The Dominican Republic has a strategic geographical location and strong connectivity to important trade routes that have made it a potential key logistics hub to move goods through the Caribbean and Central America efficiently. To this end, public and private sector investments have sought to make the Dominican Republic a logistics hub that can respond to growing trade volumes. Recent government investment initiatives, modernization efforts at national ports, and foreign trade activity have laid the groundwork to turn the Dominican Republic into a logistics hub.
Significant Investment in Ports
The Dominican government and the private sector have invested US$531.5 million in the national port system. Dominican President Luis Abinader announced that a modernization program at national ports has increased financial results, while the special agreement allowed to pay off debts amounting to RD$1.3 billion, to double the income of the Dominican Port Authority (Apordom), and to increase monthly collections from RD$56 million to RD$140 million. In this context, it is essential to make the Dominican Republic a logistics hub, ready to meet the demands of international trade and current market needs.
Foreign Trade Activity
Foreign trade activity is another indicator that sets the tone to turn the Dominican Republic into a logistics hub. According to the National Statistics Office (ONE), 65.5% of Dominican exports in 2024 were carried out through maritime channels, a year-on-year increase of 6.1%. Haina Oriental Port accounted for the majority of export activity, totaling US$4,170.4 million, followed by Las Américas International Airport with US$3,363.4 million and the multimodal port of Caucedo with US$2,228.9 million.
The increase in volume represents growth and the country’s strategic intention to optimize the operation of the ports of the Dominican Republic, to allow a more fluid transit of goods and services to the various markets in the world. The investment in infrastructure for cargo terminals and infrastructure, as well as the decision to improve operational efficiency, has allowed the Dominican Republic to position itself as a potential logistics hub for the region.
Network of Specialized Ports
In the Dominican Republic, there is a network of ports of various types and specializations that allows the management of a wide variety of goods in transit. Here are some of them:
- Arroyo Barril (Samaná): This port handles general cargo and also accommodates cruise ships.
- Azua: This port specializes in the reception and dispatch of liquefied petroleum gas, as well as cement and clinker.
- Barahona: Another specialized port in gypsum, salt, and cement exports.
- Boca Chica: A port that was built to service the sugar industry and that now receives containers and tourist ships.
- Manzanillo (Montecristi): It is another multimodal port that receives imports of clinker and exports refrigerated containers of bananas.
Puerto Plata, San Pedro de Macorís, Cabo Rojo, Amber Cove, La Romana, and Caucedo are other important ports for transit. The diversity of facilities and infrastructure reinforces its potential to make the Dominican Republic a logistics hub.
Competitive Context
The average score for Latin America and the Caribbean on the 2023 Logistics Performance Index (LPI) was 2.7 out of 5.0, below the global average of 3.0. Panama, Mexico, Chile, Argentina, and the Dominican Republic reported a decline in their scores, while other indicators improved (infrastructure from 2.5 to 2.6, quality of logistics services 2.7, and tracking and tracing 2.8). Brazil had the best score in the region at 3.2, followed by Panama at 3.1. Venezuela, Cuba, and Haiti were at the lower end of the scale.
To turn the Dominican Republic into a logistics hub, it is necessary to work on the operations of ports and logistical nodes, in addition to improving the quality of service and increasing supply chain efficiency. With these actions, the country could compete with other regional countries that are in the logistics business.
Expert Insights
According to Phany Benítez, Business Manager of PHIA Logistics, the Dominican Republic’s geographical location, together with its direct connections to the U.S., Mexico, Central America, and the Caribbean, makes it an ideal destination for transit and redistribution of goods. She also points out that DP World Caucedo, in Boca Chica, “is the one that receives the highest number of containers, both in imports as well as in exports, and continues to be the first gateway in foreign trade of the country.”
Caucedo, added the expert, stands out for its modernity, in terms of infrastructure, technology, and handling of containerized cargo, and is among the best ports in the Caribbean. The Haina River Port is also one of the main ports, but it is an older port with a smaller draft. It has, however, been working on its expansion to receive more vessels and streamline operations to be able to efficiently receive bulk cargo, fuel, vehicle imports, and a large diversity of merchandise.
Efficient Ports for both Importers and Exporters
Both Caucedo and the Haina River have efficient facilities that meet the operational needs of importers and exporters, according to Benítez. While Caucedo is better equipped for containerized cargo and large shipments, Haina, for its part, offers logistical advantages for bulk cargo and certain imports that do not require containerization. They are two complementary ports in their own way, and they are at the center of the plans to make the Dominican Republic a logistics hub.
Operational Challenges
As challenges, it has been reported that operations have been affected on some occasions by a lack of chassis to pick up and return containers to the shipping lines. This, to a greater or lesser extent, slows down some processes and has generated some congestion in some cases. As such, for the Dominican Republic to be a logistics hub, it must have investments in infrastructure and technology, as well as more operational efficiency to efficiently handle the growing volume of trade in an increasingly competitive context.
Export Markets
Dominican exports have a strong presence in the United States, the European Union, and Canada, among others. Products such as cocoa in all its forms, fresh and dried banana, cigars, jewelry, and pharmaceuticals have high demand in the international market. The expansion of port capacities and the reduction of bottlenecks in logistical operations are important measures to turn the Dominican Republic into a logistics hub that can support these and other high-value export products and services.
Conclusion
With strategic investments and positioning, in combination with a modern port infrastructure and improved operational efficiency, the Dominican Republic has taken major steps to make itself a leading logistics hub in the Caribbean region. The combination of factors such as public-private investment initiatives, the network of specialized ports with competitive advantages, and foreign trade activity, reinforces the competitive advantages of the Dominican Republic as a potential logistics hub. Solving operational bottlenecks and continuing to invest in new logistics and technological infrastructure are essential to make the Dominican Republic a logistics hub recognized in the region and abroad.