Business Monday

Gateway City: With imports up, Miami’s grand trade surpluses could be behind us

Ken Roberts
Ken Roberts

There are changes afoot in the way this nation trades with the world, and that includes here in South Florida.

These changes can be viewed easily from the perspective of the balance between exports and imports. Trade deficits are, of course, often a topic of debate and contentious discussions.

In a country dominated by large trade deficits, the South Florida Customs district has had the nation's largest trade surplus — more exports than imports — for nine years in the past 10 and all but three years this century. From 2008 to 2011, South Florida set a national record for the largest surplus in U.S. history, breaking its own record three of the past four years.

South Florida is the only Customs district to have registered a surplus every year for more than two decades, serving as it does as “the shopping cart” for Brazil, Colombia and the rest of Latin America and the Caribbean.

But now, there’s a good chance South Florida will never set a record again, or at least not anytime soon.

It won't set a record this year, to be sure, and it will finish behind Seattle for the second straight year. Seattle, which has registered a surplus all but four years in the last two decades, owes its export strength to Boeing, which manufactures its jets from there.

More about what’s happening in South Florida, and why, in a moment. But first a broader look.

A number of Customs districts are getting into the trade surplus game. Seattle and Miami are the only two Customs districts to have led the nation the last two decades, and that’s not likely to change as Seattle seems destined to carry the mantle for a number of years.

But in 2013, Houston registered its first trade surplus since 1998, as much a result of falling oil prices and oil imports as increasing gasoline exports, but a surplus nonetheless. Honolulu registered a record trade surplus, its fifth consecutive year in which exports topped imports. In 2013, Norfolk registered its first trade surplus since 1998. The U.S. Virgin Islands, while not a powerhouse among Customs districts, registered its first trade surplus in at least 22 years, if not ever.

This is having an impact at the macro level — the United States deficit last set a record in 2008, as the global economic crisis was preparing to hit. It’s also having an impact at the Customs district level, as evidenced above.

Drilling down to the port level — the building blocks of the roughly four dozen Customs districts — tells an equally compelling story.

Through July, the most recent U.S. Census bureau data available, 21 of the nation’s roughly 470 airports, seaports and border crossings trade surpluses of at least $1 billion. While the traditional wisdom is that airports tend to be the engines of U.S. trade surpluses, responsible for high-value, lightweight exports that fly, rather than seaports, largely associated with less expensive, less time-sensitive and less lightweight goods, there is at least some balance currently among the 21 “ports” with $1 billion surpluses.

Six are, in fact, seaports, led by the Port of New York. Six are border crossings, with five of those bordering Canada, the nation’s No. 1 trade partner. Nine, including and led by Miami International, are airports.

As with the Customs districts, there are changes. Out west, for example, at Los Angeles International Airport, which through July is registering a $2.67 billion trade surplus not far from the two beachheads for Chinese imports, the Port of Los Angeles and the Port of Long Beach, its first in five years.

It's happening down south, at the Port of Houston, which is on track to register a record trade surplus and which had a large enough surplus in 2013 that it carried the entire Customs district — which includes nearby seaports and airports – to its first surplus in more than a decade, as previously mentioned. Through July, the Port of Houston, a leading exporter of gasoline and other fuels, had the nation’s third largest surplus, at $9.88 billion.

Gasoline exports is the most common driver of increasing exports at many of the “ports” in the chart accompanying this story, as the United States has become a net exporter. Others are aircraft — including not just Seattle area ports but also Cleveland International Airport.

But in South Florida, it’s something of a different story. MIA has the nation’s fourth largest surplus, totaling $7.15 billion through July, trailing only the Port of New York (led by automotive exports), Paine Field at Everett, Wash. (Boeing) and the Port of Houston.

MIA’s 2014 surplus is down from the record years of 2008 through 2012, when it was above $10 billion four of five years. But its trade is not down from those years — meaning imports are growing more rapidly than exports. What’s changed? China. With the expansion of Asian freighters — all-cargo planes — coming to MIA, trade is growing from those high-surplus years while the surplus is shrinking. (This year, overall MIA trade is down from the 2013 record but the overall trend is up.)

This, then, is one reason that South Florida’s reign as the leading Customs district for surpluses is likely a thing of the past.

