Crowley Maritime, a pioneer in a trade that is still restricted under laws such as the Helms-Burton Act and Trading with the Enemy Act, has actually seen volumes fall in recent years as Cubans have begun importing more from Brazil, and perhaps Argentina.
When it comes to trade and tourism between the United States and Cuba, it takes two to mambo, and it appears Cuba, not the U.S., may be the lead partner.
“We’re excited for the progress that we see and the trade that is opening up,” says Jay Brickman, vice president of government services and Cuba service for Crowley Maritime which has been serving the limited U.S.-Cuba market for 15 years.
In the wake of President Obama’s visit last month, Americans have primarily been focused on possible changes in U.S. policy toward Cuba. Brickman, however, offered the reminder, “There is another government involved in this which happens to be the Cuban one. And the Cuban government controls probably through its various entities at least 80 percent of the imports that come into the country.”
“I think it will be a somewhat gradual growth as the Cuban government decides what it feels is best for it,” and where it wants to spend its resources, said Brickman.
Growth will also depend on “how quickly will the private sector really grow and how many restrictions will be placed on the private sector by the Cuban government in relation to how many funds are available for imports and how they want to channel these imports,” he added.
Crowley offers about three sailings a month to Cuba, using containerships with 974 TEUs in capacity. Trade is almost entirely southbound, with Crowley ships sailing from Port Everglades stopping in Havana’s Port Mariel before proceeding to Guatemala, San Salvador, Honduras and Nicaragua.
Trade with Cuba is still restricted under laws such as the Helms-Burton Act and Trading with the Enemy Act, Brickman noted. In addition to restricting what products can be transported to and from Cuba, carriers like Crowley are restricted in moving products from Cuba to other foreign nations.
And Crowley’s container volumes have actually fallen in recent years. Crowley used to carry about 50 containers — mostly 40-foot reefers of chicken — to Cuba, but today typically moves about 30 per voyage. Large amounts of poultry and other products such as grains and pulses move to Cuba not on containerships like those operated by Crowley, but on chartered vessels.
According to the USA Trade Online database maintained by the U.S. Census Bureau, 297,765 metric tons of goods were exported to Cuba in 2015, 106,637 tons of which was poultry. Of that, 11,677 tons was containerized, and nearly all of it was poultry (11,215 tons).
Those volumes are a far cry from those of the mid 2000’s. In 2008, for example, U.S. exports to Cuba reached 1.77 million tons, and 53 million tons of containerized cargo.
Brickman notes that Cubans are importing more from Brazil, and perhaps Argentina.
One advantage Brazil can offer Cuba is credit, he says.
In addition, Brazil has supported development in Cuba, a prime example being at the Port of Mariel, 25 miles west of Havana. The new container terminal that opened there in 2014 was financed largely by the Brazilian development bank BNDES and built by the Brazilian construction company Odebrecht. The facility is run by Singapore-based terminal operator PSA International.
Brickman also said the tourist trade to Cuba is definitely bustling, but many of those products are sourced from Europe, the Far East, and other countries in the Americas, including Canada.
Ocean carriers like CMA CGM, Maersk, and Melfi Marine, the Cuban national carrier, connect Cuba with a wide range of countries.
Cuba is also putting restriction on the tourist trade. Carnival has started a new brand, Fathom, aimed at the “social-impact market” where passengers will volunteer with local organizations in addition to sightseeing. But the Cuban government is placing restrictions on the ability of native-born Cuban Americans to visit their homeland. That policy sparked demonstrations in Miami and a federal discrimination lawsuit this week.
Most of the poultry that is sold to Cuba today is chicken legs and chicken quarters, low cost products that are “good quality protein at an affordable price,” says Toby Moore, vice president of communications at the USA Poultry and Egg Export Council.
Last year Cuba was the sixth largest export market for U.S. broilers, behind Mexico, Canada, Taiwan, Angola, and Hong Kong; the prior year it was the fourth largest.
Source: U.S. Census Bureau
If the tourist trade increases, Moore said there will be an opportunity for U.S. producers to sell more breast meat and other higher value products.
Eventually, there could be two-way trade with exports from Cuba to the U.S. Cigars and humidors would probably find demand, along with other handicrafts and artwork. Citrus is another potential export, said Brickman.
Rum could potentially be a major export from Cuba as well, but there are thorny legal issues to be worked out. The most famous brand in Cuba is probably “Havana Club” rum.
In January, the U.S. Patent and Trademark Office awarded a trademark to the Cuban government for the Havana Club name, but Bacardi, whose assets were seized by the government after the revolution, also sells a product with the same name and filed a lawsuit in Washington in March seeking to have the Patent Office decision overturned.
Bacardi prominently mentions on its website that “In October 1960, revolutionary government forces illegally confiscated all Company assets in Cuba – a devastating heartache for a business just shy of its 100th anniversary.” Bacardi today manufactures product in many locations, including Puerto Rico.
