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Some maritime carriers express warm feelings about U.S.-Cuba thaw

Mar 31, 2015 01:02 PM
Florida-based maritime operators would like to offer ferry service to Cuba. With only 225 nm separating Miami and Havana, cruise and cargo service would be other possibilities.

Pat Rossi illustration

Florida-based maritime operators would like to offer ferry service to Cuba. With only 225 nm separating Miami and Havana, cruise and cargo service would be other possibilities.

The Obama administration’s recent easing of certain trade-embargo rules has maritime operators dreaming of potential U.S.-Cuba service, and the regulations point to some possibilities.

Cruise lines, cargo carriers, oceanography researchers and prospective ferry operators are eager to take advantage of any thawing in Washington’s relations with Cuba. With only about 225 nm separating Miami and Havana, a natural market would instantaneously be created for family visits, tourism, cargo trade and humanitarian exchanges.

Over the past few months, President Obama announced that the half-century-old Cuba trade sanctions would be amended to allow certain travel and transactions between the tense neighbors. While the so-called “180-day rule” is still in place for bluewater ships, more exceptions are allowed for cargoes including farm goods, medical and telecommunications equipment, and some construction materials.

United Americas Shipping Services (UASS) wants to be first in line to offer ro-ro ferry service between Florida and Havana. The Miami-based company applied five years ago for permission to offer passenger service between South Florida and Havana, arguing at the time that marine transport should be treated the same as the airline industry, which was granted limited permission to serve Cuba.

Now that the Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Department of Commerce have eased several restrictions, it will be easier for companies and authorized people to obtain federal licenses to visit and conduct business with the still-Communist nation of 11 million people.

“We are cautiously optimistic,” UASS President Joseph Hinson said. “We are working very diligently to see what the next step is in the U.S. and how quickly they’d be agreeable to have a ferry operate, and on the Cuban side, how ready they are to receive a ferry service.”

U.S.-based cruise lines, including Carnival, have said they are eager to add Cuban ports of call to their Caribbean itineraries in anticipation of a wave of curious tourists. Cruise Lines International Association said it is studying the new U.S. amendments.

“CLIA is assessing the full implications of President Obama’s announcement about Cuba,” the association said in a statement to Professional Mariner. “There are a number of factors for consideration before a cruise line would commit to adding a destination to an itinerary. With Cuba, these include infrastructure and port facilities, and regulatory and policy considerations.”

OFAC rules bar most commercial vessels from traveling to the U.S. if they have called in Cuba within a 180-day period. Michelle Otero Valdes, a maritime attorney with Chalos & Co. in Miami, said it is apparent that full cruise service between the U.S. and Cuba is still not allowed. The new rules, however, provide for exceptions in which federal officials may grant general licenses.

“The 180-day ban would still apply, unless of course the entire ship carries students and teachers and staff that are attempting to sail to Cuba — in other words, on an educational or humanitarian mission,” Valdes said.

Among the U.S. cargo operators who already have carried goods to Cuba under previous rules are Crowley Maritime and Dan-Bulk Shipping. Since 2001, Crowley has run a once-a-week container service, carrying mostly frozen U.S. poultry, from Port Everglades to Mariel. Even UASS, which aside from being one of North America’s largest ro-ro ferry operators has a dry-bulk fleet, has carried American grain to Cuba out of the Mississippi River and from Norfolk and Tampa. 

Jay Brickman, Crowley’s vice president for liner services, calls the recent announcements “a very important first step” but it’s too early to tell when or if a great expansion of cargo services will result.

“It will lead to other steps that will lead to increased commerce, but we’re not there yet,” Brickman said. “There is a great deal of confidence-building that needs to be done.”

TransAtlantic Lines, based in Greenwich, Conn., regularly travels to Cuba because four of its vessels are chartered to the Military Sealift Command to deliver cargo to the U.S.-leased Guantanamo Bay (GTMO or “Gitmo”) naval facility.

The new exceptions open up the possibility that less-restricted voyages between the two countries would be possible if ships are carrying the approved cargoes, e.g. agricultural commodities. The Commerce Department still requires vessels to obtain an export license.

“I can see a bulk carrier going from, say, Argentina to Cuba calling in the United States, where they weren’t able to do that before,” Valdes said.

“Now that we have an opening with respect to building equipment and tools for the private sector to construct and renovate privately owned businesses and places of worship, you are going to be able to now send building equipment like rebar and Sheetrock that right now only goes to Gitmo to the U.S. government,” she said. “I could see that cargo being a boon if people can pay for it.”

Because educational, environmental protection and humanitarian projects can get approval, Valdes believes universities with their own ships may be eligible to travel to Cuba now. She’s not sure about private tugboats and dredge businesses that want to perform coastline restoration.

“I think you might see people wiggle their way to try to get the export licenses, such as the oceanographic groups with the medium-sized research vessels,” Valdes said.

U.S. Coast Guard and Cuban maritime authorities have had a semi-cooperative relationship over the years in search-and-rescue, drug interdiction and traffic separation. One shipping lane en route to Haiti, for example, skirts the northern Cuba coast, and U.S. vessels generally are unmolested into and out of Guantanamo Bay. Still, there have been tensions, particularly surrounding salvage cases and incidents of vessels with propulsion problems. At least two U.S. vessel owners have accused corrupt officials of luring disabled vessels into Cuban waters and then seizing them for the purposes of stealing the cargo.

Another reason to be cautious is that the recent amendments place several conditions on the Cuban government and are pegged to private-sector enterprises that may not come to pass. Plus, the broader trade embargo stays in place unless Congress acts.

A Miami-to-Havana ferry, running at an average of 20 knots, would take about 12 hours. Other departure points being discussed are Port Everglades, which is approximately 245 nm from Havana, and Port Manatee, 345 nm from Havana, Hinson said. The Mariel deepwater port and special economic zone near Havana is a potential Caribbean cargo transshipment hub. 

Florida companies that have expressed interest in providing ferry service to Cuba include Key West Express LLC and Havana Ferry Partners LLC at Port Manatee. Spanish operator Balearia runs a fast ferry between Port Everglades and the Bahamas and could be poised to enter the Cuba market.

For years, UASS said the Commerce Department already had the authority to grant a license for a ferry service to Cuba. Hinson said at first it may be passengers-only, plus their personal effects. Then the company is hoping that roll-on, roll-off cargo service will be allowed on the same boats. That’s UASS’s specialty on its Mexico, Puerto Rico and Dominican routes. 

The new rules specifically mention “the transportation of authorized travelers by vessels” in noting when general licenses may now be granted.

“It’s a ‘case-by-case basis.’ We are trying to get an interpretation as to what ‘case-by-case basis’ means — a single voyage or a single carrier offering regular service?” Hinson said.

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