LOGISTICS IN CUBA

LOGISTICS IN CUBA

One of Cuba's top industries, and perhaps the nation's only growth industry, is hosting tours of American visitors. Though U.S. visitors still need special authorization to get in, permits have become easier to obtain, and Americans are going in droves. U.S. businesspeople are particularly curious about Cuba, an economic blank spot in the middle of the Caribbean, just 90 miles from the U.S., 130 miles from Mexico, 95 miles from Jamaica and 125 miles from Haiti.

Everyone keeps saying that Fidel Castro can't last forever, and that despite the domestic political opposition, eventually the United States will resume direct trade with Cuba. How will that play out? Because there are so many political and economic wild cards, no one is sure.Twenty logistics professionals visited Cuba this year with the objective of learning something about the state of logistics there. The delegation was sponsored by People To People, a cultural exchange program created by the Eisenhower administration and sponsored by the State Department. Though People To People isn't oriented toward logistics, it sent logistics delegates to China in 1983 and to the Soviet Union in 1989.

Several members of the delegation to Cuba discussed their impressions at last week's Council of Logistics Management conference in Kansas City, Mo. The delegation included Arthur Van Bodegraven, a partner in The Progress Group, an Alpharetta, Ga., consulting firm; Kenneth B. Ackerman, president of K.B. Ackerman Co. of Columbus, Ohio; as well as George Gecowets, who recently retired as executive vice president of the Council of Logistics Management; his successor, Maria McIntire; and former CLM Presidents Bob Bowles and Jerry Krassenstein.

Members of the group acknowledged that a short visit isn't enough to provide a definitive look. Even so, first impressions sometimes are valuable, especially from people who know something about a subject such as logistics.

To nobody's surprise, the group encountered a moribund economy suffering from the U.S. economic embargo, the inefficiencies of a communist system, and the loss of the country's main export markets with the collapse of the Soviet Union. The dollar is the currency of choice, with one set of shops and restaurants for dollar-spending visitors, and another for locals with Cuban pesos and ration cards.

Cuba's logistics infrastructure is an odd mix. The island, roughly 780 miles long and 55 miles wide, has a fairly good railroad and highway network. Except for tracks serving the sugar-cane industry, rail tracks are standard U.S. gauge. There are 13 ports of consequence, about half of which have potential for development into deep-water facilities. There are airports near all principal cities, served mostly by decrepit Soviet-built planes. Although Cuba claims to have 60,000 trucks on its roads; most are small vehicles capable of handling five tons or less. The visitors saw little evidence of modern warehousing systems.

Ackerman said he and other visitors saw almost no traffic on the railroads or highways. He said a divided four-lane highway that extends half the length of the island is virtually unused, and that the group didn't see a single train in operation during the week they were there.

While Cuba's logistics infrastructure leaves plenty to be desired, the U.S. delegates said they were impressed with the logistics knowledge of the practitioners and academics they met. 'They seem to have translated into Spanish an awful lot of things that are familiar to anyone who has been to a CLM conference,' Ackerman said. 'They know the logistics business. They use words like 'productivity improvement' -- strange words for a socialist economy.'

The academics are plugged into the Internet -- that is, when they have electricity to operate their computers. Cuba's electrical system is mostly a pre-revolution antique, and there are frequent blackouts. PowerPoint presentations for the American visitors suddenly went dark when the electricity sputtered out.

'They really get it,' Van Bodegraven said. 'They're articulate. They speak our (logistics) language. They all couldn't have been good enough actors for all of it to have been a show. When the day comes, they'll have a lot of individuals who'll be able to take on the challenges.'

Note that Van Bodegraven said, 'When the day comes,' not, 'If the day comes.' Some U.S. groups visiting Cuba are starry-eyed apologists for the communist system. This group had no such illusions. Despite successes in health care, literacy and sports, members of the logistics delegation were unanimous in declaring the revolution a failure.

Several of them said, though, that the U.S. economic embargo against Cuba also is a failure. Castro is as entrenched as ever, and U.S. companies are losing business to competitors from Canada, Mexico and Europe. Who's benefitting from the embargo? 'Maybe it's Fidel,' Van Bodegraven said.

Joseph Bonney is deputy editor of JoC Week. He can be reached at (973) 848-7139, or via e-mail at jbonney

oc.com.