Advocates Urge 'Borderless' Caribbean Supply Chains
Advisory firm Dawgen Global is advocating for a "borderless" supply chain model in the Caribbean to navigate market volatility from hurricanes and currency fluctuations. The approach involves blending global management tools with local operational context. This strategy is presented as a way for regional businesses to address advisory gaps and build more resilient logistics networks.
- Intra-regional trade among Latin American and Caribbean countries accounts for only about 20% of their total trade, a figure that lags behind most other global regions and has remained stagnant for nearly two decades. High port charges, which governments often treat as a revenue source, and varying customs regulations across islands contribute to this challenge. - Shipping costs in the Caribbean are significantly higher than in other parts of the world, with logistics expenses accounting for 16% to 26% of GDP, compared to about 9% in OECD countries. Some estimates place Caribbean shipping rates at three times the cost of moving a container across the Pacific. - The Atlantic hurricane season, running from June to November, poses a constant threat of major delays to air and ocean freight through sudden port closures and vessel rerouting. A 2023 study on Eastern Caribbean states found that a hurricane strike can reduce a country's exports by 20% for up to three months. - The region's supply chains are highly dependent on imports, with over 80% of consumer goods being sourced from outside the Caribbean. Some nations, like the Bahamas and the OECS islands, have an import dependency of over 90%. - Existing trade agreements like the CARIFORUM-EU Economic Partnership Agreement and the Caribbean Basin Initiative provide duty-free or preferential access to major markets in Europe, the U.S., and Canada, yet logistical inefficiencies prevent businesses from fully capitalizing on them. - Many companies in the Caribbean face persistent shortages of foreign exchange, particularly US dollars, forcing them to navigate parallel markets with different exchange rates and creating accounting complexities. This currency volatility impacts the cost of imported goods and overall trade predictability. - Technology adoption is a key part of the "borderless" strategy, with an emphasis on centralized, cloud-based inventory management systems to provide real-time visibility across multiple properties. These systems help reduce overstocking, automate ordering, and simplify the transfer of goods between locations. - Dawgen Global's executive chairman, Dr. Dawkins Brown, has emphasized that regional cooperation through CARICOM is critical for strengthening supply chains. Proposed strategies include developing shared logistics hubs, harmonizing customs standards, and creating partnerships with local suppliers to reduce reliance on distant markets.
