Navigating humanitarian deliveries to Cuba is tricky for Miami terminal operator

Posted on Wednesday, 08.08.12
Cuba shipments

Navigating humanitarian deliveries to Cuba is tricky for Miami terminal
operator
By MIMI WHITEFIELD
mwhitefield@MiamiHerald.com

Flat screen TVs, Froot Loops cereal, washing machines, laptops, bedroom
sets. No problem.

But air conditioners, a power lawn mower, clothes dryers, even an
above-ground swimming pool are rejects. The Cuban government has nixed
these items since International Port Corp. began a humanitarian shipping
service to the island from its Miami River terminal in July.

Pretty much anything is allowed by the U.S. government under the
umbrella of family aid — an exception to the five-decade-old embargo —
as long as it's shipped to an individual or by a visiting Cuban who is
returning home, said Leonardo Sanchez-Adega, IPC marketing director.
"The U.S. definition of what is allowed is very broad as long as it
doesn't conflict with a prohibition on technology transfers."

It is the Cuban government that is pickier. It recently rejected the
pool, which the shipper said was to be used as an emergency well. On an
island with a severe water shortage, personal pools are not encouraged.
The government will accept fans but not air conditioning units. Clothes
washers are fine but not energy-gobbling dryers, said Sanchez. While
bicycles are popular items to ship, the Cubans recently said no to a
motorcycle chassis and a car transmission.

Since it became the first company in more than 50 years offering direct
maritime service from Miami to Havana, International Port Corp. has been
in regular contact with the Cuban government about what's acceptable and
what's not. When an item is rejected, IPC calls the shipper to pick it
up — a better alternative than having it confiscated in Havana, said
Sanchez.

IPC, whose delivery service is licensed by the U.S. government, uses a
leased 300-foot freighter, the Ana Cecilia, and aims to make one trip to
Cuba per week.

The third shipment is scheduled to leave Wednesday. Its two 45-foot
containers are full of just about everything, even a kitchen sink. Also
aboard: equipment for a machine shop that a visiting Cuban planned to
open on the island, electronics, bicycles and many small items (a set of
pots and pans, medicine, a toilet seat, a shop vacuum, Barbie dolls,
Batman underwear and spices).

The trip takes 16 to 18 hours. Offloading occupies an hour or so and
then the Ana Cecilia turns around and returns to Miami. The eight-member
crew is not allowed to leave the ship.

On Saturday, an IPC worker was helping Hialeah resident Gladys Casanova
ready her shipment, which included cereal, powdered milk, cookies, pasta
and other foodstuffs. Her items were counted, weighed and repacked in a
clear plastic bag and listed on a manifest that accompanies each package.

"This is for my niece. She doesn't have anyone there and she doesn't
have a job even though she has studied,'' said Casanova.

One family brought three bicycles that were quickly disassembled and
weighed; another man wheeled in a shopping cart laden with two
flat-screen televisions. Others brought in PVC pipes and hardware for
home repair projects and leopard-print bedding.

Working with CubaPACK, a company set up by the Cuban government to
handle family shipments, IPC charges $6 per pound for packages up to 21
pounds and progressively less as the weight of parcels increases. For
articles such as 32-inch plasma televisions — the largest the Cubans
will allow to be sent — and tablet PCs, there are flat rates of $150.
For conventional televisions and heavier appliances, rates are based on
weight.

All rates include insurance and home delivery for shipments up to 100
pounds to locations across the island. In the Havana area, CubaPACK
promises to deliver within a week and to other locations within two
weeks. Heavier items must be picked up at the port.

It's been a learning process for IPC, which must guard against people
trying to ship in commercial quantities as well as develop an
understanding of what items are acceptable. A lawn mower, for example,
was recently rejected — perhaps because of its fuel consumption
potential in the energy-short island, said Sanchez.

But the biggest learning experience for the fledgling operation is yet
to come and will have a big impact on future business. It is Cuba's plan
to impose even more Customs fees on family aid packages.

