Shipping News

By Beau Denton August 31, 2004

by Nancy Wollin

The Port of Havana is just 306 nautical miles from the docks of Port Manatee. Until recently, though, it might as well have been 300,000 miles. The United States government embargoed trade with Cuba in 1961, considering almost all attempts to transact business with the communist regime as tantamount to trading with the enemy, punishable by heavy fines and even imprisonment.

But beginning in 2000, with the passage of the Trade Sanctions Reform and Export Enforcement Act, the federal government began allowing exports of food, medicine and medical supplies to Cuba. While trade is still anything but free, forward-thinking businesspeople, many opting to keep their Cuba trade aspirations secret, are eyeing opportunities there, hopeful that the easing of trade sanctions is an indicator that the four-decade-old embargo will soon be lifted. And if Port Manatee has its way, it will be able to leverage its proximity to Cuba (it's the closest Gulf seaport to Havana), its easy access by road and rail, and its expansive warehousing and storage capabilities to become a preferred seaport for the shipment of goods to and from the island nation.

"The port has expended a lot of time and effort, and a lot of money in developing opportunities with Cuba," says Steve Tyndal, Port Manatee's director of trade development and special projects. "There is important groundwork that has to be done to develop the right relationships with Cuban officials. This is virgin territory for Port Manatee. It's been a lot like prospect mining."

Tyndal estimates that the port has spent $45,000 to $50,000 in the last 18 months for the services of a Cuba trade consultant and in travel expenses in preparation for an opening of trade. Port officials, including Tyndal and executive director David McDonald, have traveled to Cuba to meet with the country's government-controlled agricultural importing entity, Empresa Cubana Importadora Alimentos (Alimport), and have been discreetly discussing trading opportunities with potential U.S. exporters.

Late last year, McDonald signed a Memorandum of Understanding (MOU) with Alimport, calling for mutually beneficial trade relations. The MOU, Tyndal explains, was an important first step in positioning Port Manatee as a preferred destination for Cuban trading ships. Cuba has exclusive control over which ports it chooses to transact business with. By entering into this understanding, the port and Alimport agree that Cuba will send ships to Port Manatee to pick up cargo, and that Port Manatee will encourage U.S. exporters to sell their products to Cuba.

"The MOU provides a framework for doing business with Cuba," Tyndal says. "It basically says that we are a port authority that can attract business for Cuba. It means that we qualify under the guidelines to ship food and medical supplies to Cuba under the modified trade embargo."

Port Manatee was the first Florida port and the second U.S. port to enter into a MOU with Alimport. Since then, dozens of ports around the country have followed suit. The document spurred some dissent among the members of the port's governing body-the Manatee County Port Authority, comprised of Manatee County commissioners-since it originally stated that the port opposed trade sanctions. The authority finally agreed to ratify the statement once offending language was removed; it has yet to be presented to Alimport for final signature.

Getting local businesses to openly hop on the Cuba bandwagon has been another challenge for the port. To date, only two shipments totaling 6,150 tons of phosphate-based animal feed from PCS Phosphate located in White Springs, Fla., have made their way from the port to Cuba. At press time, Naples-based J.P. Wright & Company had scheduled a shipment of 300 head of beef cattle for export in late July or early August. But Tyndal isn't concerned about the current lack of export business to Cuba; he's thinking long-term opportunities.

"A lot of people are talking about trading with Cuba but they are reluctant to show their hands. Let's face it, the governor's brother is the president," he adds, alluding to the politically charged nature of Cuba politics in Florida and the political clout of some Cuban exile groups, which oppose any U.S. relations as long as Cuba remains under the dictatorship of President Fidel Castro.

Stanley Riggs, president of the Federal Port Corporation, which is developing warehouse space contiguous to the port, agrees.

"There are a lot of closet Cuba future traders out there in the Tampa Bay area," Riggs says. "There are these meetings that are very secretive, kind of like an AA group. Sometimes 40 to 60 people show up. They keep a low profile because there is a lot of sensitivity in Florida about Cuba. These meetings never get publicized because the people are self-conscious. They make sure that reporters and people from the government aren't aware of them. People want to stay under the radar; they're not ready to come out of the closet yet."

Although Riggs refuses to violate the code of secrecy surrounding these Cuba embargo-watchers, he remains confident that once the embargo is lifted, there will be a rush of local businessmen eager to openly transact business with Cuba. And he believes it will be the people who had the foresight and the courage to begin establishing relationships with the Cuban authorities now who will reap the majority of benefits once U.S. trade restrictions are lifted.

"The day you pick up the newspaper and see that trade is open, you'll see businesspeople flocking to get down there, to establish relationships for trade. But by then the train would have already pulled out of the station," Riggs says. "The Cuban officials I've met with have told me that when trade opens up with the U.S., they're not going to be looking through the yellow pages to decide what ports to use, what shippers to contract with, what businesses to contact. They're going to flip through the business cards that are in the Rolodexes on their desks. If you want to do business with Cuba, you've got to start forming those relationships now."

