Puerto Rico seems like an island para\u00addise, full of history, picturesque beaches and bright, sunny days. But for the past decade, this small Caribbean territory of the United States has seen its economy shrink by 14 percent, with employment dropping 12 percent over the same pe\u00adriod, according to The Economist.
\nThe economic decline began in 2006, when tax credits for companies that set up manufacturing on the island expired. Many younger workers left for the mainland, leaving an older, poorer population that strained the territory\u2019s social services. From a peak of 3.8 mil\u00adlion in 2004, Puerto Rico\u2019s population fell to about 3.5 million in 2014, and the territory is now approximately US$72 billion in debt. In January, negotiations to restructure the Puerto Rico Elec\u00adtric Power Authority\u2019s $9 billion debt collapsed. Despite these problems, it is unlikely that the U.S. Congress will bail out Puerto Rico for fear of mainland states extending their hand as well.
\nIt seems like a dire economic situa\u00adtion. Or does it?
\nTom Vincent, vice-president of Prime Air Corp. \u2013 Puerto Rico, which is an agent and forwarder for island-based Stevens Global Logistics, said the situa\u00adtion is actually healthy, business-wise. The debt, due to mistakes by the terri\u00adtory\u2019s administration, is a government issue, he said, whereas the private sec\u00adtor is doing well.
\n\u201cWe\u2019re going through some interest\u00ading times,\u201d said Vincent, who is from the mainland, but has lived and worked in Puerto Rico for 50 years. \u201cIt\u2019s regret\u00adful that the negative news is out there.\u201d
\nJoselin Ramos, senior vice president at international freight forwarder and logistics provider CaribEx Worldwide, said the economy of Puerto Rico is growing \u2013 albeit slower than expected \u2013 thanks to the new taxes and all of the bad publicity about the government problems. \u201cThe private sector has many challenges but, as you know, we need to move fast and change to keep our business growing,\u201d Ramos said. \u201cThe private sector, like any other state in the nation, moves around demand for service\/goods.\u201d
\nSince Puerto Rico is an island, Vin\u00adcent said air and sea imports \u2013 includ\u00ading live animals, perishables, auto parts and electronics \u2013 account for 80 to 85 percent of Puerto Rican cargo value. But on the export side, the vast major\u00adity of cargo is bio-pharma and medical supplies. \u201cPuerto Rico is sort of the pharmaceutical capital of the world,\u201d he said. Pfizer, Amgen, Merck, Bristol- Myers Squibb, Eli Lilly and more all have large manufacturing facilities on the island.
\n\u201cThat\u2019s why all the airfreight com\u00adpanies are here,\u201d Vincent said, as well as the three big integrators, Strategic Air Services, ABX Air and Amerijet. The island also exports goods for the industrial sector, beverage ingredients and of, course, the famous Puerto Rican rum, which goes by sea. \u201cThe air indus\u00adtry remains healthy,\u201d he said.
\nRamos said that, in 2015, the air\u00adfreight industry suffered due to cuts by certain main carriers (which he did not name) between the United States and Puerto Rico. He said the island lost the majority of wide-body passenger planes carrying belly freight, and one major carrier consolidated its flights in Mem\u00adphis. Additionally, Puerto Rican ship\u00adpers have had to endure air rates in\u00adcreases not in line with taxes or volume. As a result, cargo demand is still down in some areas, due to the restrictions in passenger airplanes and the reduction in lift capacity. He added, however, that the low fuel cost has been a good thing for the industry.
\nVincent said there is an active Puer\u00adto Rican manufacturing association, working to have a single voice for the private sector, making recommenda\u00adtions both on the island and in Wash\u00adington, D.C., to foster open market ap\u00adproaches. Whatever happens with the debt, he said, there has to be an eco\u00adnomic angle.
\nPam Rollins, senior vice president of business development for Amerijet, said the airline has seven scheduled flights to San Juan Luis Munoz Marin Interna\u00adtional (SJU) weekly. \u201cSome weeks, we operate as many as 11 flights, based on the needs of the market,\u201d she said. This year, she said, Amerijet is on track to move about 16,300 tonnes of air cargo into SJU and around 9,500 tonnes out of SJU. Last year the carrier moved about 22,680 tonnes total, she added.
\nRamos acknowledged that the gov\u00adernment is awash in debt, but he said this has nothing to do with the private sector, with the exception of taxes, and the exodus of the islanders looking for work. Given the strength of the phar\u00admaceutical and medical supply business and the people who live, work and love the island, one has to believe this is a resilient population that won\u2019t easily give up on their island paradise.
\nSource: aircargoworld<\/p>\n","protected":false},"excerpt":{"rendered":"
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