Welcome to the Jungle: Amazon Comes to Town
The e-commerce giant Amazon just began the construction of its first delivery hub in the Caribbean, on a 37.9-acre site in Dorado city, about 20 miles west of San Juan.
Buenos días. Fears are like opinions, everybody has one. This Summer LUMA unlocked a new fear: possible overloading of distribution lines due to the proliferation of solar panels.
Puerto Rico has doubled rooftop solar energy in less than two years. With an electrical distribution circuit so fragile, LUMA says the injection of additional power could destabilize the grid. Who knew transitioning to renewable energy would be so unfavorable? Let's tap into other people's fears.
DISASTER FUNDS CLAWBACK?
Financial Oversight and Management Board Admits Fear of Trump Presidency
Robert Mujica, the executive director of the Financial Oversight and Management Board (FOMB), expressed the board's concern that Republican presidential candidate Donald Trump might take back federal funds that Puerto Rico has received, but not yet used to address its natural disasters if elected.
"It is something that we all have to be concerned about because if not, you are going to be very surprised.", said Mojica on influencer's Jay Fonseca's YouTube channel.
Mujica continued by emphasizing the significance of allocating and using the funds now. In the most recent interview, he stated that "If the money has been allocated, you don’t have to worry about the president, Congress can act. But, if they are not, it is something that is of our concern.”
Mujica emphasized the need to utilize federal funds more quickly. Mujica stated that although the COVID-19 pandemic, Hurricane Maria in 2017, and earthquakes in January 2020 slowed down the reconstruction and the distribution of federal funds, it is now time to step up efforts. He stated, in response to a query, that "I have conversations [about] the possibility of a clawback of federal funds.". As he stated, "It is a real concern when I have gone to Washington and expressed that."
From 2017 to 2021, President Trump's administration limited Puerto Rico's ability to use federal Community Development Block Grant disaster funds. The Central Office for Recovery, Reconstruction, and Resiliency reveals that only $9.8 billion of the estimated $40.11 billion allotted to Puerto Rico for its disasters has been disbursed, out of an estimated $36.8 billion in obligations.
Mujica was recently appointed executive director of the FOMB with an annual salary of $625,000. He previously served as the state budget director since 2016, initially working for the former governor Andrew Cuomo at $216,186 annually.
NEW DELIVERY HUB
Puerto Rico to Experience The "Amazon Effect"
The e-commerce giant Amazon just began the construction of its first delivery hub in the Caribbean, on a 37.9-acre site in Dorado city, about 20 miles west of San Juan.
According to News is my Business, the massive project will cost between $40 million and $50 million to complete. The AMZL Puerto Rico corporation purchased the property on May 6 for $18.58 million.
Amazon's distribution and logistics center (AMZL) hopes to create more than 100 full and part-time jobs, as well as more than 200 new driver opportunities through its Delivery Service Partners (DSP). This means that in Puerto Rico, many Amazon orders will no longer be delivered by the U.S. Postal Service letter carriers or UPS drivers, but by drivers hired by those delivery partners in the DSP program.
Vice President of Public Policy at Amazon, Ashleigh de la Torre, said "Puerto Rico is an ideal place to do business and our new delivery center will give us the opportunity to serve our customers more efficiently and fast."
The online retailer revealed that the minimum hourly wage will be $20.50. By mid-2025, construction should be finished.
This new delivery center will tackle “the last mile” of the Amazon purchasing process. This means that at first, it will be the primary location where Amazon packages that arrive via plane are kept until they are delivered to customers.
Though Secretary of the Department of Economic Development and Commerce (DDEC), Manuel Cidre, stated on Thursday that Amazon might open additional “smaller” warehouses in other parts of Puerto Rico, it is unclear if the Dorado facility will eventually include a sorting and order fulfillment component.
"Amazon's entry into Puerto Rico validates what has happened in the past three years, the confidence of the sectors and the importance of the Puerto Rican market for this company,” said Cidre.
LOW SALES
June Marks the Lowest Point for Puerto Rico's Manufacturing Index.
June saw the lowest score recorded in 2024 for the Puerto Rico Purchasing Managers' Index for the Manufacturing Sector (PRM-PMI), which dropped to 47.3. 8 points have been lost from the record score of 55 points9 points that was achieved in May of 2024.
Delivery to suppliers was the only sub-index that rose to 56.7 from the previous month, according to the report produced in partnership with the Puerto Rico Manufacturers Association (PRMA) and the Institute of Statistics.
After staying at or above the threshold for six straight months, new orders fell to 46.7. Similarly, after topping the threshold for four straight months, the manufacturing PMI fell to 36.77 in June.
While inventories owned dropped to 46.7 from the previous month's threshold, employment fell to 50.0, staying at or above the threshold for three consecutive months.
A supplementary survey of manufacturing establishments revealed that last month's top issues faced by businesses were shortages of raw materials (8%), costs (8%), supply chain logistics (15%), and sales (23%). Similarly, employment represented another challenge in the human resources domain, accounting for 23%, and turnover, for 8%.
Conversely, expensive energy expenses and subpar material quality were also emphasized, accounting for 15% and 8% of the total. In the 169 months since the survey was conducted, the PRM-PMI has been at or above the threshold, which is noteworthy.
BEFORE YOU HIT THE BEACH
Oversight Board
Mayors want to be exempt from the "pay as you go": About 20 municipalities on the island face imminent insolvency beginning in January.
Public Transportation
Puerto Rico Metropolitan Bus Authority (AMA) operations paralyzed: The tanks supplying the buses' diesel fuel contained water.
LAST BUT NOT LEAST
A $30 million grant is given to PSI to expand its economic mobility programs in San Juan.
Caguas will host the Caribe Franchises Expo in August. 23–24.
ASK US ANYTHING - Our goal is to provide useful information and create useful connections to the island, do you have any specific questions? Shoot us a comment or email and we’ll get back to you in a future newsletter.