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Apr.20, 2015

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TRADING PLACES 78 THE JOURNAL OF COMMERCE www.joc.com APRIL 20.2015 Peter Tirschwell FLORIDA AT BAT FOR FLORIDA GOV. Rick Scott, the recently concluded West Coast port labor dispute is an opportu - nity not to be missed. That's why the governor — whose state has invested $850 mil- lion in its seaports, including dredg- ing the Port of Miami to 50 feet — headed to California this month to promote Florida as an alternative gateway for containerized imports. His target audience is ship- pers disillusioned with West Coast ports after nearly a year of unnec- essary disruption tied to longshore labor negotiations. Many are ready to minimize their exposure to the West Coast in coming years — if not to withdraw entirely — because of the complete absence of concern for the customer as negotiations between the International Long - shore and Warehouse Union and the Pacific Maritime Association spiraled out of control last fall. There's no doubt that long-term diversions are on their way — indeed, they're already happening — to Can- ada and the East and Gulf coasts. And with the expanded Panama Canal opening in a year, an expan- sion that will allow ships of up to 14,000 TEUs of capacity to pass through the canal's locks, what better time could there be to pitch Florida as an alternative gateway for U.S. containerized imports, not just destined for Florida but also to points beyond? "These delays have presented challenges to many shippers whose businesses rely on the ability to efficiently move goods across the nation, and many have indicated that they plan to divert cargo from the West Coast," Scott wrote in a March 12 letter to shipping indus- try professionals. "Florida ports are undoubtedly a solution to this problem. Florida has the infrastruc- ture to move your goods across the nation once they reach our ports." Yes, some shippers can be found in California, but they're also in places such as Bentonville, Arkansas; Columbus, Ohio; Charlotte, North Carolina; Minneapolis and Atlanta, as well as many other U.S., Euro- pean and Asian cities. Judging from the numbers, Florida has a long way to go to get on their radar screens. If the goal is to establish Miami as a gateway for containerized imports moving beyond the state and into the broader Southeast, or beyond, the numbers suggest a long road ahead. According to PIERS, a sister brand of The Journal of Commerce within IHS Maritime and Trade, Florida's share of total U.S. container imports has barely budged over the past six years: It was 4.61 percent in 2009 and 4.83 percent in 2014. Miami's share actually dropped, from 1.88 to 1.72 percent over the five-year period. And Florida ports are lagging the U.S. in growth: Since 2009, Florida ports' volume grew at a compound annual growth rate of 3.7 percent, while all U.S. ports had a CAGR of 4 percent during the same period. Just within the intensely compet- itive Southeast, where ports such as Miami are competing against estab- lished and fast-growing competitors such as Savannah, Miami handled 6.5 percent of imports arriving from Asia in the Southeast versus 47 percent at Savannah, 25 percent at Norfolk and 14 percent at Charleston. Finally, Miami didn't benefit from diversions that occurred last year. Its import volumes actually declined 2 percent in 2014 versus 2013, while Savannah's imports as a diversion port of choice grew 17 percent, Charleston's were up 12 percent, and Jacksonville's rose 9 percent, according to PIERS data. Port leaders in South Florida, however, are convinced their future is bright. With on-dock rail, a new tunnel leading to the interstate highway system, its 50 feet of depth and multiple rail departures per day from the Florida East Coast Rail- road, Miami feels it's ready to make its presence felt. "We believe we will double our throughput over the next eight to 10 years," Miami Port Director Juan Kuryla told the JOC's Reynolds Hutchins this month. Miami's relatively small numbers are leaving Scott open to attack from California port advocates struggling to restore the reputation of their ports. "Florida doesn't have any- where near the demand, proximity to markets or infrastructure needed to support major port operations even remotely close to California's port complexes," John McLaurin, presi- dent of the Pacific Merchant Shipping Association, wrote in the Los Angeles Business Journal this month. The debate with California may be a public one, but in private, you have to assume other Southeast ports also are pouring cold water on Miami's aspirations. Florida can't be looked at as a single port competitor because Jacksonville is a bona-fide Southeast port that's seeing some growth from West Coast diver- sions. But for Jacksonville and other Florida ports, the real challenge is convincing shippers they are the most effective gateways for cargo headed to the rapidly expanding Southeast, and even to the Midwest. An on-dock rail facility at Jack- sonville's TraPac terminal, set to open this year, is a step toward that goal. However, competitors Charleston, Savannah and Virginia developed on-dock rail facilities for their Asia- focused terminals long ago. JOC Contact Peter Tirschwell at ptirschwell@joc.com and follow him on Twitter: @petertirschwell. "We believe we will double our throughput over the next eight to 10 years."

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