Miami hopes for early advantage in the race to prepare for Panama Canal expansion
When the Panama Canal expansion is completed, PortMiami hopes to win back some of the cargo that’s destined for Florida but enters the United States via other states’ ports
11/18/2012 8:02 PM
10/22/2014 1:38 PM
That cheese grater, bookcase and those cute patterned pillows that you just picked up at IKEA surely must have made their way to the Sunrise store via a South Florida port.
Guess again. IKEA’s massive distribution center that serves its stores from North Carolina to Texas and on down the Florida peninsula is located just outside the port of Savannah. So are the 1.4 million-square-foot International Home Depot Distribution Center and the distribution hubs for a who’s who of big box stores.
Despite having 15 seaports, about 45 percent of the containerized cargo consumed in Florida arrives via ports in other states, according to a trade and logistics study commissioned by the Florida Chamber of Commerce Foundation.
When it comes to Asian imports consumed in Florida, just 38 percent entered via one of the state’s seaports. Sixty-two percent of those imports arrived in other ports: 36 percent came to Los Angeles/Long Beach and were trucked across the country or moved by rail, 13 percent came in through Savannah and 4 percent arrived in the Port of New York and New Jersey, according to the 2010 Florida Trade and Logistics Study.
All told, 11 million tons of imports used by Floridians entered the United States through other states’ ports.
And that’s a problem for PortMiami Director Bill Johnson. “We need to win back a large chunk of Asian trade for Florida,’’ he said. “For the last 10 to 15 years, Florida has been asleep.’’
Johnson, who is also chairman of the Florida Ports Council, the association for the state’s 15 deepwater seaports, said because of the competition posed by other East Coast ports, Florida ports can’t act like “little bickering children fighting over crumbs on the table.’’
The state’s ports, he said, need to present a united front to make Florida the preeminent state for international trade in the next five years.
While Florida ports compete among themselves for cargo, he said, now they have a common agenda when they go to Tallahassee and Washington.
“I’m not trying to undercut [the other Florida ports]; I’m trying to raise my bar,’’ Johnson said.
“There’s no reason Orlando shouldn’t be served by a Florida port. After the dredge, that cargo should shift back to Florida — primarily Miami,” said Kevin Lynskey, Miami’s assistant port director for business initiatives. The rest of the equation for PortMiami is to lock in South Florida cargo and pick up a small percentage of containers headed for Atlanta and other points north, he said.
“Florida faces a once-in-a-generation opportunity to fundamentally transform its economy. The shift in U.S. population growth to the south, the Panama Canal widening, the resurgence of Latin America and the Caribbean trade, and the continued revolution in logistics practices create the opportunity for Florida to become a global trade and logistics hub,’’ said the chamber study.
Among the study’s recommendations: Have at least one Florida seaport dredged to 50 feet with an on-dock or nearby rail connection by 2014.
That would be Miami, which should have its harbor deepening project completed while some ports are still studying the feasibility of dredging.
The port has already begun a project to strengthen its wharves and rebuild the seawall in anticipation of the “deep dredge.” Contracts for the dredge itself are expected to be awarded in February and the target date for completion is the summer of 2015. The main channel, which extends 2.5 miles out to the sea, will be dredged to a depth of 52 feet, and the port’s south channel, which faces Fisher Island, will be readied to a depth of 50 feet.
The dredging project will bring 30,000 direct and indirect jobs to Florida over the next five to seven years, Johnson said.
A truck tunnel — slated for completion in summer 2014 — and improved rail links from the port complete the picture. With that trio of projects in place, Johnson hopes that by 2020, Miami will be able to double the number of TEUs (a cargo measure equivalent to a 20-foot container) it handles to two million.
But even with the improvements, “the port of Miami has limitations in terms of size,’’ said Donald Francey, an executive with Maersk, the biggest shipping line at the port.
While Johnson said Miami is now on its way to becoming a much more significant port, it has been a hard-fought battle.
The tunnel project had been floated for decades. Hurdles that had to be overcome before the digging began included a threat by the state to rebid the project because of concerns over the finances of the drilling consortium; where the dirt from the dig would end up; a late letter of credit; and complaints from Miami Beach about potential traffic hang-ups.
As part of a lawsuit settlement with environmental groups over the impact of dredging on Biscayne Bay, the port has agreed to pay an additional $2.3 million for environmental projects. To allay fears that blasting could rupture a fragile sewer pipeline running under the shipping channel, the Miami-Dade Commission also voted to spend an extra $23 million to make repairs before the dredging begins.
But if Miami sticks to its timetable for completing its port projects, its early advantage could be a boon.
“Shipping lines like already established routes. Being ready sets the pace,’’ said Rodolfo R. Sabonge, a marketing executive for the Panama Canal Authority. “Timeliness is quite important — you are ahead of the game.’’
Although the projects have amped up the port’s debt load, Johnson said they are essential for the port to create jobs and generate revenue. When he took the helm in 2006, Johnson said the port was losing $1 million a month.
Not only is the densely populated South Florida market attractive to shippers, but Johnson said port enhancements and the improved Florida East Coast Railway links will help the port reach other markets in the Southeast within 10 hours to three days.
Just as the Panama Canal needed to make a huge investment so it would grow, “I think the Miami port will be a very important partner. Geography has a lot to do with it but so does population and economic activity — and Florida is very important for both,’’ Sabonge said.
Port Everglades officials dismiss the importance of Miami being first out of the box. “It’s nice to be first from a headline perspective, but long-term it’s not important,’’ said Michael Vanderbeek, director of business development at the Broward County port.
Savannah is the Southeast port that Miami wants to emulate. “All the things I’m doing in Miami are things that Savannah did 15 years ago. They were bold; they had vision,’’ Johnson said.
But Miami, the closest U.S. port to the canal, will have its advantages too, he said: “We’re not 30 miles up a congested, foggy river; we’re 2.5 miles to open ocean.’’
“Miami certainly is not our major competition,’’ said Curtis Foltz, of the Georgia Ports Authority. “Our main competition is the West Coast and Charleston.’’ Both Savannah and Charleston need deep water, he said. “It’s not secret that the Southeast is the fastest growing market in the United States.’’
Eventually, the U.S. deepwater ports will complement each other, Sabonge said. “Why would they want to compete? They each have their own territory, their own hinterland to serve.’’
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