Business Monday

In PortMiami’s future, China likely to play an even greater role

If it sometimes seems like PortMiami is more focused on tomorrow than yesterday, it’s understandable.

With its tunnel now completed, the rail spur to the port back in place, the dredging to deepen the channel nearing completion, and the reason for all these costly and complicated infrastructure projects — the Panama Canal expansion — scheduled to open to mega-ships next year, PortMiami is banking on a bright future of significantly increased container traffic.

It will be the first seaport from Miami to Norfolk, Virginia, with a channel depth of at least 50 feet, the requisite depth to handle the larger ships when fully laden. These are the ships that will soon be able to traverse the expanded Panama Canal. Port Everglades and a number of other ports are also pursuing deepening projects but PortMiami will be first.

There’s a logic, of course, to PortMiami’s “build it and they will come” strategy. China is already PortMiami’s top trade partner, both in value and in tonnage, the only South Florida port with that distinction. And much of what is expected to steam through the expanded canal will be from China, the world’s manufacturing and assembly plant.

It is easy to lose sight of the significant change the expanded canal will bring. When the canal expansion is completed, ships of about three times the container capacity of today will be able to cross from the Pacific Ocean to the Gulf of Mexico, bound for the United States’ east coast. That has the potential, over time, to drastically alter the dynamics of South Florida’s import-export trade ecosystem — and with it, traffic flow, real estate pricing and configuration and the employment base.

There are, of course, many “ifs” in all this. The canal has yet to set its tariff schedule, which if too high could discourage shipping lines from diverting traffic from the ports of Los Angeles and Long Beach, which now handle most of the Asian container traffic bound for the United States, or diverting it to Prince Rupert in Canada, Lazaro Cardenas in Mexico, or even to a westerly route through the Suez Canal, though that is least likely.

There are factors in the global economy today — much less unforeseen ones — that could have an effect, including a weakening Chinese economy, a strengthening U.S. dollar, and a workforce in Mexico that is competitive with Chinese labor.

Against that backdrop, let’s take a look at 2014 and what it meant for PortMiami in tonnage, rather than value. This is the third of three columns on tonnage trade, with the first two focused on the Miami International Airport and Port Everglades. Traditionally, in this column, we talk about trade in terms of value, or dollars.

Combined, these are the three primary engines of not only South Florida’s trade with the world but the entire state’s. Jacksonville and Tampa are not insignificant seaports but most of our international trade flows or flies through the three local ports.

In 2014, PortMiami’s exports slipped an even 4 percent while imports grew 6.28 percent. Port Miami ranks No. 44 among the nation’s leading airports and seaports in tonnage and No. 32 in value.

Port Everglades ranks No. 31 in value and, by tonnage, No. 32. MIA ranks No. 17 in value and No. 91 in tonnage, a spread that is not uncommon with airports since flying heavy things like cement and cars is impractical.

China has been Port Miami’s top trade partner, by tonnage, for at least a decade. It has been No. 1 as an import partner that entire time and, since 2011, when it surpassed the Dominican Republic, on the export side as well. (It has surpassed Honduras in 2008.)

Tonnage matters, rather than value, within the industry because that’s how charges are generally levied and paid. PortMiami, in other words, stands to drive additional revenue to county coffers if the mega-ships use the expanded Panama Canal to transport goods from China to the United States’ east coast to dock here.

Already, China has become increasingly important to the port’s future. A decade ago, China accounted for just 8.54 percent of the tonnage finding its way to the port. In 2014, that percentage had almost tripled, to a record 21.95 percent. The next four countries are the Dominican Republic, at 7.70 percent in 2014 followed by Colombia, at 5.31 percent; Honduras at 4.96 percent; and Brazil at 4.25 percent.

In 2004, in fact, PortMiami exported more in tonnage not only to the Dominican Republic and Honduras but also Haiti.

On the import side, China accounted for 26.32 percent of all tonnage, down slightly from the 26.68 percentage in 2012 but the third straight year above 26 percent. Brazil and Canada are ranked second and third, with 6.53 percent and 4.75 percent, respectively.

China is one of four of PortMiami’s top 15 trade partners that set a record for tonnage in 2014. In addition to China, also setting records were Colombia, India and Mexico. The United States has free trade agreements with two of these three — Mexico and Colombia — and India is one of the United States’ fastest-growing major trade partners.

Ken Roberts is the founder and president of WorldCity, a Coral Gables-based company. He can be reached at kroberts@worldcityweb.com.

PortMiami’s top trade partners in 2014 (in metric tons)

Change in rank

Rank in 2014

 

2014

1-year change

1-year change

10-year change

10-year change

 

PortMiami total tonnage

5,799,794

79,957,302

1.40%

-786,104

-11.94%

0

1

China

1,272,841

61,389,018

5.07%

710,096

126.18%

0

2

Dominican Republic

446,688

-54,078,495

-10.80%

20,066

4.70%

1

3

Colombia

307,731

41,687,079

15.67%

81,179

35.83%

-1

4

Honduras

287,655

-53,185,536

-15.60%

-129,925

-31.11%

0

5

Brazil

246,573

-4,437,747

-1.77%

-190,989

-43.65%

0

6

Guatemala

206,877

-9,423,724

-4.36%

-30,669

-12.91%

23

7

India

170,022

135,023,586

385.80%

116,797

219.44%

-1

8

Netherlands

162,656

-21,831,854

-11.83%

-20,169

-11.03%

2

9

Canada

161,802

30,651,802

23.37%

161,490

51783.78%

2

10

El Salvador

145,604

16,002,399

12.35%

23,600

19.34%

3

11

Costa Rica

130,399

18,813,375

16.86%

1,209

0.94%

-2

12

Panama

122,904

-20,928,831

-14.55%

47,211

62.37%

9

13

Mexico

122,580

49,560,251

67.87%

108,729

784.95%

-1

14

Haiti

119,378

-8,299,764

-6.50%

-105,113

-46.82%

-6

15

Indonesia

119,184

-49,871,743

-29.50%

82,336

223.45%

SOURCE: WORLDCITY ANALYSIS OF U.S. CENSUS BUREAU DATA

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