There’s a second reason as well. While Port Everglades trade tends to be north-south focused, Port Miami will become increasingly east-west focused once its infrastructure work and the Panama Canal expansion is completed. More and bigger ships from Asia, in essence, will call at Port Miami. That would suggest an increasing trade imbalance in favor of imports.

Among the nation’s roughly 475 airports, seaports and border crossings, PortMiami ranks No. 403. Its deficit is $1.21 billion through the first seven months of 2014. That’s small potatoes to the ports of Los Angeles and Long Beach ($137.96 billion) and the other seven ports with deficits in excess of $10 billion, of course.

LAX exports of aircraft and aircraft parts have increased 18.86 percent to $4.14 billion this year, taking the airport from a deficit to a surplus and lifting its rank significantly – 388 places to No. 14.

But as PortMiami’s grows — and that is an assumption, of course — along with MIA’s, as South Florida more fully embraces the global economy, record trade surpluses will probably only be visible in the rear-view mirror.

Surpluses by port for July

  

Surplus/Deficit

July 2014 YTD

July 2013 YTD

July 2009 YTD

July 2008 YTD

July 2004 YTD

Change in rank

July 2014 YTD

Total all exports

-$ 412,723,474,385

-$398,911,954,571

-$267,606,223,485

-$494,274,641,453

-$355,247,883,071

0

1

Port of New York

$15,244,067,416

$16,757,233,186

$8,129,034,705

$13,054,080,541

$5,550,529,428

0

2

Everett, Wash.

$13,178,143,125

$10,510,213,303

$6,728,599,559

$5,644,292,219

$3,425,970,859

0

3

Port of Houston

$9,882,292,769

$7,866,491,079

$3,840,939,416

-$5,187,901,303

-$3,339,862,472

1

4

Miami International Airport

$7,147,896,018

$6,719,167,352

$9,438,119,360

$10,303,758,288

$3,699,987,824

13

5

Port of Gramercy, La.

$ 7,088,687,642

$1,867,082,540

$1,932,846,512

-$4,597,839,690

-$368,037,468

10

6

Detroit, Mich.

$6,793,739,401

$2,730,356,935

$6,802,182,076

$9,783,808,669

$3,443,035,203

5

7

Pembina, N.D.

$4,731,472,097

$3,781,471,247

$1,230,213,715

$1,614,337,792

$476,873,817

1

8

Honolulu International Airport

$4,320,242,445

$4,378,560,095

$2,082,558,457

$2,169,373,190

-$406,513,004

2

9

Blaine, Wash.

$4,047,028,368

$4,112,811,280

$1,308,752,695

$2,700,127,076

-$866,654,585

3

10

Portal, N.D.

$3,560,510,896

$3,619,587,931

$1,603,759,976

$1,536,241,361

$239,914,515

4

11

Buffalo-Niagara Falls, N.Y.

$3,330,330,403

$2,820,140,519

$2,576,243,195

-$1,331,794,972

-$3,249,798,271

-4

12

Seattle-Tacoma International Airport

$3,125,565,269

$4,884,995,688

$5,420,761,572

$6,400,726,050

$5,256,568,651

-3

13

Cleveland International Airport

$3,071,150,267

$4,291,798,408

$2,135,399,038

$2,253,533,938

$337,407,566

388

14

Los Angeles International Airport

$2,674,259,846

-$1,369,236,424

$1,755,998,086

$2,982,024,733

$1,103,015,702

-8

15

Salt Lake City International Airport

$2,270,813,727

$6,108,790,149

$3,950,333,209

$4,271,297,218

$49,593,313

-2

16

San Francisco International Airport

$2,268,376,263

$2,866,611,929

$1,041,443,101

$89,490,968

-$2,925,435,134

0

17

San Juan International Airport

$2,215,567,159

$1,980,512,250

$1,821,419,190

$1,982,139,265

-$214,288,905

-12

18

Port at Aberdeen-Hoquiam, Wash.

$1,754,955,220

$6,613,027,440

$88,501,289

$184,148,915

$49,968,385

2

19

Port at Longview, Wash.

$1,683,265,212

$1,612,110,708

-$6,882,233

$179,768,077

$377,673,034

4

20

Port at Kalama, Wash.

$1,493,678,836

$1,243,296,306

$1,051,247,970

$2,241,949,159

$664,702,012

1

21

Brownsville, Texas

$1,389,335,570

$1,416,910,113

$1,238,529,333

$1,605,388,138

$242,490,883

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

  Comments