Flowers, of UPS, with Southwell of MIA, and Johnson from the seaport

Trade off today but better days lie ahead, say MIA, port, UPS

A brighter day is coming for Miami’s import-export community — it’s just not today.

That was the word from top officials with Miami International Airport and the Port of Miami, who spoke at WorldCity’s quarterly Trade Connections event this week about a signficant confluence of events and infrastructure projects, funded both by government and the private sector, that should position South Florida well when they are all online within the next four to five years.

Port Director Bill Johnson

Miguel Southwell, deputy aviation director at MIA, and Port of Miami Director Bill Johnson were joined on the panel by Steve Flowers, who oversees Latin America, the Caribbean and Canada for UPS.

The projects that Southwell and Johnson described include significant increases in cargo space on the MIA airfield, for temporary storage between off-loading and movement to warehouses in Doral or elsewhere; dredging of the channel at the seaport; and construction of an underwater tunnel at the port.

Today, however, trade is down significantly from a year ago in South Florida, as it is across the nation and around the world, according to WorldCity trade data analysis.

Through the first seven months of the year, South Florida trade is off $7.8 billion, or 15.1 percent, to $43.9 million. Top 100 South Florida Trade Partners The total is also slightly lower than the total through July of 2007, the previous year, but slightly more than the total through July 2006. Some Customs districts around the country have seen their numbers fall even more drastically, erasing more years of gains.

South Florida exports to the world have fared better that overall trade, and are off 10.37 percent while imports are down 22.23 percent. The biggest decreases in trade are with No. 1 Brazil, No. 3 Venezuela and No. 5 China.

The Miami Customs district, which stretches from Palm Beach to the north to the Florida Keys in the south, was the No. 12-ranked Customs district in the nation through July.

Looking at monthly, rather than year-to-date data, trade just for the month of July was off 17.48 percent from the previous July, historically dismal but quite a bit better than the U.S. average decrease of 30.36 percent, which is truly unprecedented. When comparing the month of July 2009 to the month of June 2009, South Florida trade increased 2.86 percent. That is slightly lower than the national average gain of 3.33 percent. Monthly data: How Miami compares

For the airport and seaport, that means tonnage is off about 15-18 percent year over year, according to Southwell, and TEUs at the seaport will likely end the fiscal year on Sept. 30 below 900,000 and a ways from the 1 million TEU mark surpassed several years ago. In the case of the seaport, some of the loss in TEUs is the fall in transshipment business, which has fallen from 22 percent of all business to 2 percent since restrictions went into place after the Sept. 11, 2001 terrorist strikes.

UPS has suffered from decreases as well but some of that is masked by a reduction in the type of delivery — from express to ground, from air to ocean — to save money.

The good news for those assembled at Trade Connections is that all three indicated some improvement lately — and the trade data reflects that, with the most recent data, for July, the strongest of the year. For Flowers, representing UPS, the questions is a simple one. “Is it simply restocking (depleted inventories) or is it sustainable?”

For Southwell, the improvements include the construction of two cargo facilities on airport grounds, one at the southwest corner of NW 36th Street and LeJeune Boulevard and one closer to existing American Airlines space. Once the projects are completed, MIA should have an additional 800,000-1,000,000 square feet of space.

The airport is not currently utilizing what it has, and tonnage will probably end up at about 1.7 million tons, down from almost 2 million the previous fiscal year, so the challenge will be to attract additional volume in a competitive market, competition that is the most intense from Atlanta and Houston.

Miguel Southwell, MIA deputy aviation director

“There is a lot of confidence we are seeing from the airlines,” Southwell said. In an earlier conversaton, he spoke of the increased Asian traffic, with the addition of Cathay Pacific from Hong Kong and China, and the increased schedule of Korean Air.

The airport is also building a new fumigation facility. MIA is the nation’s leading airport for perishable imports, given its proximity to produce growers in Central America, flower growers in Colombia and Ecuador, and fish importers from Chile.

But landing costs at the airport make competing a challenge, Southwell said.

The cost to land a passenger at MIA — landing costs provide the funding to run the airport — is about $17, Southwell said. “In Atlanta it’s about $4. In Fort Lauderdale, it’s about $4. It’s about $5-$6 in Houston.”

Steve Flowers of UPS

Improvements to the airport matter, said Flowers of UPS. “As a user, the expansion of the fourth runway … allows UPS to get in and out on time.”

At the seaport, the dredging of the channel to 50 feet, making it only the third on the Eastern Seaboard after Norfolk and New York, and the $2 billion, four-lane tunnel under Biscayne Bay on the north side of port facility, create a great opportunity, given the projected opening of the expanded Panama Canal in 2014.

Gaining the right to dredge to 50 feet was “like winning the World Series 10 years in a row,” Johnson said, something no Major League team has actually ever done.

Many of the larger ships that will be able to traverse the widened canal — so-called post-PANAMAX vessels — will require the extra depth that the Port of Miami will have to offer. The tunnel is important to help elivate or at least limit truck traffic through downtown Miami, where an increasing number of people are living.

In addition, the port hopes to increase use of rail to a new yard in Hialeah and is working the Florida East Coast Railroad on a plan.

All these changes combined will allow the port to double its container traffic to 2 million TEUs within 10 years, Johnson said.