Maersk consolidating South Florida operations to Miami

Maersk consolidating South Florida operations to Miami Maersk Line and its corporate affiliate APM Terminals will consolidate all South Florida operations into its Port of Miami terminal by early February, ending a longstanding relationship with Port Everglades.
   'We operate both Port Everglades and Miami container terminals, which are located within one hour vessel steaming time of one another,' a statement from APM Terminals said. 'The close proximity of these two ports and a review of customer needs and future growth requirements resulted in our decision to close down Port Everglades and focus operations in Miami to better serve our customers needs through one port and offer improved service levels. Our customers are supportive of this initiative and understand the business.'
   Port Everglades director Phillip C. Allen told Shipper's NewsWire the port had been notified in writing on Monday that Universal Maritime Services Corp., the subsidiary of APM Terminals that is the operator of the 44-acre terminal at the port, was exercising its termination option on the terminal lease.
   Universal handled 103,252 TEUs of containerized cargo at Port Everglades during fiscal year 2007, or roughly 10 percent of the port's volumes, according to port records. Maersk Line accounted for just over 20,000 TEUs of that business.
   Allen said APM officials explained they wanted to consolidate operations in South Florida as part of a worldwide cost reductions program by parent company A.P. Moller. APM Terminals has been operating terminals at both Port Everglades and the Port of Miami, where it has a 70-acre terminal. Allen added APM officials felt that the consolidated operations would be better at the larger Miami facility.
   APM Port Everglades Terminal Manager Carl Pitts said the change was initiated when Maersk Line decided in 2007 to consolidate its calls at the Port of Miami. That change officially started Jan. 1, with the last Maersk call at Port Everglades made Dec. 28.
   The terminal is also used by Evergreen, Zim Integrated Shipping Services and Emirates Shipping Line. But Evergreen and Zim decided in December to end its Asia USA Express (AUX) service from Asia to the U.S. East Coast during the first quarter of 2008. Pitts said that service is scheduled to make its last call at Port Everglades Feb. 12. Evergreen and Zim each have four vessels in that service, with Emirates chartering space on the vessels.
   With the services ending, APM Terminals decided to lay off most of its employees at Port Everglades and formally initiate the termination clause in the lease agreement with the port. That provides for a three-year buyout, in effect, with APM continuing to meet its minimum volume payment requirements.
   There are still six years remaining on the APM lease at Port Everglades. The termination clause in the agreement calls for APM to continue paying its guaranteed minimum volume payments for three years, which Allen estimated would come to $2 million to $2.5 million a year.
   Pitts said APM could theoretically bring in new services to call at the terminal, but nothing is in place at this time, prompting the layoffs and the implementation of the termination agreement.
   The move represents the end of an era at the port, dating back to the days when Sea-Land Service help pioneer containerization at Port Everglades in the 1970s. Maersk and Sea-Land were involved in extensive vessel-sharing operations throughout the 1990s, and Maersk parent company A.P. Moller acquired Sea-Land in 1999.
   While the move will have historical significance, Allen said it would have little financial impact on Port Everglades.
   'In terms of revenue, this will not have a significant impact,' Allen said. 'In fact, we look at this as an opportunity. Under our new master plan we see a need for more terminal space because of increased demand, and this will actually help us top provide space for other carriers, at the same time giving us three years to find new terminal operators or carriers while still collecting our minimum revenues.'
   He said Maersk was basically staying close to the projections in the minimum volume agreement.
   Allen said some of the existing tenants at the port have been seeking to expand their operations if space becomes available. He also said, 'We have been in contact with several users who are not at the port now that are interested in using our port.'
   Asked about the impact on port employment and longshore workers, Allen noted that longshoremen do not work for a specific terminal operator.
   'They go to the union hall and work where they are sent. They might be at APM one day, then F.I.T. (Florida International Terminals) the next and P.E.T. (Port Everglades Terminal) the next.'
   About one dozen APM Terminals direct employees will be leaving the port; some could be transferred to other APM Terminals facilities.
   The APM move is part of the ongoing shift of business between Port Everglades and the Port of Miami over the years. Over the last two years a handful of carriers have moved from Miami to Port Everglades, so the move will return some of the volume back to Miami.
   Port of Miami recently extended its lease agreement with APM Terminals. ' Jim Dow