Therefore, to become the region's hub, the Dominican Republic must lower its transactional costs, reduce merchandise clearance times, and eliminate the complexity of border trade. The aforementioned amounts currently range between 18% and 35% of the value of the product and even more with small and medium enterprises, where it can be around 45%, high prices compared to 8% of the value of the product in OECD countries.

William Malamud, executive vice-president of the American Chamber of Commerce of the Dominican Republic, confirmed that nearshoring is the key strategy that the country will follow to become a logistics hub in the Caribbean with the aim of more shipping lines passing through its ports.Īnother strategy to achieve this goal is to lower transportation and logistics prices, a challenge that concerns not only the Dominican Republic but the entire Latin American and Caribbean region so that the countries of the region will be more attractive to foreign investment. Therefore, mainly Asian and European companies are considering Latin America and the Caribbean to diversify their production process and be closer to the markets of this hemisphere. This strategy became popular in large factories after the Covid-19 pandemic, as they learned that the entire supply chain should not be concentrated in one place, since any inconvenience could slow down all their production processes. To achieve this, the half-island will resort to the nearshoring mechanism, a process used by many companies to transfer business processes to distant destinations in order to reduce costs.

The Dominican Republic wants to take advantage of its geographical location to become the best option for large companies seeking new settlements for their production processes.

Production hub