Cost of transport in DR is 3x Central America
The Dominican Association of Free Zones (Adozona) is backing an initiative by the National Business Council (Conep) aimed at opening up the cargo transport business in the country. Adoexpo says that Dominican businesses pay 2.7 times more than their Central American counterparts due to the strong cargo transport cartel. The figure is quoted in an Inter-American Development Bank (IDB) report released in 2015.
The business group says this increases the cost of exports and the final price to consumers. Dozens of business organizations are mounting a legal challenge against the Fenatrado business group affiliates’ control of cargo.
As reported in 7Dias, the IDB report states that it costs US$4.75 per kilometer to transport a freight container in the DR compared to US$1.75 per kilometer regional average and US$1.42 in Mexico and US$1.85 in Panama.
According to Adozona the monopoly allows the transporters to set their fares without taking real costs or market factors into account.
Adozona says that non-government monopolies are prohibited by the Constitution. The constitution also establishes that the government should be responsible for encouraging free and fair competition and that it must take the necessary measures to prevent the harmful and restrictive effects of monopolies and abuse of dominant position, except in cases of national security.
This has not been the case in transport of passengers and cargo in the Dominican Republic where the governments have been lax and have given in to pressure from members of the transport and cargo cartels.
Source: DR1, 7dias
Oct 28, 2016
Category: DR News |