Ports in the state of Florida are looking to develop their gateways as a transhipment hub for e-commerce coming from Asia and the US to Central and South America, citing the strategic location of the ports and the growing demand for online purchases.
Eric Olafson, director for global trade and business initiatives at the Port of Miami, who also represents the Florida Ports Council (FPC), said e-commerce heavyweight Amazon has already established warehouses in various parts of Florida to serve both the domestic market, as well as customers in Latin America.
Retail giants Walmart and COSTCO and tech company Apple also have warehouses in Florida. The ports have also held talks with Chinese B2C e-commerce company JD.com and B2B giant Alibaba.
“The idea is to be able to become the e-commerce transhipment provider not only for the southern United States, but for all of Latin America as well,” Olafson said, noting that warehouses are usually built close to the consumers.
Florida is the third-most populous US state, with 147 million combined residents and visitors.
“We believe that not only can Asia send their products to Florida, [but] Florida can serve as a sort of e-commerce hub for all of Latin America so Asian products will come here – maybe cell phones, electronics, furniture, and then from Florida we can serve the US domestic market and Latin America market,” Olafson told Asia Cargo News in an interview.
Currently, Olafson said the contribution from e-commerce is “still quite small” at around 5% of total volumes at Florida ports – Canaveral, Everglades, Fernandina, Fort Piece, JAXPORT, Key West, Manatee, Miami, Palm Beach, Panama City, Pensacola, Port St. Joe, St. Petersburg and Tampa Bay – but “it has the potential to grow to 40%.”
“That’s the future, everything’s going to be e-commerce,” Olafson added. “We’re going to see a lot of e-commerce coming in from Asia to the United States. We have the warehouses, we have Apple, we have Amazon, we have the Walmart warehouses that come in and ship it down to South America.”
In the state of Florida, there are over 120 foreign trade zones, and many take product from Asia. In Miami alone, he said, there are 81 foreign trade zones.
“I see tires and air conditioners. They come into the foreign trade zone, and they’re re-exported to the Caribbean, Central and South America. Some states in the United States also do some re-exporting as well. So, we continue to want to grow that gateway status.”
It takes around two days for goods to reach Mexico from Florida, three days to Costa Rica and approximately four days to Colombia and Ecuador.
“It makes sense to use Miami, Port Everglades, Tampa and Jacksonville as gateways because we have so much service to South America coming back and forth,” Olafson said. “They can come to Florida ports, pick up all the products and then put it on feeder ships going to Latin America, using us as a gateway,” he added.
Anticipating the growing role of Florida gateways in e-commerce, Olafson said several warehousing projects are already in the pipeline with investments from both the public and the private sector.
The US government, for example, is slated to spend some US$92 million in grants to build warehouses with refrigeration and fumigation; a final decision on the grants is expected to be announced in December.
“I think you’ll see that once the federal government puts in $92 million, everyone else will put in at least a 50% share. So, we’re planning to spend millions – all the ports are planning to spend millions, especially in warehousing and refrigeration,” he added.
Also, as part of its efforts to turn Florida into an e-commerce transhipment hub, Olafson said the Port of Miami, in particular, has already started forging pre-clearance agreements with Central and South American countries to facilitate faster, smoother trade between each other.
“E-commerce is exploding right now in the United States and we’ve already signed a pre-clearance agreement with Brazil to allow us to [bring] electronics and products from all over the world to Miami and send them to Brazil,” he said.
“We’re working with the Colombian government for pre-clearance too, we also had meetings with Mexico to be able to have this agreement,” he added, noting that the Port of Miami is also looking at similar pre-clearance deals with Peru, Argentina, Chile, Paraguay and Panama.
Pre-clearance would allow products to be inspected at the Port of Miami with customs duties to pay in advance to cut the handling time for shipments.
By Charlee Delavin
Asia Cargo News | Hong Kong