Nearshoring and Logistics Upgrades Position the Caribbean as a New Regional Hub

Why It Matters

These developments lower trade barriers, attract foreign direct investment, and give the Caribbean a competitive edge in diversified, resilient supply chains.

Key Takeaways

• Logistics costs 16‑25% of Caribbean GDP, above OECD average
• Dominican Republic leads with 20 of 28 greenfield FDI projects
• $760 mn DP World port expansion boosts Caucedo competitiveness
• Jamaica, Guyana, Belize invest $80‑250 mn in port upgrades
• Arajet and FL Technics drive air hub jobs growth

Pulse Analysis

The Caribbean’s geographic midpoint between North and South America makes it a natural conduit for reshaped global trade, especially after the United States imposed reciprocal tariffs in 2025. Companies seeking to shorten supply‑chain distances are eyeing nearshoring opportunities, yet the region’s logistics costs—up to 25 percent of GDP—have historically eroded competitiveness. By addressing regulatory bottlenecks and modernizing infrastructure, Caribbean nations aim to align with the broader shift toward regionalized, risk‑aware sourcing strategies.

Significant capital is flowing into port and maritime upgrades. The Dominican Republic’s $760 million partnership with DP World to expand the Port of Caucedo, alongside Jamaica’s $80 million Kingston Freeport Terminal expansion and Guyana’s deep‑water Berbice project, are poised to cut freight rates that were previously four times higher than routes to Argentina or China. These investments also incorporate digitalisation and automation, promising faster turnaround times and greater cargo capacity, which in turn attract high‑value manufacturers in life sciences, electronics and apparel.

Beyond seaports, air connectivity is accelerating. Budget carrier Arajet has turned Santo Domingo into a regional hub, while FL Technics is establishing the Dominican Republic’s first independent MRO centre, projected to create over 2,000 jobs. Together with the expansion of special economic zones, these initiatives diversify the Caribbean’s economic base, enhance export potential—evidenced by a record $1.9 billion in medical‑device shipments in 2025—and position the region as a resilient node in the evolving global supply‑chain network.