To see how Cuba’s new import duties are affecting freight, look no farther than International Port Corp., the Miami River company that began hauling gift parcels to Havana this summer.

For weeks, Cuban-Americans arrived at its office in droves, dropping off packages for loved ones on the island. They were rushing to beat the Sep. 3 deadline when Cuba was to increase duties on such parcels.

Rumors swirled that Havana might stop the unpopular tax hike, but business remained feverish. Many Cuban exiles didn’t want to risk the chance of paying far higher duties in September, so they hustled to send all they could before the cutoff date: food, clothes, appliances and even supplies for budding businesses, from spices for restaurants to nail polish for salons.

When International Port Corp. sent off its last ship late August before the tax hike, it hauled four containers — each one stuffed with up to 33,000 pounds of gifts, said IPC spokesman Leonardo Sánchez. That’s up from a single container carried when the company began its weekly sailings in July.

“We took a break after that. We closed for a week,” Sánchez told us. “Our guys were just knackered.”

Now, there’s a steady trickle of drop-offs at company offices — not enough to send its ship to Cuba the first week in September, Sánchez concedes. But with prices for sea cargo cheaper than for air freight, the company could haul one container a week through fall, before the peak Christmas season, he said.

It’s a similar story at freight companies across the United States and even in Spain, Panama and other nations where Cubans abroad send goods back to their cash-strapped homeland: A surge in gift parcel shipments in August is giving way to a slump in September and uncertainty over future business.

In general, cargo executives forecast smaller volumes this fall. Because new import duties apply on packages generally greater than seven pounds, families likely will send smaller parcels to Cuba. They might send two boxes of 10 lbs each, instead of one weighing 20 lbs.

Plus, more families will shift from air to sea freight to cut transport costs. Sea freight can whack at least 50% off a transport bill: Air freight to Cuba and home delivery on the island often costs $10/lb, vs. $4.50-$5.00/lb for sea freight and home delivery, said Andrés Eduardo Martínez Gómez, vice-president of TodoParaCuba.com, which sends goods to Cuba from around the world.

“We’re increasing maritime services now,” said Martínez, who estimates his company has been sending nearly 8,000 packages a month to the island this summer, many by air.
“Of course, not everything will shift to ships. It can take 60 to 70 days for goods sent by sea to be delivered to homes in Cuba. Shipments of food and medicine more likely will use air cargo to get there faster.”

The difference in delivery times does not result mainly from longer transit at sea, however. It’s largely linked to longer waiting times to fill up enough containers, so that ships can operate profitably. Airplanes need smaller volumes to turn profits on their higher-paying cargo,  Martínez told CubaNews.

Sparking the upheaval is a rule that took effect Sep. 3. It requires residents in Cuba to pay customs duties on imported goods in the dollar-like currency known as CUC, instead of the island’s peso currency.

That means the cost of duties will be more than 20 times higher and too expensive for many islanders to afford.

Import duties would jump to about $4.50/lb for most shipments greater than about seven pounds. Laptop computers would pay about 170 CUC and a 32-inch flat screen TV about 200 CUC, shippers say. Cubans earn an average $20 a month, mostly paid in the peso currency and not in CUC.

Many Cubans in Miami say they’ve already scrimped to send goods to the island. Now, they can’t easily afford to buy goods, send them and pay the higher duties. Some figure that Cuba’s government wants them to send cash instead, so their relatives will buy more in state-owned stores on the island.

But with selection limited and prices high in Cuban stores, many worry that money alone won’t suffice to help residents. That’s why many freight executives expect shipments to slowly rise from their September slump.

“The needs in Cuba are great,” said TodoParaCuba.com’s Martínez. “People outside Cuba are going to find ways to keep sending things to loved ones on the island.”