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Puerto Rico Air Cargo Committee asks federal gov’t for help on air cargo hub

The members of the Puerto Rico Air Cargo Committee recently asked the US Government Accountability Office for support of the island’s bid to promote the development of the two-year air cargo transshipment exemption granted by the US Department of Transportation.

The federal agency granted a waiver to allow foreign air carriers to provide certain expanded cargo and passenger transfer services at Puerto Rico’s international airports over a two-year term.

Department of Economic Development and Commerce (DDEC) Secretary Manuel Cidre said a letter was sent to that effect to Heather Krause, director of infrastructure at the GAO. In the letter, they also requested additional information on air cargo traffic, to provide for a more robust case, and expand operations on the island.

They also stated that, contrary to “Puerto Rico being a risk due to unpredictable weather conditions,” as the GAO stated in a report released in October 2020, “the resilience plans that our current commercial sector already has in place, make the island even stronger and ready to expand the aerial hub.”

Such exemption of air cargo “is one of the main tools with which the local government, together with InvestPR and the private sector, seeks to maximize, since it is a great instrument that comes to us at an ideal time and that the United States wants manufacturing companies to return to the United States,” said Cidre. “This will undoubtedly be key in our strategy to continue promoting the island as a unique destination to do business.”

Cidre added that there are several airlines that have already requested an incentive under Law 60 for airlines, and other agreements are being negotiated to start routes to Puerto Rico. He also said working together with the Puerto Rico Products Association, they have identified some of the priority projects on the infrastructure side that would support the matter of cargo transfer.

“Still, we’re looking for an expert consultant in cargo and logistics related issues at a global level, that can help us make the most of this great opportunity to promote economic development on the island. Proposals are being evaluated,” said Cidre.

The government’s position is to get the maximum benefit from the exemption for the transfer of air cargo and international passengers, to position Puerto Rico as a transshipment center in the Caribbean, “providing strong marketing and direct promotion to the companies,” he said.

“Another concerted effort is aimed at continuing the collaboration with the federal government to attract more investment in the manufacturing area, and this exemption is an added value for these purposes,” Cidre added.

Meanwhile, Rodrick Miller, head of InvestPR, said the office has worked hand-in-hand with several sectors to develop a promotion plan based on the unique advantages that Puerto Rico offers as a transshipment hub.

“We also developed a selection of prospects, based on those companies with operations abroad, whose market is mainly in the United States, and for which Puerto Rico provides competitive value,” said Miller.

“As part of the Committee’s work plan, we have held meetings in Washington, D.C. with federal agencies, organizations in the airline and transportation industries, as well as interested companies, to position Puerto Rico within the framework of the opportunities that have arisen in response to the pandemic,” added Miller, who projected after the extension of this exemption in the first two years, that there should be a multiplier effect on overall trade.

Citing a report from the University of Puerto Rico , the government estimates the creation of at least 6,000 direct and indirect jobs, among other benefits, whose economic impact is estimated at $219.3 million.

The letter explained that the government of Puerto Rico established the Air Cargo and Labor Leadership Committees to assess needs, identify strengths, and work on the implementation of initiatives to support this historic opportunity and increase industry opportunities in the island.

“We feel the need to carry out a further study, because this is an opportunity to educate Congress and federal partners about Puerto Rico’s worth, and ensure the supply chains of critical goods for the nation …,” reads part of the letter.

Meanwhile, the Puerto Rico team refuted the letter, specifically the part of the Report that said “the development of a Puerto Rican air transfer center would negatively affect Miami.”

Given this, they responded, as has been evidenced in “other parts of the country,” “regional air hubs develop greater volume capacity through individual ports within that region. Puerto Rico’s existing strengths in biosciences, an established niche, could be developed on whatever basis Miami provides,” the local group stated.

Committee members recognized the exemption as an opportunity to expand an already world-class logistics sector, into a global center that can create new economic opportunities on the island, as well as additional support for existing industries.

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This story was written by our staff based on a press release.

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