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New rules put dent into IBC's Miami-Havana cargo volume
CubaNews / November 2004

By Larry Luxner

Recent U.S. sanctions against the Castro regime have slashed by more than half the amount of cargo being flown from Miami to Havana.

IBC Airways, the only U.S. carrier that regularly transports cargo to Cuba, said it’s now hauling an average 6,000 to 7,000 lbs a week from Miami to Havana’s José Martí International Airport, a one-hour flight.

That compares to 15,000 lbs a week before June 30, 2004, when the Bush administration approved new measures that severely restrict how much and how frequently Cuban-Americans can send humanitarian “gift packs” to their families on the island.

“Cuba is important to us, but it represents the smallest amount of cargo we move in our entire system, for obvious reasons,” said an IBC official who asked not to be named. “Due to the embargo, it’s very restrictive. Most of the cargo we take down there are gift packs.”

IBC Airways, which has 65 Miami-based employees, is a subsidiary of International Bonded Couriers Inc. It operates a fleet of 12 Metro and Shortt aircraft, with daily flights between Miami and Kingston, Freeport, Nassau, Grand Cayman and Providenciales.

The airline has been flying to Havana on a charter basis for the last nine years, usually three or four times a week.

Given Cuba’s population of 11.2 million and proximity to South Florida, the island should be Miami’s largest export market — just as it was prior to the 1959 revolution that brought Castro to power.

Yet over the past 40 years, the embargo has reduced U.S.-Cuba trade to practically zero. Things began changing in 2000, when Congress passed the Trade Sanctions Reform and Export Enhancement Act (TSRA), which lets U.S. companies sell food and agricultural commodities to Cuba on a cash-only basis.

While nearly all TSRA commodities are sent to Cuba by ship, companies still need to get food samples to Alimport as quickly as possible, and for that, they often rely on IBC. Among the carrier’s regular customers are Conagra, Florida Produce, Riceland Foods, Crowley, Sysco and Purity Products. Food shipments cost $3.50 to $3.70/kg on average, and there’s a $75 minimum charge per shipment. All shipments must have a special U.S. Commerce Department license before anything can be flown to Havana.

IBC recently arranged a charter flight just for Sysco, and a year ago brought to Havana a whole load of ice cream and live shrimp for an Alimport trade show.

Even so, food constitutes only 10-15% of IBC’s total cargo to Havana. The bulk of its Cuba business is gift packs and diplomatic pouches; IBC has also flown magazines to Cuba, as well as diplomatic correspondence for various embassies in Havana, including the U.S. Interests Section.

It also flies a small amount of cargo northbound, including human remains, music CDs, art and occasionally household pets.

Gulfstream has also done very limited cargo flights in the past, but because of FAA rules, the top two U.S. passenger charter companies to Cuba — Marazul Inc. and ABC Charters — are not allowed to carry cargo on their commercial flights to Havana.

Besides Havana, IBC does charters to Holguín, the U.S. Naval Base at Guantánamo Bay and elsewhere. Yet the airline isn’t too optimistic about this huge potential market, at least in the short term.

“I’d say business with Cuba will decrease, between the Bush sanctions and the Castro government’s new restrictions on the use of U.S. dollars,” the IBC official told CubaNews. “Exactly this will affect us, I have no idea.”

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