Freight of Hand

How do you expect the widening of the Panama Canal and expansion of Puerto Caucedo will impact the Dominican logistics industry?

The impact will be that those large, post-Panamex ships will only stop at the major ports, and smaller ports like Caucedo, Freeport and Cartagena will be used as transshipment hubs to carry that cargo with feeder services to other destinations within the area.

How would you assess the Dominican Republic’s potential as a hub in the Caribbean, and how do your operations affect the region at large?

We are developing a logistics free zone in Puerto Caucedo to work toward that very purpose. I am very positive about the country’s potential in this field. The Dominican Republic has the important ingredient of local cargo, which you need to include to be profitable. We can also provide services for transshipment cargo to other destinations, since the Dominican Republic is the largest market for local cargo within the Caribbean. We are also a strong hub for transshipments to smaller countries and ports within the area.

What is your vision for the development strategy of Maritima Dominicana?

Our goal is to become a service provider for what we call “supply chain management;” in other words, we want global companies to use the Dominican Republic as an inventory hub for spare parts and products that can eventually be delivered to local customers or to clients within the region. The services that we provide involve the management of materials and spare parts inventories that can later on be distributed either locally or abroad.

How do you adapt to the different needs of your various clients?

Each has to manage their own inventory and manage the supply to customers via an in-house system. We then become part of that system as we offer a tailor-made provision of services to our clients. We need knowledgeable personnel to manage our IT systems in accordance with our principles. Over the past five or six years we have employed and educated a lot of people who are now capable of doing this, and can successfully integrate them into the companies we work for. We have sent employees on training courses in Panama, the US, and even Europe over the last few years precisely to be able to adapt our firm to the requirements of our clients.

What kind of infrastructure is needed to provide the various services you offer?

In the shipping industry, we have departments that do container repair and maintenance in all ports of the Dominican Republic. We are also a service provider of spare parts for companies such as Thermo King and Carrier, which are the major suppliers of refrigeration systems for most of the world’s reefer containers. All global steam ship carriers have reefer containers, but it is impossible to know when they will require repairs to their equipment. Therefore, if we have a local hub here for these spare parts and have the ability to provide that service very quickly, that is an important element of the services that we provide.

Do you typically focus on a special sector or client?

We do not focus on a specific sector, as the services we provide are generic in a sense; they are not dependent on the companies that require these services because containers and reefers are the same, more or less, for all shipping lines. For example, for companies importing or exporting fresh fruits and vegetables, we can store these products in our warehouses and then, according to their requirements, we can deliver them to their local customers or to the shipping lines for export. It is a generic service, more or less.

How do your services differ in the various ports of the country?

Each port has a specialized service for different cargos. For example, the main container ports are Caucedo and Haina, but some containers are being handled in Puerto Plata. Haina is focused on bulk cargo, like grain, coal, or fertilizers, and general cargo like steel and lumber, while San Pedro is involved in the export of cement and the import of fertilizers. We are the agents for vessels that deliver or load different cargos depending on the location.

How does customs clearance work and how does it benefit the client?

It is much easier to handle the transfer of cargo from the port to the customer at the end when all the services can be combined, including the handling of the cargo in the port, customs clearance, local transportation, the management of inventory if necessary, and then final delivery. Therefore, it is a chain of services that can all be integrated to provide the delivery of that cargo to the customer at the end.

How do you provide services for steamships?

To be a port agent for steamship companies is again what we call a generic service; we handle the port agency of the vessel, crew changes, the supply of spare parts or provisions, and supply drinking water or fuel oil. Those are generic services that have really nothing to do with the customer services that the steamship lines provide to their customers. This is why most steamship lines today have their own offices to be in contact with the customer. In the end, generic services can be provided to any principal, even if they compete with each other on a normal basis.

What is your outlook for 2014?

We feel that 2014 will be a relatively stable year, but in 2015 we believe we will have additional opportunities precisely because the distribution free zone will be already operating in Puerto Caucedo, which will allow for the expansion of supply chain management solutions.

What is the significance of the new distribution free zone?

It is important for the Dominican local shipping sector and the port. All steamship agents and freight forwarders can take advantage of those services. They will be initiated in 2014 and will then grow over the years so we can attract more and more principals to use Puerto Caucedo. It will generate more international exposure, for sure.

How does the regulatory environment affect the industry?

The legal structure that has to do with customs and the local authorities have to make this distribution system more efficient. If you want to develop a new market of global commerce, you also have to adapt the local legal structure to make it efficient. That does not mean we will violate any government requirements, but the systems have to be modernized, and this is an issue we are discussing with the local authorities right now. A new customs law is currently under discussion in Congress in order to make those services more efficient.

Have single window principles been applied here yet?

The idea is there, but it has not been applied yet. Companies have an excellent opportunity to use the Dominican Republic as a hub, but you have to be able to bring in these spare parts without having to declare them in the local market. They should rest in a free zone and then, when they are needed in the local market, they can be declared, but when you want to send them to Barbados for example, you shouldn’t have to pay import taxes on cargo if you are shipping it there. This is one of the issues that the new customs law needs to cover. The same is for the export of agricultural products; it has to be coordinated effectively so that when you deliver a shipment to the airport, it cannot sit there waiting for the agriculture department to inspect it for hours. If you miss the connection and need to wait until the next day to ship it, the quality of that product will suffer. This is a problem that the local authorities have to understand and help us so that this service can be improved.

© The Business Year – November 2013