Florida Ports Partner with Mexican Ports to Expand Global Opportunities
The Florida Chamber of Commerce today attended a Memorandum of Understanding (MOU) signing between Florida Ports and Mexican Ports – an effort that will further strengthen Florida’s competitive edge in the global economy by expanding trade opportunities between Florida and Mexico.
The signing included representatives from: PortMiami, Port Everglades, Port Manatee, Port Panama City, Port Pensacola, Port Tampa Bay, Florida Ports Council, the Consul General of Mexico in Florida as well as Bill Johnson, President and CEO of Enterprise Florida, and Alan Becker, Vice Chair of Enterprise Florida.
The signing took place in Mexico City on the first day of the Florida Chamber’s multi-day economic development trade mission to Mexico. Taking place in coordination with Enterprise Florida, Team Florida also met today with the Governor of the state of Yucatan to discuss international trade partnership opportunities.
Mexico is currently the third largest trading partner for the United States and ranks 10th among Florida’s trading partners, with more than $1.6 billion exported to Mexico in 2015. As such, Mexico provides tremendous growth opportunities for Florida businesses.
Join us for a Global Florida: Trade Topics and Trends webinar on Tuesday, June 7, 2016 at 3:00 p.m. as we discuss trade and logistics in anticipation of the Panama Canal Expansion opening on June 26.
Florida Chamber Embarks on Trade Mission to South Korea and Taiwan
Goal is to Enhance Trade Between Florida and These Important Trading Partners
TALLAHASSEE, FL (April 18, 2016) – To strengthen Florida’s competitive edge in the global economy, the Florida Chamber of Commerce this week is participating in an economic trade mission to South Korea and Taiwan – meeting with international leaders to continue growing trade between Florida and these important trading partners.
While there, David Hart, Executive Vice President for the Florida Chamber, will address dignitaries and business leaders and showcase the Florida marketplace. The trade mission is being led by Enterprise Florida, Inc.
According to Alice Ancona, Director of Global Outreach for the Florida Chamber of Commerce, global trade is big business in Florida. That’s because 95 percent of the world’s consumers, who also hold 80 percent of the global purchasing power, are outside the United States.
“International trade allows Florida companies to reach these consumers and helps our state create jobs and economic opportunity, and remain the global hub for trade and logistics. By joining Enterprise Florida on this Export Development Trade Mission, we are able to share why international matters to Florida,” Ancona said.
The Florida Chamber has remained committed to ensuring Free Trade Agreements (FTA) are in place to help create greater economic opportunities, that includes lobbying in Washington, D.C. for the Korea-U.S. FTA of 2012. Currently, Florida exports more than $702 million in commodities to South Korea, and imports $1.9 billion. Florida also enjoys a unique trade relationship with Taiwan that includes exporting $238 million in commodities.
“Building relationships in emerging and growing global economies is an essential tool for Florida to remain competitive,” said Jim Pyburn, Director of Business Development for Port Everglades. “Here in South Korea and Taiwan, we are getting a hands-on look at just how beneficial these relationships can be.”
Florida’s record investments in transportation and infrastructure make it the ideal place to leverage and grow trade and logistics opportunities. Consider the following:
Florida’s freight system moves 740 million tons of freight annually, including international imports and exports, domestic movements to and from other states, and internal shipments within Florida,
Air Cargo generates 36 percent of Florida’s international trade dollars,
Miami International Airport is number one in the U.S. for international freight, and
Four of Florida’s ports are considered the fastest growing in the U.S.: Miami, Palm Beach, Everglades and JAXPORT.
“International Trade is critical to Florida’s global economy, and our freight infrastructure is a key asset in attracting that trade to our state,” said Doug Wheeler, President and CEO of the Florida Ports Council. “Current investments in upgrades and expansions for our state’s ports and freight corridors will ensure that Florida exports can quickly and efficiently get to countries around the world like South Korea and Taiwan.”
