Business Monday

Overlap: One challenge largely absent in S. Fla.

Ken Roberts
Ken Roberts

In communities around this country, seaports compete, or at least think they do.

At a seaport conference in Mexico earlier this month, the recently retired port director from Seattle mentioned in passing that his former port and the neighboring Port of Tacoma were moving toward an alliance, embattled by competition from nearby ports in Canada, at Vancouver and Prince Rupert.

While such a concept might have been considered heresy in years gone by, or at the very least anti-competitive, no one seemed to bat an eye when Tay Yoshitana made the comments during the American Association of Port Authorities event in Merida, where I was speaking on trends in U.S. trade with Mexico and other Latin American countries.

Seattle and Tacoma are well-known within the seaport industry for their, shall we say, spirited competition, as are the Port of Los Angeles and its neighbor, the Port of Long Beach. Toss in their respective airports and you see something that you do not really see in South Florida: overlap.

Seven nations are among the two Southern California ports’ top 10 trade partners — China, Japan, South Korea, Taiwan, Vietnam, Thailand, Indonesia and Australia — and the first four of those are also in Los Angeles International Airport’s top 10.

While the shipping lines like this level of competition, and can benefit from it, it can make it tough on the ports. Throw in new alliances between and among the world’s largest shipping lines and it’s even tougher on the ports as well as increasingly complex, as the Southern California ports are discovering.

In the Pacific Northwest, Seattle and Tacoma share nine of the top 10 trade partners. As is the case with the two Los Angeles-area seaports, China, Japan and South Korea are the top three for both, but the list also includes Taiwan, Vietnam, Indonesia and Canada. Seattle-Tacoma International has three of those in its top 10: China, Japan and Taiwan.

I bring the airports into the equation later only because air trade tends to differ from ocean-borne trade — flowers fly and cement sails — so any competition between an airport and a seaport is limited, often short-term and frequently a response to specific market conditions.

In South Florida, the situation is different.

Granted, the West Coast ports are intake valves for Asian imports for much of the nation, a national role generally not shared by Port Miami, Port Everglades and Miami International Airport.

But a look at the top 10 trade partners for Port Miami and Port Everglades tells a different story, one that is healthier from the port point of view.

It reveals the two share only five top 10 trade partners — Costa Rica, Chile, Brazil, Colombia and Peru — and that MIA counts only three of those among its top 10: Costa Rica, Brazil and Colombia.

Further, wherein both Southern California and the Pacific Northwest the top three trade partners were identical — China, Japan, South Korea – in South Florida, there are three different top trade partners — Venezuela at Port Everglades, China at PortMiami and Brazil at Miami International Airport.

There is no overlap among the top two trade partners, either: Honduras for Port Everglades, the Dominican Republic for PortMiami and Colombia for MIA.

Only when you get to the third most important trade partners do you start to see overlap — remember, in the Pacific Northwest and Southern California, there were a total of three countries for all six “ports,” in the same order — the Dominican Republic, PortMiami’s second most important trade partner ranks No. 3 with Port Everglades and Honduras, No. 2 with PortMiami ranks third with Port Everglades.

Looking more broadly, at the top 10 for each, most of the overlap beyond Honduras and the Dominican Republic is less critical. For example, Brazil ranks No. 6 for Port Everglades and No. 9 for PortMiami — but is not a significant trade partner for either, accounting for just 4 percent of trade for the former and 3 percent for the latter.

Over at Miami International Airport, Brazil is more important, accounting for 21 percent of total trade — but, again, these exports and imports will largely be different from those moving through the two seaports.

Similarly, Colombia and Guatemala are shared by the two seaports, ranking No. 7 and No. 8 for Port Everglades, respectively, and No. 5 and No. 6 for PortMiami. Each accounts for about 4 percent of total trade.

PortMiami’s No. 1 trade partner, China, accounts for 16 percent of the value of all trade through the downtown seaport. It does not appear among Port Everglades’ top 10. Venezuela, largely because of gasoline imports, is Port Everglades’ top trade partner, accounting for 9 percent of the total. Likewise, it does not appear among PortMiami’s top 10.

All three major ports have at least one top 10 trade partner that does not appear at all in either of the other two’s top 10. For Miami International Airport, it is actually four: Ecuador, Hong Kong, Argentina and Bolivia.

For Port Everglades, it is No. 10 Italy, a large importer of, among other things, expensive yachts. For PortMiami, it is three large export markets for the port, No. 4 El Salvador, No. 7 Panama and No. 8 Haiti.

While South Florida is not without its issues in import-export trade — overall trade for the Customs district is down 4.48 percent through the first nine months of the year, at $85.68 billion — it does not suffer one of the big challenges faced in a number of communities around the country: significant overlap in its trade.

Ken Roberts is founder and president of WorldCity, a Coral Gables-based company that pays attention to globalization’s impact on local communities. He can be reached at kroberts@worldcityweb.com.

Trade for all ports in Miami Customs district

Change in rank

October 2014 YTD

Country

October 2014 YTD

1-year change

1-year change

10-year change

10-year change

  

World Total

$ 96,060,067,396

-$4,242,829,231

-4.23%

$47,789,368,155

99.00%

0

1

Brazil

$ 14,101,400,589

$31,915,265

0.23%

$6,791,145,832

92.90%

0

2

Colombia

$ 7,369,477,294

-$311,031,018

-4.05%

$4,473,823,929

154.50%

1

3

China

$ 5,459,195,502

-$20,966,699

-0.38%

$3,409,959,271

166.40%

-1

4

Costa Rica

$ 4,729,694,984

-$1,866,603,937

-28.30%

$1,786,058,151

60.68%

3

5

Dominican Republic

$ 4,263,331,039

$48,183,248

1.14%

$906,475,847

27.00%

1

6

Chile

$ 4,205,533,731

-$19,448,945

-0.46%

$2,865,436,426

213.82%

-2

7

Venezuela

$ 3,962,481,789

-$779,548,291

-16.44%

$1,474,849,941

59.29%

1

8

Honduras

$ 3,543,741,663

-$162,237,792

-4.38%

$786,276,577

28.51%

-3

9

Peru

$ 2,918,058,968

-$1,470,587,922

-33.51%

$2,015,266,928

223.23%

2

10

Ecuador

$ 2,701,750,728

$411,087,146

17.95%

$1,819,473,696

206.22%

0

11

Argentina

$ 2,241,957,606

-$403,553,680

-15.25%

$1,130,118,830

101.64%

1

12

Guatemala

$ 2,130,389,223

-$109,167,220

-4.87%

$283,916,989

15.38%

3

13

France

$ 2,029,307,391

$197,483,630

10.78%

$1,145,508,453

129.61%

1

14

El Salvador

$ 1,944,203,975

-$153,122,658

-7.30%

$345,515,779

21.61%

16

15

Hong Kong

$ 1,870,827,326

$1,027,054,645

121.72%

$1,651,955,241

754.76%

Source: WorldCity analysis of U.S. Census data

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