For the second year in a row officials from PortMiami and Port Everglades participated in the TPM Asia Conference in Asia, Oct. 13-15, as business partners rather than competitors.
The two ports are 30 miles apart and vie for ocean cargo from Central and South America, the Caribbean, Asia and Europe. Everglades surpassed Miami two years ago as the top container port in Florida, with upwards of 1 million TEUs handled on a fiscal year basis. Combined the ports moved an estimated total of 2 million TEUs in the 12-month period ended Sept. 30. But the U.S. Army Corps of Engineers last month completed a dredging project that gives Miami a 50-foot harbor and the ability to handle neo post-Panamax vessels, while Everglades is still in the pre-construction and engineering phase of deepening its harbor in Fort Lauderdale to 48 feet. The infrastructure enhancements are a reaction to the expansion of the Panama Canal that will make way for bigger ships next year.
The two ports, along with the Florida East Coast Railway, will share a booth and sponsor receptions at the conference, as well as meet with high-level liner executives and users of ocean services in China.
The joint-marketing effort is designed to overcome the lack of awareness about South Florida as an alternative gateway for Asian goods. Today, more than 55 percent of Asian goods consumed in Florida come through ports outside the state, including ones as far away as Los Angeles. Port Everglades is the 11th largest container port in the United States and Miami ranks 13th, when volumes for the allied ports of Seattle and Tacoma are counted separately.
Natural competition will always exist between Miami and Everglades, “But if we can grow the pie larger we’ll both succeed,” Port Everglades Chief Executive Steven Cernak said on the floor of the Intermodal Association of North America’s expo in Fort Lauderdale last week.
“At the end of the day, we’re increasing the value of the region. What we’ve ascertained is there’s plenty for both ports to share if we collectively work to grow the business. Neither port can assume the other port’s operations. There’s only so much land to go around. We are at a point that we have to work together,” he said.
Collaboration between ports has become a recent trend. The ports of Seattle and Tacoma have gone the furthest, forming an alliance late last year to coordinate operations in addition to promoting the Puget Sound region as a unified cargo hub. The ports of Los Angeles and Long Beach have expanded their joint discussion agreement under U.S. Federal Maritime Commission oversight to cover supply chain optimization, in addition to environmental sustainability and security, to make the port complex more competitive. The ports of Tampa, Houston and Mobile in Alabama marketed themselves for five years as the “Gulf Coast Advantage” in an effort—unsuccessful so far—to attract ocean carriers from Asia through the Panama Canal, but Houston dropped out of the marketing effort in the spring for legal reasons associated with not having received FMC approval for talks.
Meanwhile, the China Daily recently reported that the Zhejiang provincial government in China has merged the large ports of Ningbo and Zhoushan under one ownership structure and also plans to do the same with the ports of Jiaxing, Taizhou and Wenzhou to prevent a price war.
Cernak said collaboration between ports is especially necessary in an age when shipping lines are closely cooperating to seek efficiencies.
The pitch to carriers and beneficial cargo owners is that ships have to call in South Florida because it is a large metropolitan market, but can then take advantage of new rail infrastructure to quickly reach other coveted population centers without having to stop at as many ports on the East Coast.
The Florida East Coast Railway in the past two years has added three long tracks of on-dock rail at PortMiami, rehabilitated a damaged rail bridge connecting the port with the mainland and restored a neglected main line to the bridge so that containers can be moved directly from the wharf up to Jacksonville and beyond.
In the summer of 2014, the FEC Railway opened an intermodal container transfer facility on property at Port Everglades.
Florida last year surpassed New York as the third most populous state, with more than 19 million residents, but also hosts almost 100 million visitors a year. Central Florida is a huge consumer market and home to many vacation resorts.
Using the FEC Railway, cargo can be offloaded in Cocoa Beach and trucked to the Orlando area.
Port and railroad officials say they can interchange intermodal railcars with the CSX and Norfolk Southern railroads in Jacksonville and have cargo in Atlanta, Charlotte, N.C., and Memphis, Tenn., within two days, and in the Midwest within four days.
Eric Olafson, trade development manager at Port Miami, also noted that South Florida has a turbocharged consumer market, because many people from Latin America keep a couple households and often stay three to six months at a time. That means they need to buy goods to furnish their living spaces, as well as clothes and other items.
Many malls in the region average a quarter more business than malls in similar-size areas in the Midwest because of the foreign stay-over phenomenon, he said.
The strong local market offers ocean carriers the ability to collapse their services by stopping in Miami or Everglades and unloading discretionary inland cargo along with containers for South Florida.
Cargo will be on the rail to inland destinations instead of returning to sea and having to be unloaded at another port, enhancing speed to market and creating efficiencies for carriers, Olafson insisted.
“So you get that first-in from Asia, plus a large domestic market,” he said.
“These are new efficiencies that weren’t available before,” Olafson said, adding that carriers are now looking into consolidating services and developing new efficiencies without so many stops, at the same time retailers have begun to reroute some cargo from the West Coast ports.
The state of Florida is making a concerted effort to market the entire state as a trade and logistics hub. Gov. Rick Walker and the state legislature have invested more than $850 million in port-related infrastructure during the past four years, Enterprise Florida—the economic development arm of the state—is promoting Florida exports and logistics workforce development, and the Florida Ports Council has helped the ports speak with a unified voice on policy and investment issues.
“I think you’re going to see more and more of this promoting Florida, because it makes sense,” Olafson said. “And we think once the retailers, the ocean carriers become aware of this the change will be inevitable.”
This article was published in the November 2015 issue of American Shipper.