The Florida Chamber of Commerce is the voice of business and the state’s largest federation of employers, chambers of commerce and associations, aggressively representing small and large businesses from every industry and every region. The Florida Chamber works within all branches of government to affect those changes set forth in the annual Florida Business Agenda, and which are seen as critical to secure Florida’s future. The Florida Chamber works closely with its Political Operations and the Florida Chamber Foundation. Visit www.FloridaChamber.com for more information.
The New Suez Canal
With 90 percent of the world’s trade moving by sea, the expanded Suez Canal will be a game changer.
- $8 billion, 44.7 mile extension to the Suez Canal will for the first time allow two-way traffic on the canal
- The new channel allows for a reduction in transit times from 18 to 11 hours
- Provides increased capacity for vessels with drafts over 45 feet (prior to the opening of the new channel, only eight vessels with drafts greater than 45 feet could be accommodated on the canal at any one time)
- The extension to the canal has seen 72 kilometers (44.7 miles) of new canal created, parallel to the current channel. The projected included 35 kilometers (21.7 miles)of dry digging and 37 kilometers (23 miles) of deepening
- The average size of ships on the Far East-U.S. East Coast route via the Suez Canal has increased by 73 percent since 2005 to 7,800 twenty-foot-equivalent units, while vessels on the same trade via the Panama Canal have grown by only 12 percent in capacity to 4,600 TEUs due to size restrictions.
What Does This Mean for the East Coast and Florida?
The Suez Canal has benefited from delays to the Panama Canal expansion as a number of carriers with larger ships in excess of 8,000 TEU ships, have taken advantage of the larger capacities the Suez Canal and have switched to this route. For a brief period during the U.S. West Coast ports disruption, the ratio of Asia-U.S. East Coast through the Suez surpassed those via the Panama Canal. That ratio is now slightly back in Panama’s favor as carriers are preparing for the opening of an expanded Panama Canal.
The Asia-U.S. East Coast route is undergoing a period of dramatic changes based on strong eastbound demand, Beneficial Cargo Owners (BCOs) lack of confidence in West Coast ports, a changed shipping alliance structure and new services have helped boost the Suez route. Drewry, a specialist research and advisory organization for the maritime sector, estimates that extent of cargo shift from the west to east coasts was at 375,000 TEUs between January and June and shows no sign of reducing. U.S. east coast ports have proven to be able to absorb this additional volume with minor disruptions.
The expanded Suez Canal and look forward to continuing to increase its service to the U.S. East coast market, but the degree to which it will increase service will depend on macro events such as how competitive it will remain against an open and expanded Panama Canal in April, Chinese export growth and South East Asian export growth to name a few.
A Tale of Two Canals
The opening of these two expanded Canals within a year of each other will deepen the rivalry between the two, particularly for services connecting Asia with the U.S. East Coast, which is now intensified in light of West Coast – East Coast cargo shift. This is the route where the two canals are in in direct competition with each other.
The new expanded Panama locks, which are due to open in April 2016, will further the rivalry as trade may shift back in favor of an expanded Panama Canal. The Panama Canal’s decision to temporarily reduce its draft from September 8 due to the draught caused by El Nino is not expected to have any significant impact on Far East-U.S. East Coast services, as it will affect less than 20 percent of the transits.
The average size of ships on the Far East-U.S. East Coast route via the Suez Canal has increased by 73 percent since 2005 to 7,800 twenty-foot-equivalent units, while vessels on the same trade via the Panama Canal have only increased by 12 percent in capacity to 4,600 TEUs due to size restrictions.
The opening of the new Panama locks will allow carriers to transit larger ships through the Panama Canal which will position it to recapture some market share lost the Suez Canal since 2008.
The Panama Canal’s share of the Far East-U.S. East Coast trade has decreased from approximately 90 percent before 2008 to a low of 48 percent in 2014 before recovering to 51 percent currently as a result of the recent launch of five new shipping services.
The Panama Canal’s share is expected to increase to over 70 percent by the end of 2016 as most of the Suez market share from China will likely return to the shorter Panama Canal route. Trade from South East Asia is expected to preserve the Suez Canal route as that is the shorter route to the U.S. East Coast.
