If you are looking for a case study in globalization and logistics, this is one. It involves three countries, four airports and one multinational with a household name.
Globalization, of course, has winners and losers. Generally, Miami and South Florida have been winners, thanks to geography, access to the ocean, a large population of Caribbean and Latin American immigrants with connections in their native lands and, in the case of the Cuban diaspora cut off from those connections, language and a willingness to work hard to regain what had been lost.
In this case, however, South Florida has not been a winner.
Costa Rica is one of the three countries. It is South Florida’s No. 9-ranked trade partner, and this is the ninth installment of a series of analyses of the top 10. Preceding this column were analyses of South Florida trade with Brazil, Colombia, China, the Dominican Republic, Chile, Honduras, Peru and Venezuela.
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While Costa Rica ranked No. 9 through the first five months of 2015, it ranked No. 4 just one year ago, according to the most recent U.S. Census Bureau data available. Two years ago, it ranked No. 3.
Costa Rica’s trade with South Florida has evaporated. It has fallen from a peak of $3.39 billion through the first five months of 2013 to $1.31 billion this year. That’s a 60.63 percent decline in just two years. By way of comparison, South Florida trade during that period is down just 4.67 percent.
U.S. rank: It’s a similar story on the national level. Costa Rica, which ranked No. 32 among more than 225 U.S. trade partners one year ago, has fallen nine positions to rank No. 41 this year. Its U.S. trade has fallen 43.39 percent. Only two countries among the nation’s top 50 trade partners have seen a more rapid decline in trade this year: Saudi Arabia and Kuwait.
But Costa Rica doesn’t have oil. What Costa Rica had was Intel’s bustling microprocessor manufacturing plant. What South Florida had was Miami International Airport, the most obvious gateway to the United States.
Then Intel shifted much of its Costa Rica manufacturing to Malaysia and, apparently, some of its logistics to Houston’s Bush Intercontinental Airport as well as New Orleans’ Louis Armstrong International.
At this time last year, Costa Rica led the world in computer chip imports into the United States, with a total of $2.98 billion. So far this year, Costa Rica’s imports totaled $207.44 million, a 93.03 percent decline. It now ranks No. 12. Computer chip imports from Malaysia, meanwhile, have almost doubled, rising from $2.28 billion in 2014 to $4.31 billion this year.
The fourth airport is Anchorage International Airport. With the shift to Malaysia, imports of computer chips through Alaska have increased from $1.38 billion through May of 2013 to $3.75 billion this year. It is now the leading airport for these imports into the United States.
Imports into New Orleans International have fallen from $2.28 billion in 2013 to $962.06 million this year. Houston Intercontinental’s imports have dropped from a high of $1.80 billion in 2012 to $23.22 million this year.
The third country, one that is only now entering the picture, is Vietnam. Intel is now assembling computer chips there, in Saigon, or Ho Chi Minh City. Imports into the United States from Vietnam have increased from $22.23 million one year ago to $887.31 million. It now ranks No. 3 behind only Malaysia and Taiwan. One year ago, it ranked No. 20.
South Florida trade: Why, so far, the focus on comkrobputer chips to the exclusion of all else? Because just two years ago, computer chips from Costa Rica accounted for more than 80 percent of the value of all imports, with a value of $2.01 billion. Today, the value is $1.09 million, falling right behind aluminum scrap with a rank of No. 41.
Importance to South Florida: As the third-ranked trade partner only three years ago, clearly Costa Rica was an important player in the South Florida trade picture, trailing only Brazil and Colombia. Its greatest market share actually occurred the next year, in the first five months of 2013, at 6.59 percent. So far this year, the market share for Costa Rica is 2.88 percent.
South Florida competition: South Florida has been the No. 1 gateway for U.S.-Costa Rica trade as far back as the eye can see, with one exception: 2012, when Houston ranked No. 1. But so far this year, while Houston’s market share is greatly diminished — from 27.93 percent to 14.52 percent — South Florida’s has continued to fall as well. It stood at 42.62 percent through the first five months of 2013; this year, it stands at 29.06 percent. If it finishes the year below 30 percent, it will be the first time that has occurred in at least two decades.
Gains are being spread across the country, in places like New Orleans, Philadelphia, Los Angeles, New York City and even Anchorage.
South Florida exports to Costa Rica: Exports to Costa Rica are dominated by cellphones and to a lesser extent medical devices and computers. Overall, exports totaled $854.92 million through May, down slightly from the 2013 record pace of $868.98 million.
South Florida imports from Costa Rica: The leading import from Costa Rica through the first five months of 2015 is medical devices, which can be anything from big, complex and expensive imaging equipment all the way down to needles. In 2015, it is accounting for 43.04 percent of all imports from Costa Rica into South Florida, with nine times the value of the No. 2 import, a category that includes windshield wipers and car lights. Imports have fallen from $1.70 billion last year to $454.20 million
Surplus/Deficit: In another sign that the Intel era has, if not ended, at least gone into abeyance, South Florida is on track to register its first trade surplus with Costa Rica since 2009.
Coming next: France is making its first-ever appearance in South Florida’s top 10.
Reach Ken Roberts, president of World City, at email@example.com
Costa Rica: How South Florida compares
Costa Rica trade
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Low Value Shipments
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Source: WorldCity analysis of U.S. Census Bureau data