The Bush administration last year tightened travel to Cuba, and that has some people wondering if trade will be tightened as well. No, according to Kirby Jones, a Cuba trade consultant to Port Manatee through Washington, D.C.-based Alamar Associates. "No matter who is elected, travel will likely be allowed early next year," he says. "The pressure in Congress is strong. If Kerry gets elected, travel restrictions will be lifted in two to three months. If Bush is re-elected, the travel ban could be lifted as early as January. And once travel goes, the embargo is over."

Tyndal is confident that, along with the port's foresight in forging an early relationship, Port Manatee has strong political and strategic advantages that will serve it well in the future.

"The embargo is 40 years old and Port Manatee will be 34 years old this October," he says. "The political baggage that other ports and communities have with Cuba doesn't exist. We are starting off with a clean slate."

Tyndal also points out that, along with the port's proximity to Havana, it's also in a rural location. And while the lack of a big-city address has presented problems from a public relations/branding standpoint, it's also a plus. Many of the port's competitors are located in congested urban areas, making it difficult to move cargo in and out. By contrast, Port Manatee, located on a rural stretch of Highway 41 in Palmetto, can be accessed by interstates 75 and 275, State Road 19 and U.S. 301 and the CSX railroad, which runs in front of the port.

Riggs, who recently purchased 21 acres of land adjacent to the port and is constructing 400,000 square feet of warehouse space to serve port customers, sees the port as the logical gateway to Cuba trade. "I looked at 12 ports in the state before deciding that Port Manatee provided the best location and opportunity for a warehouse project of this size," Riggs says. "Port Manatee has truck accessibility unsurpassed in Florida. It could take as many as 700 trucks to unload a large container ship. It would be tough to bring 700 trucks to Miami or Fort Lauderdale or Palm Beach. And you have to go through 28 stoplights from the Port of Tampa before you get to the interstate. At Port Manatee, you leave the port and there are zero stoplights all the way to the Canadian border. That's what makes Port Manatee such an enviable location. You've got direct contact to the interstate network."

The port also boasts refrigeration capabilities that rival some of the country's largest and busiest ports. Containers holding perishable goods can be hooked up directly to refrigeration lines, negating the need to offload cargo into refrigeration warehouses. This, Tyndal explains, saves the shipper both time and money and is a real asset when it comes to attracting Florida's agricultural business.

"Charleston has the sixth largest container port in the U.S. and Port Manatee has as many refrigerator plugs as it does," Tyndal says. "For example, frozen chicken is one of the biggest export commodities going to Cuba and we could handle a large shipment of frozen chickens as well as or better than many larger ports."

"A lot of people involved in Florida agriculture are talking about opportunities in Cuba," Tyndal acknowledges. "Most people see it as a 'definite maybe' as far as future opportunities go, but the absolute reality is that there is, right now, an opportunity for unilateral trade in agricultural products. We offer great cost benefits for anything grown in Florida, any agricultural products such as oranges, tomatoes, chickens, eggs, dairy cows, pork. Florida is one of the most prolific agricultural states in the country and the opportunity is there to sell these products right now to the Cubans."

Tyndal is convinced that the port's foresight in forging a business relationship with Cuba will serve the state and the local business community well in the long run.

"We have an obligation to be a catalyst for international trade in Manatee County," he says. "We have to think about Cuba in the long term. Establishing a relationship now means we have a new customer in a favorable proximity to the port that regional businesses can take advantage of. The real opportunity is for area businesses. The port is just the conduit. The whole equation is going to be cost driven. Because of Port Manatee's proximity to Cuba, we have a real and apparent advantage. It's the Cubans who are doing the buying and they're going to buy goods that can be delivered at the lowest cost."

Cuba facts

At 42,804 square miles, Cuba is the largest Caribbean nation, roughly the size of Pennsylvania.

Cuba's population is approximately 11 million.

U.S. exports to Cuba in 1999 totaled $4.5 million.

U.S. exports to Cuba in 2003 reached $259.2 million.

January through April 2004: $176.3 million worth of U.S. goods reached Cuba's shores.

Estimated U.S. exports to Cuba in the absence of sanctions: $685 million to $1.0 billion annually

Estimated U.S. imports from Cuba in the absence of sanctions: $69 million to $146 million annually

If there were no trade restrictions with Cuba, exports of machinery alone would total $120 to $154 million annually in the short term. A post-embargo construction boom is anticipated, and building materials, air conditioners, refrigerators and other household appliances will be in high demand.


The CIA Handbook of Trade Statistics

The U.S. Census Bureau

The U.S. Department of State Fact Sheet: Cuba, July 30, 2003

The United States International Trade Commission: The Economic Impact of U.S. Sanctions With Respect to Cuba, February 2001

Miami Chamber of Commerce, The Trade Impact Of A Free Cuba, March 2004

Filed under
Show Comments