A Uniquely Situated DR
In 1496, La Neueva Isabela – now known as Santo Domingo, the capital city of the Dominican Republic – was founded. Located in the southern part of the island at the mouth of the Ozama River, Santa Domingo became the “First City of the Americas.” Recognized as the oldest continuously inhabited European established settlement in the Americas, Santa Domingo was the home of the first mercantile transactions between Europe and the Americas, which represented the beginning of international trade throughout the American continent.
Building on its history of international trade and its ideal geographic location, the Dominican Republic government and private sectors are actively promoting the country’s unique position to serve as the logistics hub of the Caribbean. “Air and maritime routes connect to more than 73 countries around the world,” points out Salvador Figueroa Sanchez, Institutional Relationship Vice President of Maritima Dominicana and President of the Dominican Association of Logistics Centers and Operators. “The country has a maritime and airport network distributed in the most strategic areas of the country that are inter-connected by a great terrestrial road network that facilitates rapid access.” Seaports are also well equipped to unload and load ships as well as move cargo, he adds. Government and private sector companies have worked together to develop the legal and logistical framework to establish the country as an attractive logistics hub for companies throughout the world. In September 2015, the Dominican government issued Decree No. 262-15, which regulates logistics centers and logistics operators at international cargo terminals. Logistics centers are defined as spaces where all international supply chain services are offered including cargo management, storage, transshipment, classification, consolidation, deconsolidation, nationalization, packaging, re-packaging, distribution center and order preparation. “Logistics parks are able to combine shipping lines cargo, segregate cargo in transit, and send by airline transportation,” explains Rafael Alberto Smith, Director of Operations Landside and Cargo for Punta Cana International Cargo. “This is an important legal step because exporters from Europe, the Far East, and South and Central America are able to use the Dominican Republic as a warehouse center and serve the Dominican market as well as small markets in the Caribbean without paying taxes.” “The country also has a monetary and financial system that has a banking network approved by the Monetary Board and is supervised by the Central Bank and the Superintendency of Banks, with more than 5,800 branches throughout the country,” says Sanchez. “The system maintains good banking practices regulated by these organizations, which gives confidence in the transactions carried out through the local bank with their respective international co-responsible companies in the main countries of the world.” The country boasts eight commercial, international airports and 15 international seaports. Investment by private, public, and public-private entities is expanding the logistics capabilities within these facilities. “The private sector has been investing in the main port and airport facilities of the country, such as DP Caucedo, which, in addition to being a seaport for transshipment, has facilities for handling and storage of cargo and added-value logistics operations,” says Sanchez. Other enhancements include Haina International Terminal (HIT), which is a concession granted by the State to be managed by the private sector, he points out. “Facilities and port areas are converted for efficient handling of loose cargo, in bulk and in containers.” Logistics parks such as Caucedo Logistics Center are a clear example of the commitment to becoming a logistics hub, says Smith. “The Center has four warehouses built and three more under construction, with the master plan calling for a total of 42 warehouses,” he says. “World class port structures are used as transshipment points for the big lines of the world, such as MSC and Hapag-Lloyd.” Air cargo is also a critical component of the Dominican Republic’s ability to serve the Caribbean area as well as the Americas. “Punta Cana International Airport is the busiest airport in Dominican Republic with 67 percent of the total traffic of the country,” says Smith. “We serve 98 cities in 36 countries, which allows us to have the best connectivity throughout Europe, North America, and South America. We have pushed this competitive advantage very seriously to position Punta Cana as the cargo hub of the Caribbean between South America and Europe and North America for perishable goods.” Smith’s organization is planning to formalize an alliance with a major cargo company for Punta Cana to become the third hub in the cargo company’s network to distribute perishable products such as flowers, fruits,and vegetables.
“Our proximity to main markets like the United States – only three days transit time to Miami and six days to the U. S. East Coast – and excellent connectivity to the Caribbean as we cover more than 27 islands with an average transit time of seven days or less, demonstrate our potential,” says Smith. The ability to deliver goods throughout the Caribbean and locally to residents of the Dominican Republic – about 10 million consumers – gives importers access to new markets, including producers in the country, says Smith. “The Dominican government has adopted 2018 as the Export Year,” he says. “A sustained campaign to create awareness of how the airports can quickly and costeffectively move their products to non-traditional markets has been underway.” Smith’s organization is planning a new cargo facility in the next two years to meet the demand and growth that is forecasted. The market for goods and produce is healthy throughout the Latin American region, says Sanchez. “According to the Latin American Consensus Forecasts, the GDP of the Latin American region in 2017 grew by 1.6 percent and is projected to reach 2.5 percent by 2018 – putting an end to six years of economic slowdown, including a recession in the last two years,” he says. “It is projected that Central America and the Caribbean will maintain a constant growth rate of around 3.8 percent.”
Overall, the outlook is positive for the Dominican Republic’s focus on becoming a logistics hub, says Smith. “Based on air and shipping connectivity that we have now, new legislation, and private sector efforts to provide new education programs in the university, the Dominican Republic will become the hub in the Caribbean for many important importers in the world.”