The Cuban Regime Has No Solution for the Port of Mariel Crisis

Mariel Special Development Zone – ZEDM

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 27 September 2023 — Cuban state press just released information on freight traffic through the port of  Mariel’s container terminal. Forecasts for this year point to around 300,000 twenty-foot container units (TEUs), a figure close to what it was before the COVID-19 pandemic. But it’s too early to celebrate for several reasons. First of all, Mariel plays only a marginal role within the Latin American and Caribbean region. The numbers say it all.

The most important ports in the area in terms of volume are, in descending order, Colón in Panama, Santos in Brazil, Manzanillo in Mexico, Cartagena in Colombia, Panama Pacific, Callao in Peru, Guayaquil in Ecuador, Kingston in Jamaica, Buenos Aires’ two urban ports, San Antonio in Chile, San Juan in Puerto Rico, Buenaventura in Colombia, Caucedo in the Dominican Republic, Lázaro Cárdenas in Mexico, Limon Moin in Costa Rica, Veracruz in Mexico, Freeport in the Bahamas, Itajai in Brazil, Valparaíso in Chile, and Altamira in Mexico.

Yes, you heard that right. In this long list, Mariel is nowhere to be found. Castro triumphalism aside, we are talking about a marginal facility that goes unnoticed amid the extensive and consolidated network of Latin America and the Caribbean ports.

The U.N. Economic Commission for Latin America and the Caribbean (CEPAL) took a look at the volumes these ports handle and all of them clearly have figures much higher than the meager 300,000 TEUs that the Cuban press touts as evidence of Mariel’s success. The port of Colón alone moves more than four million TEUs, a volume so much greater than Mariel that it is hard to phathom. This does not stop Mariel’s deputy-director from trying to highlight the importance of the increase in containerized goods passing through the port.

But a measly 300,000 TEUs simply confirms that Mariel is a business failure. Despite all the time that has passed and all the money that has been invested, the port has still not been able to turn a profit. Business failures are a feature of Cuba’s communist regime. While other ports in the region benefit from the growth commercial and passenger traffic, Mariel is still trying — after three years — to get back to 2019 levels. Back then, what they call “infrastructure services to shipping companies” amounted to 800,000 TEUs. The master plan calls for a total capacity of three million TEUs using twenty-four Super Post Panamax cranes. We’ll see if they can make that happen but it does not look like it will be easy.

Meanwhile, the regime keeps on doing what it does: investing in hotels which remain empty because there aren’t enough tourists. So now it is focusing its investment strategy on Mariel in hopes of creating what the container terminal’s general director, Martín José Spini, describes as the most modern infrastructure in the region. These Castro-era managers do not know how lucky they are not to have to answer to boards of directors keeping an eye on the cash flow and monitoring the return on their investments.

The regime, relying on an anachronistic view of maritime traffic, is convinced that it must invest in Mariel, and not just because it could be a possible source export earnings. They believe it could be an ideal transfer point, a stopover between Asia and ports in the Gulf of Mexico and the Caribbean. Someone should tell them that the Manila galleón — the old trade route that once operated between Spain’s colonies in the Americas and its Asian territories — dried up a long time ago. And 21st-century China sees no need to revive it.

Work is being done to enlarge the channel so that the container terminal — the primary user of the Mariel Special Development Zone — can accomodate Neopanamax vessels. These large ships measure 366 meters long by 52 meters wide, with and underwater depth of 15 meters. Dredging the channel, an expensive operation that was carried out in three stages, involved biological studies, environmental impact studies and technical-executive projects, all done entirely by GeoCuba Estudios Marinos.

As almost always happens in these cases, the regime is blaming Mariel’s failure on the Torricelli Act, part of the framework of economic, commercial and financial sanctions that make up the U.S. trade embargo on Cuba. According to the port’s management, the law hinders the ability of ships that dock at Cuban ports to later use U.S. ports, a limitiation that precludes, for the time being at least, the possibility of using Mariel for transhipments.

Okay, but everyone already knew this would happen back when Mariel’s Brazilian backers laid the first stone there years ago. The dispute with the United States has being going on for six decades so those who risked their capital on Cuba’s communist regime knew what they were getting into.

No one could expect a change in the status quo without the regime making some moves towards democracy and freedom. So no one can use the embargo as an excuse because it was an issue that existed before work on the Mariel project began. If the situation remains unchanged, the person responsible is the one who refuses to budge.

The Mariel authorities are trying to carry on with this adventure, knowing it won’t get them very far. They hope to do this by providing trade and transport services to ships that transit through the Caribbean on their way to other ports in the region, Asia and northern Europe. Their selling point is the chance to cut transit times and freight costs but they are clinging to an outdated idea of how trade works that makes little sense in these times.

Low TEU levels are not the only indicactors that Mariel is in crisis. There is also in the inadequate infrastructure that makes it unable to compete with the large, consolidated ports of Latin America and the Caribbean. It’s a wasted effort. Communist leaders should spend some time visiting ports like the one in Panama more frequently.


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