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Shipping firm sees potential gold mine in Florida-Cuba passenger ferry service
CubaNews / September 2009

By Larry Luxner

Imagine boarding a passenger ferry around 10 p.m. at the Port of Miami with your car, enjoying a dinner, a first-rate show and some duty-free shopping, then letting the ocean waves rock you to sleep in your luxury cabin — only to wake up the next morning at 7, refreshed and in Havana.

It’s an idea that could entice untold boatloads of U.S. tourists to visit Cuba, though few serious entrepreneurs have come up with a plan to make such a venture work — until now. Miami-based United Americas Shipping Ser-vices Inc. thinks a Florida-to-Havana passenger ferry is an idea whose time has come.

Daniel Berrebi is CEO of United Americas’ parent, Unishipping SAS, based in Paris. He predicts that within 12 months of Washington’s lifting of the travel ban against Cuba, one million Americans would visit the island by ferry.

“We are receiving daily phone calls from ports, trade agencies and people going online to see who operates this kind of service,” Berrebi told CubaNews. “There’s a dynamic going on, and apparently, everybody’s interested, including the Port of Miami.”

Berrebi spoke to us from Mexico, where one of his affiliated companies, Baja Ferries, operates a popular and profitable ferry service between La Paz and two cities on Mexico’s Pacific coast, Topolobampo and Mazatlán.

Baja Ferries utilizes three vessels. The 187-meter-long Chihuahua Star, built in 1989 in Japan, was acquired in 2008 and can carry 1,200 passengers, 60 cars and 1,800 linear meters of cargo. The 186-meter-long California Star, built in 2001 in Italy, was acquired two years later and can transport up to 900 passengers, 100 cars and 2,200 linear meters of cargo.

The third vessel, the Sonora Star, was built in 1978 in Croatia and acquired by Baja Ferries in 2006. Measuring 146.5 meters long, it carries up to 1,100 linear meters of cargo between Manzanillo and La Paz.

Until Baja Ferries began operating about 15 years ago, said Berrebi, Mexican truckers were carrying cargo 2,000 miles by road, all the way north from Mazatlán to the Arizona border, then turning around and traveling south, down the Baja peninsula to Los Cabos.

“Today, with the ferries, we do it in five or six hours,” he said. “I don’t think the development of Baja California and Los Cabos in particular would have been possible without this service. There would be no Los Cabos today.”

Berrebi said Baja Ferries generates annual revenues of around $100 million, and carries 250,000 passengers and 100,000 trailers (about 3 million tons of cargo) per year.

“We think the Cuba trade would be much bigger than this,” he said, estimating that initial investment in the ferry alone would cost his company $100 million. “I don’t want to carry people to Cuba in old junky vessels.”

The Tunisian-born Berrebi, whose grandfather began the family business in 1921, said his proposal is similar to the ferries that already ply the Mediterranean between France and North Africa, and that turnover could reach $300-400 million in the first year alone.

“We would need about three years to break even,” he told CubaNews.“On a vessel like the one we operate in Mexico, we could load up to 1,000 cars, or 200 trailers and 100 cars. Half of these passengers can have cabins. The round-trip ticket would be $200 per passenger, and if a couple travels together, the price would be around $500 round-trip for both of them.”

In addition to Mexico, Berrebi also operated a ferry service between the French-speaking Caribbean islands of Guadeloupe and Martinique. But political strife forced an end to that service earlier this year, he said.

UASS is no stranger to the Cuba trade. In 2003, the company obtained permission from the U.S. Department of Commerce to provide breakbulk and bulk cargo service into Cuba. Since then, it has transported grain from the Port of New Orleans to Havana.

But volumes have dropped around 20% this year with the reduction in Cuban government purchases of U.S. food commodities.

Berrebi says his proposal to sail to Havana from either the Port of Miami or Fort Lauderdale’s Port Everglades is purely hypothetical because U.S. law currently forbids average Americans from visiting Cuba.

“Even for Cuban-Americans who want to go to Cuba, we cannot operate this ferry service yet. Our lawyers in Washington are working on this, to understand why,” he said. “The problem is that, from the viewpoint of the United States, it’s a lot more difficult to control the operation of a vessel than a plane.”

That may be true, but Washington attorney Robert Muse, who specializes in Cuba issues, said “there’s never been any written rule or law” prohibiting U.S. companies from operating passenger ferries to Cuba.

“It’s just that to date, OFAC hasn’t licensed any passenger vessel service to Cuba,” Muse told us. “That doesn’t mean they couldn’t do it. At present, it’s not authorized, but it’s within their discretion” to allow such a service.

Ferry trips between Key West and Havana were commonplace before the U.S. embargo was imposed in 1962. Six years ago, Tampa-based Yucatan Express applied for OFAC permission to offer passenger ferry service between Tampa and the Cuban port of Matanzas. But nothing ever came of that proposal.

Carlos Buqueras is director of business development at Port Everglades. He says he’s intrigued by Berrebi’s idea.

“The law talks about passengers, but does not refer to air or ocean passengers. There could very well possibly be an unspecified capability to allow for transportation of passengers by ferry,” Buqueras told CubaNews. “We’d have to look at the U.S. laws and confirm that’s the case.”

But even if it is, getting Cuba to agree to the service is a different matter.

“One thing is getting the authorization, another is obtaining dockage rights in Havana,” which he said is much more difficult than securing landing rights at José Martí International Airport.

“We’d like to explore the idea further, but we don’t know if it’s feasible. A ferry terminal with cars requires specific conditions and infrastructure,” said Buqueras. “And imagine the USDA, Customs and immigration issues at the other end. They’d need to create another Customs entry point which would have to be staffed 24 hours a day.”

Berrebi agrees, conceding that Cuban bureaucracy could really foul things up.

“One of the ferries we operate in Mexico made a stop for 24 hours in Havana just to show the boat to Cuban authorities,” said the entrepreneur. “It was impossible to access the port, even for people like me, the owner of the vessel. The rules to enter a Cuban port are so complicated.”

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