Miami businesses are feeling a short-term pinch because of a now-resolved labor dispute that clogged crucial ports on the West Coast for months — but the slowdown might actually boost shipping traffic to PortMiami and other East Coast ports.
“The cheapest, fastest way to get goods from Asia to the U.S. is through the ports of Los Angeles and Long Beach,” said Steven Medwin, South Florida managing director at the global real estate firm Jones Lang LaSalle, which has a division that handles industrial logistics. “But because there is so much cargo that comes into the West Coast from Asia, it’s a big risk for companies to have it all going through a single choke-point.”
Forty percent of all imports enter the U.S. through Los Angeles and Long Beach before being shipped to the rest of the country via rail and truck.
The immediate threat to global trade is over: Ports up and down the West Coast reopened fully on Monday after dockworkers and maritime companies reached a tentative deal — brokered in part by U.S. Secretary of Labor Tom Perez — on overtime pay and other issues.
But the backlog of ships waiting to be unloaded could still take weeks and even months to clear, said Bruce Roberts, president of Sterling Transportation, a trucking company that ships goods from California ports to businesses in Miami.
Many of the goods Sterling ships to Miami are electronic equipment and clothing ultimately bound for export to Latin America.
“Our business is down 20 percent from what we would normally anticipate because the cargo wasn’t coming off the ships and we couldn’t guarantee our normal schedule of delivery,” Roberts said.
One local company, the Doral-based retailer Perry Ellis, blamed “prolonged port delays” on the West Coast for lower-than-expected revenue figures released last week.
But if businesses want to move their wares east instead of relying on the West Coast, Miami will be ready to handle the diverted traffic, said PortMiami director Juan Kuryla.
The port has embarked on a series of infrastructure improvements including the PortMiami tunnel, upgrades to container terminals and a rail link connecting the docks with the Florida East Coast Railway yard near Miami International Airport.
And a dredging project — scheduled to wrap up this July — will turn Miami into a deepwater port capable of supporting the new, much larger ships that will begin crossing the Panama Canal in 2016.
“Every port wants to grow its business, although we hate to see this kind of trouble on the West Coast,” Kuryla said.
The new business, if it comes, will arrive gradually.
“You can’t assume that Miami is going to take over the capacity of Los Angeles or Long Beach,” said Brandon Fried, executive director of the Airforwarders Association, which represents companies involved in shipping goods by air, land and sea. “It doesn’t have the infrastructure or the space. But the slowdown and the continued threat of future stoppages are making all the East Coast ports viable options for the supply chain.”
Fried said he expects ports up and down the East Coast —including those in Miami, Jacksonville, Savannah, Baltimore, the Carolinas, New Jersey and New York — to benefit from increased traffic.
A study by Jones Lang LaSalle found that the change is already underway. Between 2007 and 2013, the volume of shipping to the West Coast ports dropped by 6.8 percent while increasing on the East Coast by 19.1 percent.
Some local companies had already bypassed the West Coast route before the slowdown began.
“We’re big enough that we can afford to have our shipments sent directly to PortMiami through the Panama and Suez canals,” said Rhonda Socol, logistics manager for City Furniture, which is headquartered in Tamarac. “We only go through the West Coast if we absolutely have to.”
But Socol said the West Coast slowdown is having one effect on City Furniture: shipping goods to Miami has become more expensive.
“We’ve found that other large importers are starting to avoid the West Coast and taking up space on vessels going east instead,” she said.