October 31, 2014

International Trade

David Poppe | 1/1/1996
It was another big year for trade, and though growth may slow in 1996, overall cargo traffic should keep rising.

During the first six months of 1995, Florida's international trade activity was up 21%, with $26 billion worth of goods passing through U.S. Customs districts in the state.

More importantly, the state is producing more goods for export. Florida-origin exports, which are products mined, manufactured or grown in the state, made up $11.4 billion worth of the state's trade volume during the first half of the year, a 19.4% increase over 1994. Brazil alone purchased $1.1 billion worth of Florida-origin goods in the first half of the year.

Shipping
Port officials around the state expect more growth in 1996. Miami International Airport handled 1.7 million tons of cargo in 1995, excluding airmail freight, and the airport anticipates handling 1.8 million tons this year. International freight should rise from 1.425 million tons in fiscal 1995 to 1.5 million tons in 1996, a 5% growth rate.

At the Port of Miami, cargo tonnage rose by 7%, to 5.8 million tons, in the fiscal year ended Sept. 30, and port officials expect at least 8% growth in tonnage this year. The port spent $100 million in 1995 on four new gantry cranes, improved terminal facilities, expanded berths and other infrastructure additions. The port hopes to begin construction in April on 53-acre Maritime Park, which would increase cruise ship capacity by 40% and enable the port to board cruise passengers downtown, nearer to shops and restaurants. Construction of Maritime Park would create 25,000 jobs, says port director Carmen Lunetta.

In Jacksonville, the seaport handled 5.6 million tons of cargo, a 9% increase over 1994. Included in that figure was a 13% increase in containerized cargo, to 3.36 million tons, and a 7% increase in auto traffic, to 458,373 vehicles, or 751,000 tons. It was the sixth consecutive year of traffic increases at Jaxport, which anticipates handling 6 million tons of cargo in 1996.

Jaxport is expanding aggressively. Generally, it is cheaper to ship freight on water than on land, meaning Jacksonville's location gives it an advantage over Miami or Broward's Port Everglades for cargo coming from the north. That's a message port officials are trying to convey to Latin America. While Jacksonville's overall cargo tonnage rose 9% last year, its trade with Latin America rose 27%.

Jacksonville's disadvantage, obviously, is that it lacks South Florida's infrastructure of international banks and Spanish-speaking professionals. But another of its advantages is the port's capacity for expansion. The Jacksonville Port Authority recently purchased 565 acres of land at its Blount Island terminal. Jaxport is also looking into a 50-acre expansion at its Talleyrand terminal.

"We have the greatest expansion capacity of any port in Florida," says spokesman Neal Ganzel.

Florida's fastest-growing large port is Port Everglades. After finishing improvements on its 155-acre Southport complex in late 1994, Port Everglades enjoyed a 65% rise in containerized cargo volume in fiscal 1995. The port handled 3.5 million tons of containerized cargo in 1995, up from 2.1 million tons in fiscal 1994. Broward taxpayers benefited, too, as Port Everglades saw its operating profit increase from $15.9 million in 1994 to $20.1 million in 1995.

For 1996, Port Everglades spokesman David Miller says growth will be modest. "I'd love to tell you we're going to have another 65% growth year, but that's not going to happen," Miller says. He thinks cargo volumes could rise by 4% to 7%.

Air Cargo
A homegrown case study of the effects of the trade boom on Florida is Miami cargo carrier Amerijet International Inc. The company recently moved into a new 105,000-square-foot warehouse facility near Miami International Airport (MIA) and operates more than 20 flights per week, moving cargo between five major U.S. cities and 18 international destinations, with its hub in Miami. Amerijet previously operated out of a 4,400-square-foot facility near the airport.

Amerijet began in the 1970s as a contract carrier for U.S. overnight delivery companies like Federal Express and Emery. But as those companies added their own planes and routes, Amerijet changed course. Chief Executive Officer David Bassett decided in 1987 that Amerijet itself would become a freight hauler.

Recession and the Gulf War-related fuel crisis of 1991 hurt the company, but in the past four years the liberalization of Latin economies has fueled a business boom.

In 1991, Amerijet had five airplanes and four weekly routes. Now, there are 11 planes and at least 20 weekly routes. Since 1993, Amerijet's cargo volume has increased from 5,000 tons to 50,000 tons, and its employee count has tripled, to 350 people. Revenues for the privately held company exceed $60 million, Bassett says.

Bassett concedes the frenetic growth of the past few years can't continue, either for his company or for the state. "I definitely see it leveling off," he says.

The number one fear of most international traders is a reversal of fortune in Latin America. Bassett notes that when the Mexican peso crisis hit, Amerijet felt it immediately. Mexico virtually stopped importing goods, and while it exported more, freight haulers can't make money flying empty planes into Mexico. Also, the manufactured products that Amerijet had flown into Mexico are more expensive to ship than the vegetables and fish Mexico sends to the U.S. So freight haulers lost the more lucrative portion of their business.

Another concern for Bassett, however, is the future of MIA. He would like to see Dade County buy several hundred acres of land west of the airport for expansion. Although the county will spend more than $3.2 billion over ten years to upgrade MIA, the airport may simply be too small to handle projected growth.

Without more land, Bassett says, the airport faces the long-term loss of cargo business to other cities. "The city fathers are either going to figure out a way for the airport to grow, or they are going to lose the business," he says.

If Miami stumbles, Orlando might emerge as an alternative. Orlando International Airport now handles a fraction of the volume of cargo that passes through Miami. But business is growing fast, rising from 233,000 tons in 1994 to nearly 255,000 tons this year and an estimated 275,000 tons for 1996, says Ken St. Amand, the airport's cargo marketing manager. Orlando has emerged as a major trade point for export and import of fresh cut flowers and nursery stock.

This summer, construction will begin on a half-dozen office and warehouse buildings that will be open to all freight forwarders at the airport. St. Amand says the buildings will range from 3,000 to 10,000 square feet and enable truckers to deliver and pick up cargo from a single site rather than make multiple stops at freight forwarders' warehouses.

St. Amand says the airport could handle much more traffic, but cargo carriers are sometimes reluctant to fly to Orlando because of a lack of exports to fill up planes headed back to Latin America.

However, St. Amand notes that while MIA consists of 3,200 acres, the Orlando airport sits on 15,000 acres. "We're just trying to be an alternative to Miami," he says. "We realize Miami has reached a saturation point. It can't handle anymore."

Tags: Florida Small Business, Politics & Law, Business Florida

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