June 12, 2018
By: Gregory Mottola - Cigar Aficionado
nti-government protesters in Nicaragua have put up several roadblocks along the country’s Pan-American Highway—a major shipping route—stopping an estimated 6,000 transport trucks and cargo vehicles headed to ports in Nicaragua and Honduras. As a result, cigar shipments have been delayed.
“Container movements have been shut down,” said Jorge Padrón, of Padrón Cigars Inc. “They can’t move merchandise because there are roadblocks everywhere. There are barricades all over Nicaragua on the roads. It’s a huge problem to move things in and out.”
Drew Newman, general counsel for Tampa-based J.C. Newman Cigar Co., explains how shipping logistics normally work in Nicaragua.
“Cigars leaving Estelí generally travel north on the Pan-American Highway, cross the border into Honduras and leave via a port in Honduras,” Newman said. “Smaller shipments are sometimes driven to Managua where they depart via air. But air freight is equally difficult as well because the blockades around the Managua airport are preventing not only goods from getting to the airport, but also the workers who are needed to load the cargo.”
J.C. Newman Cigar Co. produces cigars at its PENSA factory in Estelí, Nicaragua. On average, it sends out a shipping container of premium cigars to the U.S. every week.
“Roadblocks have been delaying shipments,” Juan Martínez, president of Joya de Nicaragua, told Cigar Aficionado. "Some transport companies have not been able to bring trucks to Estelí. So, yes, some companies have suffered delays. In our case and many others, everything is being shipped by air and it’s happening also with delays. A truck can take up to two days to get to the airport [Augusto C. Sandino International Airport] and back. To be precise—shipments are happening with delays, but happening."
Cigarmaker and tobacco grower A.J. Fernandez is also experiencing difficulties, not just with outgoing shipments, but with employees getting to work as well as third-party collaborators from other companies.
“Many of our collaborators travel from places outside of Estelí,” Fernandez said. “At some point, due to the traffic jams and blockades by the protesters, they have not been able to reach our factory. It affects production and our ability to work together. Shipments have been delayed ranging from days to a few weeks, but we have not stopped sending to the U.S.”
Protests around the country erupted in April when President Daniel Ortega announced a tax increase and an overhaul to Nicaragua’s social security system. Most of the protesting took place in the capital city of Managua, but some of the violence spread to the cigar-making city of Estelí.
For a while, the violence seemed to have died down and the premium cigar industry was not initially affected. Now, many reports have the death toll as high as 100 people, and the road barricades have disrupted the cigar industry’s ability to move product from factory to port.
“The situation is very fluid and difficult right now,” added Newman. “Making matters worse, yesterday the president of the Trucking Association of Nicaragua (ATN), said that the large trucks that carry containers will not be operating in Nicaragua due to the lack of security for drivers and the fact that many drivers have been stuck on the Pan-American Highway for days.”
For the past two years, Nicaragua has been the largest supplier of premium cigars to the United States. Exports from Nicaragua grew steadily over the last decade. In 2017, Nicaragua exported 148 million premium cigars to the U.S.—more than any other country.
Fernandez, whose company has helped to feed the U.S. appetite for Nicaraguan cigars, hopes for resolution soon: “We hope that all this will be solved in the shortest time possible, and normality will return to the country.”
Additional reporting by David Clough