What Does This Mean for Florida?
The West Coast-East Coast cargo shift occurred earlier than anticipated due to the west coast port disruptions and delays in the opening of an expanded Panama Canal. The Suez Canal has grown in importance to the U.S. East Coast as manufacturing shifts from China to South East Asia have boosted trade to the U.S. via this shorter route. Florida ports have captured some of this shift but opportunities remain to capture more. An expanded Panama Canal will rebalance Asian trade bound for the East Coast in its favor. Florida will have the first U.S. port of entry at 50 ft depth to receive the larger ships by the time the Panama Canal opens. Our ability to capture this trade and demonstrate the strength of our connectivity due to our intermodal investments to increase capacity and connectivity to the larger U.S. market will be crucial to this effort.
Florida ports have experienced cargo growth since the West Coast Ports shut down, as shown in the below news articles:
- Containerized cargo shipments through PortMiami increased 12 percent during the first six months of fiscal 2015.
- Port Everglades’ containerized cargo up 8 percent during half-year
- Diversion from the West Coast Ports drove some of the 20 percent year-over-year gain in Asian traffic that Jaxport saw last year
The above are just a few recent headlines. In order for Florida to continue to remain competitive, continued investment in ports, transportation and logistical infrastructure is key for Florida to remain competitive.
THERE ARE SEVERAL WAYS TO GET INVOLVED:
- Join our legislative “Fly-In” in Washington, D.C. on September 9-10 and lend your voice to our advocacy efforts at the Federal level for these strategic investments in Florida’s future.
- Register today and share your voice with Florida’s transportation infrastructure leaders at the Florida Chamber’s Transportation Summit in December.
- Download and share the Florida Chamber Foundation’s most recent Trade and Logistics study.
Port Everglades may improve customs processing
A new agreement with U.S. Customs and Border Protection could bring more inspectors at peak times
By Arlene Satchell, Sun Sentinel
Customs processing for cruise passengers and cargo shipments at Port Everglades is expected to get a boost under a new agreement with U.S. Customs and Border Protection.
The Fort Lauderdale seaport is one of 16 new partners in a program that allows the private sector and state and local governments to reimburse customs for expanded services to improve inspection times.
Everglades and other ports have struggled for years with issues of inadequate customs staffing as their passenger traffic grows. The new program allows for the addition of custom officers when port traffic surges, such as the arrival of a late cruise ship or when a shipment of perishable goods must be processed during off hours.
“We believe this new U.S. Customs & Border Protection program will be an added value to Port Everglades and our customers,” said Glenn Wiltshire, deputy director.
The port’s customers will be responsible for requesting support and reimbursing the cost of additional services, Wiltshire said. Those customers may include cruise lines, cargo terminal operators and ocean shipping lines.
Port Everglades officials will meet with the customs agency soon to develop specific procedures for implementing the program and developing an agreement that will be brought to Broward County board of commissioners for approval.
Before applying for the program, the seaport polled customers to gauge interest in participating and received positive response, officials said.
South Florida seaports and airports have lobbied for more federal government assistance to ensure their facilities are sufficiently staffed with customs officers as they grow and serve more travel and trade customers.
In February 2013, airport and port officials made their case for more staffing and extended processing hours to Janet Napolitano, then secretary of the Department of Homeland, as she toured customs and security operations at Port Everglades and Miami International Airport.
Last July, MIA became one of the first five government agencies selected to participate in the program. The airport’s operator — Miami-Dade Aviation Department — has said it will spend up to $6 million over five years from its operating budget to pay for additional overtime hours.
At MIA and two other airports included in the program last year, customs has added staff, additional lane openings and automated passport processing technology, which has helped to decrease wait times by an average of nearly 30 percent, the agency said.
Customs is “transforming the way we do business to efficiently process the growing number of travelers each year,” Acting Deputy Commissioner Kevin K. McAleenan said in a statement. “These partnerships allow us to remain a strong global competitor and destination for businesses and travelers.”