Business Monday

Optimism existed at maritime conference but tough to find

I was in Long Beach, California, last week, at the 15th annual Trans-Pacific Maritime Conference, where the ocean shipping industry’s leaders were in abundance and optimism was in short supply.

The reasons were many.

First, shipping lines, logistics companies and others were licking fresh wounds. Just days before, on the heels of White House intervention, labor and management for the West Coast ports of Long Beach, Los Angeles, Oakland, Seattle, Tacoma and others agreed to get back to work at a normal pace, ending a slowdown and nine months of difficult negotiations over contract renewals.

But the damage had been done. Out on the ocean, to the horizon, ships were backed up, waiting to find a way to the docks that are so critical to U.S. imports of everything from apparel to electronics to automobile parts. The prediction is that it will take several months to eliminate the backlog.

Second, in recent years, the world’s largest shipping lines have added tremendous capacity with ever-larger ships, and at the same time added ever more debt to their balance sheets. The financial health of many of the world’s largest lines is, in the eyes of many, precarious.

Another trend is making their financial health precarious. By the time these 18,000- and 20,000-TEU container ships began sailing, the rapid trade growth of the late 1990s had slowed, further weakening the world’s largest shipping lines.

At the same time, ports from the western coasts of Canada and Mexico to the eastern coasts of the United States, including in Miami, have made large bets on increased traffic as shippers look to avoid L.A.-Long Beach and take advantage of alternative routes, including through the expanded Panama Canal. Not everyone is convinced the pie will get bigger and that the traffic will bear the billions of dollars of investment.

One of the keynote speakers at the event, hosted by the Journal of Commerce, was Soren Skou, the CEO of Maersk Line. It is the world’s largest container shipping line with about 600 cargo ships sailing the world. Skou, who indicated he will be in South Florida this week to visit with the leadership of the recently relaunched SeaLand brand, was alternately frank and coy during his comments about the industry’s future … optimistic as well as guarded.

Finding the optimism

Away from the large auditoriums where much of the negative energy was focused, in smaller conference rooms, optimism abounded. That’s because in sessions focused on the perishable trade, all of the speakers, myself included, saw more rapid, more profitable growth ahead.

Driving that trend are both a U.S. population seeking healthier options and willing to pay to have fruits and vegetables that were previously seasonal, available year-round, as well as the rising middle class in the developing world, from Latin America to Asia, which want more protein — whether in the form of chicken pork, beef or soybeans — and better healthcare, which pharmaceuticals can deliver.

In six of the past seven years, the United States has run a trade surplus in perishable trade.

Growing demand — whether imports or exports — is good news for many of the nation’s airports and seaports but it’s certainly true here, in South Florida, where Miami International Airport, PortMiami and Port Everglades play important roles in perishable trade. South Florida is a leader in fresh fish, flower, fruit and vegetable imports, and its exports of medicine are growing rapidly.

Growth rates

Overall U.S. exports set a record in 2014, according to the data recently released by the U.S. Census Bureau, up 2.78 percent to $1.62 trillion. But exports of the top 50 products that WorldCity has identified as being perishable increased 7.44 percent. Over the past decade, U.S. exports have risen 99.23 percent while these same top perishable exports have increased 155.06 percent in value.

On the import side, the story is much the same: U.S. imports reached a record $2.35 trillion in 2014, increasing 3.39 percent, but the nation’s leading perishable imports jumped more than three times as fast, up 12.14 percent. Over the past decade, while overall imports have increased 59.57 percent, perishable imports have jumped 115.88 percent.

Perishables accounted for about 9 percent of all trade in the United States in 2014, not an exceptionally high percentage but higher than it had been in years.

Bringing it home

The South Florida Customs district ranks fourth in the nation for pharmaceutical exports, one of six that shipped out more than $1 billion in medicine in 2014. The lion’s share fly from Miami International Airport.

It ranks first in the nation in fish fillet imports, and if 2015 is another good year at MIA, it would become the first “port” in the nation to ever import more than $1 billion in fish fillets. It finished 2014 at $945.55 million. Over at Fort Lauderdale’s Port Everglades, fish fillet imports have doubled in value since 2010, and they now rank as the ninth most important inbounds shipment.

At PortMiami, fish fillets rank No. 10, but had a slightly greater value that at Port Everglades; however, a more important perishable import was shrimp and other crustaceans, which moved up two positions to rank No. 5

South Florida, like the rest of the country, has seen large, double-digit trade growth rates, evaporate. But, like the rest of the country, it is finding strength in perishables.

Ken Roberts is the founder and president of WorldCity based in Coral Gables. kroberts@worldcityweb.com.

Top U.S. perishable exports, 2014

2014

1-year change

1-year change

10-year change

10-year change

Change

in rank

2014 rank

Perishable

exports

$183,151,398,596

$12,685,567,297

7.44%

$111,345,351,049

155.06%

0

1

Medicine

$24,350,570,975

$1,251,251,684

5.42%

$11,971,310,037

96.70%

0

2

Soybeans

$24,257,220,262

$2,659,971,367

12.32%

$17,570,358,847

262.76%

0

3

Plasma, vaccines,

blood

$14,818,199,414

$3,141,034,674

26.90%

$10,353,227,632

231.88%

-1

5

Wheat

$7,770,307,655

-$2,765,743,944

-26.25%

$2,599,074,096

50.26%

-1

6

Almonds, walnuts,

pistachios,

hazelnuts, etc.

$7,523,245,303

$414,651,338

5.83%

$5,644,253,426

300.39%

2

4

Corn

$11,170,730,958

$4,298,082,628

62.54%

$5,028,652,022

81.87%

0

7

Prepared foods,

beverages

$5,650,671,697

$166,762,491

3.04%

$3,349,639,418

145.57%

0

8

Chicken

$4,939,517,917

-$44,874,534

-0.90%

$2,900,319,533

142.23%

0

9

Pork

$4,881,998,618

$448,585,622

10.12%

$3,205,961,300

191.28%

0

10

Make-up and

skin-care products

$4,293,072,328

$206,826,631

5.06%

$2,471,783,964

135.72%

-2

13

Sugar and

starch residues

$4,015,877,740

-$1,706,888

-0.04%

$3,233,727,518

413.44%

1

11

Soybean oilcake,

other

solid residue,

not ground

$4,206,271,843

$207,324,647

5.18%

$3,139,575,238

294.33%

1

12

Insecticides, fungicides

$4,193,466,129

$281,860,654

7.21%

$2,456,997,765

141.49%

-3

17

Misc. mineral or

chemical fertilizers

$2,866,192,787

-$213,013,265

-6.92%

$2,866,192,787

NA

0

15

Beef, fresh or chilled

$3,090,335,451

$152,483,991

5.19%

$2,646,370,936

596.08%

SOURCE: WORLDCITY ANALYSIS OF U.S. CENSUS DATA

  Comments