It has been a sweet and sour year for the international shipping industry. In June 2016, the expansion of the Panama Canal was finally unveiled. Now ships with almost double […]
It has been a sweet and sour year for the international shipping industry. In June 2016, the expansion of the Panama Canal was finally unveiled. Now ships with almost double the cargo capacity can pass through one of the world’s most critical transit points. When the project was conceived in 2009, it was thought that bigger ships carrying more goods than ever would bolster the country’s rapidly blossoming trade with the world. The ribbon-cutting ceremony in Panama was a bit subdued, however, as international trade slumped and shipping rates hit historic lows. A few months later, the Korean shipping giant, Hanjin, sent tremors through the global maritime community when it filed for bankruptcy. Clearly, new strategies would have to be adapted to survive the rough waters ahead.
As an island, the Dominican Republic is naturally endowed with maritime advantage. Its strategically important location in the Caribbean makes it a frequent stop for goods coming from North America, South America, Europe, and even Asia. Its combined domestic market with Haiti of almost 21 million people makes it the largest in the Caribbean. Its trade agreements with North America, Europe, and other Caribbean nations make it the perfect landing pad and springboard from which international companies can ship their products to anywhere in the region.
But in a globally competitive world, a country can only survive if it supplements its geographical blessings with the proper investment and tactical governance. This why the Dominican Republic has invested in making upgrades to its ports to accommodate the new larger vessels now passing through the Panama Canal. Of its seven seaports and six container terminals, DP World Caucedo is the port that will be the most able to handle the new Panamax vessels. It boasts five post-Panamax cranes, one super Panamax crane, 800 reefer plugs, a 15.2-m depth, and 922m of berth. Alongside the mega infrastructure, port operators are building dozens of warehouses for the Caucedo Logistics Center on 40h of land during Phase I and have plans to double that for Phase II. This way the port can serve as a one-stop shop for any international company. And the race with its neighbors is now on: countries like Jamaica are also vigorously building up their ports to lure the larger but less frequent vessels now sailing the region’s seas.
From a political perspective, the government is doing all it can to move the country forward and is taking a new approach to getting through the shipping slump. Releasing Decree 262-15 at the end of 2015, the government laid down the legal framework and customs regulations for the development of an official logistics sector in the Dominican Republic. This will allow global companies to stop at Dominican ports, unload their products, and repack their goods to ship to different destinations all over the world with minimal financial burden. The aim of this is to attract companies from Asia, South America, and Europe to use the Dominican Republic as a convenient distribution hub for all their products. The proximity to the large markets within a few days’ journey and the sizable domestic market make it a persuasive case for becoming the regional hub in the Caribbean.
The broader economic implications for the Dominican Republic are clear. This will increase the amount of trade flowing through the country, create jobs, allow for cheaper products into the local market, and act as an incentive for companies to set up manufacturing in the country. The bottom line is that connectivity is vital for building a more dynamic economy. New infrastructure and greater trade volume will not only allow economic benefits to ripple through sectors peripheral to transport; it will solidify the Dominican Republic as a critical node on the global supply chain.