After three hurricanes walloped the island in 2008, Cuba suspended the
Customs fees charged on family aid packages. That was true until
mid-June, when Cuba reinstated the tariffs. At this point, the fees are
affordable and are charged in moneda nacional, the currency used by
Cubans in their everyday transactions. A plasma TV, for example, carries
a Customs fee of 150 pesos ($5.66) and the fee for a 21-pound package of
miscellaneous merchandise is approximately $6.40.

Most of the Cuban-Americans who were shipping goods at IPC last week
said they had wired money to relatives to pay the fees, which are
charged when the packages are delivered. "It would be more convenient if
they could pay here,'' said Sanchez, "but we can't become a collector
for the Cuban government.''

While the current fees aren't breaking the bank for most people, the
Cuban government has said it plans to begin charging the fees in Cuban
convertible pesos (CUCs) on Sept. 3. In Cuba's dual currency system,
CUCs are used in the tourism sector and to buy scarce imported items.
One CUC is worth $1 U.S., meaning that if the same rates apply in
September, the fee for entry of a plasma TV would jump to $150.

"Even we don't know how this will be implemented,'' said Sanchez.

So IPC is telling its customers to ship as much as they can by an August
26 cutoff, which would assure their packages would be delivered before
the new rates go into effect.

Israel Navarro, of West Palm Beach, who was shipping a stroller and
layette to his daughter who is six months pregnant, isn't happy about
the potential increase. "It will be very difficult to send things,'' he
said, frowning. "This will be like a reverse embargo.''

The U.S. phased in the embargo during the early-1960s to keep U.S.
dollars from flowing to the Castro government. Through the years, the
U.S. has allowed certain exemptions for travel and humanitarian
purposes, including the sale of agricultural products, food and medicine.

The new fee schedule is apparently the Cuban government's attempt to get
control over a torrent of merchandise from the United States that has
turned into a business for some Cuban-Americans who regularly ferry
goods to Cuba to sell for profit. Since the Obama administration lifted
restrictions on travel by Cuban-Americans and gift parcels in 2009, the
number of charter flights and the amount of merchandise being sent to
Cuba has escalated enormously — so much so that Cuban state media said
the airport had begun to resemble a cargo warehouse.

So-called mulas (mules) take flights to Cuba, carrying clothes for
resale as well as supplies for hairdressers, private restaurant owners,
manicurists and others who have gone into business for themselves. Mulas
also arrive from other countries, but the Miami connection is the most
active.

Sanchez said IPC turns away shipments that are obviously commercial. "If
someone comes in here with 30 pairs of flip flops or 30 watches, we say
we can't send it. It's not a humanitarian shipment. We had to escort one
man off the property who was insisting,'' he said.

Analysts say it appears the government's intent is to cut off commercial
shipments masquerading as humanitarian aid and to encourage more Cubans
to buy supplies for their small businesses at state stores.

"This could be the end of the mules,'' said Sanchez. "There are some
handlers who manage networks of 150 mules. They have stopped operations.
They are terrified (of a crackdown)."

But Cuba's new entrepreneurs complain that the merchandise at state-run
dollar stores is scant, the prices are high and they need to get the
supplies to run their businesses from somewhere.

During a National Assembly meeting last month, Marino Murillo, Cuba's
economy czar, said establishment of wholesale markets is under study but
he didn't offer specifics.

"I think this is an example of the government shooting itself in the
foot,'' said Ted Henken, a professor at Baruch College. "Yes, every
government needs some kind of tariff controls,'' he said, but a big rise
in fees "cuts the floor out from incubating businesses.''

Meanwhile, those who ship packages to their families said they'll wait
and see what happens in September. Mercedes Martinez, of West Palm
Beach, whose recent parcel to her mother in Cienfuegos included a flat
screen television, food and medicine, said she was wary about hefty new
Customs fees. "It's still reasonable now,'' she said, "but when it goes
up, we just won't be able to send as much.''

http://www.miamiherald.com/2012/08/07/v-fullstory/2940671/navigating-humanitarian-deliveries.html