Logistics sector becomes a catalyst for the Dominican economy

Connectivity, infrastructure and the legal framework have supported the concentration of logistics operations in the country and its opening and expansion in global distribution chains. With thirty destinations in the Caribbean basin and twenty logistics operators with regional reach, the Dominican Republic has become a regional logistics HUB of global interconnection, which allows the Dominican economy to have greater capacity for foreign trade.

The increase in imports and exports after the pandemic has been evident in these results.Total exports accumulated US$7,039.9 million in January-July 2021 and imports increased 68.3 % in July, in line with the accelerated recovery of domestic demand.

In this regard, local and international experts will analyze in THINK LOGISTICS “Evolution through Innovation” what will be the growth, competitiveness and sustainability of the sector in the short and medium term. The event, to be held on October 26, in virtual format, is organized by the Swiss-Dominican Chamber of Commerce and Tourism (CCTDS), supported by the Embassy of Switzerland in the Dominican Republic.

“Logistics is a catalyst and propeller of other industries of the national economy such as manufacturing, trade and tourism. By increasing its competitiveness, we increase the country’s competitiveness and its national development strategy. The extended hours of clearance of goods at the ports by the Directorate General of Customs, through its director, Eduardo Sanz Lovatón, and the nearshoring of free zones and local industry, promoted by the Ministry of Industry, Commerce and Mypimes, through Minister Ito Bisonó, with legislation and trade agreements, mainly with the United States, are proof of the effectiveness of the economic development strategy of President Luis Abinader and his team,” said Gaetan Bucher, president of the CCTDS.

“The pandemic has accelerated digitalization processes and, as a consequence, ports, airports and warehouses, as part of this industry, have transformed themselves in search of increasingly agile processes, to ensure the success of their customers and guarantee supply to consumers,” explained Alexander Schad, president of the Association of Logistics Operators (ASOLOGIC), CEO of Schad Logistics and vice president of the CCTDS.

The main changes taking place in this field are aimed at improving technology, simplifying procedures and processes, and investing in infrastructure.

As an example of the importance of this sector, in more developed economies where the impact of this sector is accurately measured, for every 100 direct logistics jobs, another 84 jobs are generated by its suppliers in the areas of automotive, energy, technology, real estate, construction, and other related services.

Its impact covers a wide range of productive activity. “Knowing the marketing and distribution flows of products, it is possible to support the work of national SMEs and large companies with a customized logistics to the real needs, combining the supply to traditional channels and online media,” said Bucher.

It should be noted that the Covid-19 pandemic has caused a very significant increase in transportation costs, which has put pressure on the prices of raw materials and finished products. These increases occur because of disruptions in global supply chains, such as the closure of ports, airports and manufacturing plants, the slowdown of port work due to Covid, and an unexpected increase in demand for consumer products.It is possible that high freight costs will extend into 2023. However, the bottleneck should be leveled by the daily inflow of a large number of new containers, as well as the entry of ships in early 2022.

Reducing risks in the supply chain has become a priority for companies. Globalization is undergoing structural changes, driven by the geographic diversification of production centers. Sustainability is key to further strengthening the supply chain: “The use of low-sulfur fuel in ships or electric vehicles, clean energy, represent changes in this model,” concluded Schad.

 

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