DP World moves to air cargo, bets big on Dominican Republic

DP World, like other integrated logistics players, has started thinking big on air cargo, and has started operations at its new air cargo logistics hub in Punta Cana, Dominican Republic. "We are exploring expanding into sea-air operations across Latin America – namely Peru, Colombia, Ecuador, and Chile," says Morten Johansen, Chief Operating Officer, Americas, DP World. Edited excerpts of an e-mail interaction:

What are the plans for the new air cargo logistics hub in Punta Cana, Dominican Republic?
The Dominican Republic remains a key driver for DP World’s regional growth strategy, and the launch of the air cargo hub is only the beginning. We are already working to expand capacity.

Construction is underway on the logistics centre warehouse and manufacturing facilities, which should be operational by the second half of 2024, and the maintenance and repair workshop is on a two-year timeline to begin operations. By the end of the year, all air cargo operations will be centralised through this hub.

Going forward, we are exploring expanding into sea-air operations across Latin America – namely Peru, Colombia, Ecuador, and Chile. The hub currently handles perishables, machinery, automotive equipment and seafood. We are already planning to diversify into the pharmaceutical, technology and e-commerce sectors. The air cargo logistics hub will be officially recognised with an inauguration ceremony planned for next year.

Why the focus on the Dominican Republic?
DP World began operations in the Dominican Republic in 2003 with its port facility located on the Punta Caucedo peninsula. The country was selected for its prime geographical location, which positions it as a vital transit point between North, South, and Central America, and as a gateway for shipping routes across the Caribbean.

The Dominican Republic has a stable political and economic environment, which is crucial for foreign investment, and it offers a mix of both skilled and unskilled labour, allowing for a wide range of trade operations. It also boasts trade-friendly infrastructure, making it an ideal hub for distribution.

Will nearshoring be an advantage for the Dominican Republic?
Nearshoring would certainly be advantageous for the Dominican Republic, particularly given its close proximity to the U.S., the world’s largest economy, and strong cultural relationships with communities up and down the East Coast, from Florida to New York.

Nearshoring would help drive significant economic growth from foreign investment, which could benefit the country in several ways: job creation; diversification; infrastructure investments in ports, roads, and warehouses, and skills development, particularly in areas like logistics, manufacturing, and technology.

As a result, the Dominican Republic could strengthen its position as an economic trade partner, especially across the Caribbean.

What's the idea of offering integrated logistics to customers?
Disruption is becoming more commonplace in today’s economy, and integrated logistics are essential to ensure the resilience and reliability of today’s supply chains. DP World offers a logistics ecosystem that streamlines the coordination of various supply chain activities.

How? By integrating our vast network of ports and terminals – which serve as key hubs for international trade – with logistics solutions such as warehousing, distribution, transportation, and customs clearance. By offering these integrated solutions, DP World enables our customers to manage their entire supply chain through a single, efficient partner, significantly streamlining operations while minimising time and costs.

Can the Dominican Republic become a transshipment hub?
Without a doubt, the Dominican Republic has the foundational elements to become a transshipment hub. It already has several major ports, including the Port of Caucedo, which is one of the most modern and efficient in the region and it manages 68 percent of the Dominican Republic market share.

With further enhancements, these ports are well-positioned to accommodate larger vessels and a higher volume of transshipment traffic. This development would place them in a competitive position relative to established hubs in Panama and Jamaica. The country has established various free trade zones, which can be leveraged to attract more transshipment activities, especially for industries that prioritise rapid and efficient shipping.

Expansion of integrated operations to other countries
DP World is actively pursuing the expansion of its integrated operations to other countries within Latin America in a bid to leverage its maritime and air cargo capabilities to offer comprehensive logistics solutions across the region. This involves geographic growth, service diversification, infrastructure development and operational centralisation, all designed to enhance presence and capabilities across Latin America.