanded Panama Canal and
bound for U.S. markets, especially the New York metro
area. That potentially means a lot of cargo headed for
Havana. Is that doable?
AIt is, conceptually. The Port of Mariel is a modern facility that has on-dock rail capabilities. We were
told it could scale up its capacity without physically
expanding. Investors in the port envision it as a cross-dock location for imports coming through the canal
and bound for the East Coast and Europe. Miami is the
closest U.S. deepwater point, but it is too far from the
Northeast’s dense populations.
QDo you sense that DRT’s customers are eager to do business in Cuba? Or is
there a reluctance to step into the
market?
A“Eager” is a strong word. We have discussed this with some
of our key customers, and the
responses have been all over the
board. The market opportunity exists. With a population of
about 12 million, Cuba is as big
as Greater Los Angeles. It would
benefit from the modernization
that can come with improved
trade relations with the U.S.
Solving the socioeconomic challenges seems improbable in the
short term. Having cruise ships
dock in Havana for a day is a
long way from total trade.
QVirtually no U.S. transport and logistics practitioner has done business in
Cuba. If a U.S. company makes the leap, what should
it brace itself for?
AUnfortunately, after Mariel, the infrastructure rap- idly deteriorates. The preferred method to move
goods across the island is port to port, which illustrates
how poor the road infrastructure is. Most containers
move on flatbed trucks because there are virtually no
available chassis. Container dwell times can hit 21 days,
unheard of in the U.S. Yet these challenges represent
opportunities for the right companies. Port operator
PSA International projected that Mariel could almost
triple its current TEU (twenty-foot equivalent unit)
capacity without needing to actually expand. We were
told that Mariel handled close to 300,000 TEUs in 2015,
and as noted earlier, the port was built with a plan to
expand its TEU capacity.
QWhat else struck you, positively and negatively, about the condition of Cuba’s transport system?
A What surprised me was the state of the total infra- structure, not just as it related to freight and logistics movement. Most Cubans use public transportation.
Import duties on automobiles make it virtually impossible to own a finished automobile. The classic 1950s
cars that seem frozen in time and that many Americans
associate with post-revolutionary
Cuba are almost exclusively taxis
now. They are maintained by
an amazing system of imported
parts and by metal “artists” that
fabricate their own parts. The
taxi owners are immensely proud
of the condition of their cars. It is
a highlight of Havana.
QU.S. businesses are lagging behind their counterparts
from other countries that never
imposed a trade embargo on
Cuba. Will U.S. companies find
it difficult to dislodge established
non-U.S. providers?
A I don’t believe U.S. firms will have difficulty competing in
Cuba if the embargo is lifted.
The U.S. has a huge nearshoring
advantage. It seems that most countries currently trading with Cuba do not have a large presence there. Our
collective capabilities should serve us well given that
Cuba’s energy, civil engineering, and telecommunications ecosystems are stuck in the 1950s.
QWhat advice would you give a U.S. logistics provid- er that’s interested in doing business there?
AAlign yourself with local asset-based partners serv- ing the island. The reason is that there are still
countless legal and regulatory questions about doing
