CubaNews / October 2002
By Larry Luxner
HAVANA -- So far, the shipping company that’s benefitted the most from renewed food exports from the United States to Cuba is Crowley Liner Services of Jacksonville, Fla.
Jay Brickman, vice-president of Crowley’s Colombia, Mexico and Venezuela service, said Crowley now has three sailings a month to Havana from Gulfport, and two a month from Jacksonville. Since Dec. 16, 2001, Crowley has moved about 700 containerloads of cargo on 17 voyages to Cuba, generating $1 million in revenues for the company.
“We think the Cuban market is very important,” said Brickman. “We’ve invested a lot of time developing the necessary infrastructure. We certainly hope that by next year, we’ll have a break-even operation.”
Crowley transports 150 FEUs (40-foot equivalents) a month to Cuba; during the food show, the company signed a deal to extend its $1.8 million contract with Alimport until December 2003.
Brickman estimates that Crowley moves more than 90% of the containerized cargo going from the United States to Cuba. He added that frozen chicken comprises 70% of all such exports, with the remaining 30% consisting of other frozen commodities like turkeys, along with onions, garlic and apples.
Says Charles Domínguez, Crowley’s vice-president for sales, marketing and customer service: “Our expectations are that trade with Cuba will be liberalized. They need the service, they’re an island, and like any island in the Caribbean, they want good, reliable ocean transportation for the cargo that they purchase in the United States.”
But Crowley may soon find competition from another Jacksonville-based company: Trailer Bridge. That company’s enthusiastic chairman and CEO, John D. McCown, says his $80 million in annual revenues comes entirely from its U.S. mainland-Puerto Rico trade, which is built around tugs and barges rather than self-propelled vessels.
And now that Trailer Bridge, with about 12% of the U.S.-Puerto Rico trade, has secured a license from Washington to begin offering shipping service to Cuba, McCown hopes to apply to this new market the same strategies that have made it successful in Puerto Rico.
“We have had Cuba on our radar screen for some time, and we realize that when it opens up, most particularly for shipping companies, there’s going to be a rebuilding phase which will generate massive amounts of cargo,” he told CubaNews.
At present, trade between the U.S. mainland and Puerto Rico generates around $750 million for the shipping industry, and consists of 5,000 full loads of freight per week, or around 300,000 FEUs per year. Using the accepted industry figure of $35,000-40,000 cargo value per load, that comes to $12 billion worth of goods annually. McCown points out that Cuba’s population is two and a half times that of Puerto Rico’s.
“If we were to use this as a benchmark, if there’s total open trade and if Cuba develops to the point where their buying power is equivalent to that of Puerto Rico, this market could be pushing $2 billion a year in freight revenues,” McCown said.
Despite having a license to ship, Trailer Bridge hasn’t transported a single container to Cuba because conditions must develop further, said the executive. “Nobody has scheduled service to Cuba right now. Our focus is more down the road, when things open up. We’ll only start when the volumes are significantly bigger,” he said, adding that “the business we’re longing for is appliances, tires, furniture and toys.”
Brickman concedes that Trailer Bridge “could certainly be a strong competitor” to Crowley once it decides to enter the U.S.-Cuba market.
“Anybody who has a ship, a barge or a license could be a competitor,” he said.