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Transportation
Through October 1996, the last month for which figures were available from the Florida Department of Labor & Employment Security, transportation employment in Florida had surged 4.4% over the previous year, fueled by a 6.8% jump in job gains in the airline industry, which had been the weakest sector in the 1990s. Discount carrier Southwest Airlines was a major factor. The discount carrier entered the market in January, and by the end of the first quarter, a "Southwest effect" was already in evidence in data compiled by the Florida Department of Commerce. Visitors traveling to Florida by air had increased by more than 7% from January through March, while those arriving by car declined more than 9%.
In October, the launch of Delta Air Lines' rejoinder to Southwest - low-fare Delta Express, with 62 flights to five Florida cities - and the relaunch of ValuJet brought the number of airlines serving Florida markets to 20. But Jim McKenna, chief of the Southeast Bureau, warns that the skies over Florida are getting a bit crowded. "We're probably approaching the peak of the current cycle," McKenna says. "You're seeing fuel prices going up, which pretty much equates to dollar for dollar hits in operating costs." Fleet upgrades and increased Federal Aviation Administration vigilance of aircraft maintenance procedures will also drive up costs, eliminating some of the weaker airlines, McKenna believes. He concludes: "When upstarts like ValuJet and Kiwi got started, the major airlines were in a contraction mode. Now, most are in expansion mode. Something has to give."
The weaning process may already have begun. Kiwi Airlines filed for bankruptcy in October; commuter AirTran Airways cut service between Orlando and five mid-sized cities; and American Trans Air cut its work force 15% and canceled flights between Boston and Orlando as well as Boston and St. Petersburg-Clearwater.
Riding the crest of an import-export market that is growing more than twice as fast as the overall Florida economy, Florida's 14 seaports continue to pump jobs and construction dollars into their surrounding communities. Thanks to the North American Free Trade Agreement and proximity to the Caribbean and Latin America, Florida's ports have experienced double-digit cargo growth in the 1990s. By 1995, four of Florida's ports - Miami, Everglades, Jacksonville and Palm Beach - ranked among the top 20 ports nationally in container cargo volume. "Latin America is the second fastest-growing economic region in the world," says John LaCapra, president of the Florida Ports Council. "We're no longer on the edge; we're at the crossroads."
Direct employment at the seaports accounts for a modest 20,000 jobs, but Florida Seaport Transportation and Economic Development Council pegs the number of jobs that are seaport-generated at 300,000. The reason: Florida's seaports have been spending an average of $100 million to $150 million a year on capital improvements all through the 1990s. That number will balloon dramatically in 1997, aided by a $210 million bond issue by the state of Florida that the ports will match dollar for dollar. "Over the next three years, we will build $420 million in infrastructure," LaCapra says. "And that doesn't include some significant projects that the ports will undertake on their own."
Driving the multimillion dollar scramble for infrastructure upgrades is a trend in the shipping industry toward bigger ships. In the 1980s, cargo ships carried as few as 1,000 containers. Today's ships carry 5,000 to 6,000 containers, and ships capable of carrying 7,000 containers are in the planning stages. But as they gear up for bigger ships, port managers are not anticipating a redux of double-digit trade growth. "We're looking for a 5% increase in tonnage in 1997," says Joseph Strain, director of marine marketing and sales for the Jacksonville Port Authority. To keep jobs growing, Jacksonville is trying to grow its bulk-commodities business - less profitable than the container business, but more labor-intensive. Port Everglades is coming off a 70% increase in container cargo in fiscal 1995, thanks to completion of a 155-acre terminal, and a 14% increase in 1996. But the port projects more modest increases ahead. "We're looking for 3% to 7% growth annually in containerized cargo volume," says David Miller, director of communications.
Traffic jam
Everglades is one of few Florida ports with direct access to Interstate 95. A major constraint in the growth of other South Florida ports is the "intermodal" bottleneck between the docks and interstate highways and rail lines. In Miami, trucks carrying cargo and buses carrying cruise line passengers from dock to airport and back move at a snail's pace along city streets. "The state Department of Transportation is aware of the intermodal problem," the Port Council's LaCapra says. "This past year, getting the bond issue helped solve the ports' dock infrastructure needs. In 1997, hopefully, we can turn our attention to the intermodal needs."
Florida's ports expected to benefit if CSX's proposed merger with Conrail materialized; at press time, the outlook was still uncertain. A merger would open up new markets for Florida's products, and CSX, which has its railroad unit based in Jacksonville and operates 60% of the 2,900 miles of track in the state, promised to pump some of the expected savings from a merger into infrastructure improvements that will help Florida ports.
Florida's futuristic $5.3 billion high-speed rail project linking Miami, Tampa and Orlando continues to move forward even without the promise of direct federal assistance. Florida, which already has committed to assist the private consortium to the tune of $70 million a year for 40 years, will proceed with an "investment grade" ridership study in 1997. "If the federal government will provide credit enhancements, we still think the project will work," says Charles H. Smith, manager of the state's high-speed transportation program.
In the trucking industry - the largest direct employer in the sector after airlines - business is good but increasingly competitive. "We have record revenues," says Jim Shaeffer, president and chief executive officer of petrochemical hauler McKenzie Tank Lines, a Tallahassee trucker with 1000 trailers, 500 tractors and 900 employees. "Deregulation has brought increased competition, rates are being forced down, and we are running many more miles to generate approximately the same revenue." Shaeffer looks for more of the same in 1997. "We'll be hiring, but then we're always hiring," says Shaeffer. "Driver turnover in the industry is about 40% annually."
It is the same at FRP Properties in Jacksonville, which owns Florida Rock & Tank Lines, primarily a petroleum hauler, and SunBelt Transport, a flatbed transporter of construction materials. "We look for continued modest growth," says President John Anderson. "The flatbed business is more cyclical than petroleum, but we are cautiously optimistic. Generally, growth in our industry is limited to driver availability. We see that continuing. It's a major challenge but also an opportunity."
