With the Panama Canal expansion now operational for about six months, the two largest seaports in the US state of Florida are eager for more large container ships to arrive, particularly those serving the Asia-US trade lane.

“We’re very happy,” says Juan Kuryla, director and CEO of the Port of Miami. “We’ve seen many post-Panamax vessels calling at Miami on a weekly basis. On July 9, we were able to welcome MOL Majesty, the first US-bound cargo vessel that could not have gone through the old locks. From our end, the canal expansion is very welcome. I would say that, over the next six to nine months, we can expect vessels in the range of 8,000-12,000 TEUs to arrive at Miami.”

Located less than 40 kilometres away, Port Everglades is a few years into its 20-year plan involving US$1.6 billion of investment which will improve its handling capabilities. The project includes the deepening and widening of the harbour, five new berths, six Super-Post-Panamax cranes and the expansion of the port’s turning basin.

In preparation for the expansion, the port cultivated 16.5 acres of nursery-grown mangroves on a piece of land that was intended for other purposes. It received approval from the Florida Department of Environmental Protection in November 2016 to excavate 8.7 acres of an existing mangrove conservation easement, clearing the way for construction to begin in 2017.

“We too anticipate enhanced volumes coming through, but more immediately from South America,” says Jim Pyburn, director of business development at Port Everglades. “We’re not looking at the large ships that Miami is looking at until our infrastructure project is completed, but even then we don’t anticipate doing anything larger than a 10,000 TEU vessel.”

The Port of Miami and Port Everglades are both served by the Florida East Coast Railway, which operates on-dock intermodal facilities at the two ports on a public-private-partnership basis.

“We have plenty of capacity,” says Jim Hertwig, president and CEO of the FECR. “The benefit of Asian cargo coming into South Florida is the fact that domestically, there is no freight going to Miami. So the Asian cargo which is more imports than exports mixes very well with the opportunity. We see a lot of trans-loading occurring where they load that cargo onto 40-footers and 53-footers. They don’t have to worry about sending their 40-foot containers inland and the cost to reposition them.”

The railway is in the process of transferring from using diesel as a locomotive fuel to using liquefied natural gas. When the process is completed in 2017, it will be the only railroad in the country to use LNG for its entire mainline.

“In terms of capacity, we’re right now at 60%, but we’re already running the extra capacity for the cargo that we’re going to get, in the form of empty units going north on our railroad,” Hertwig says. “We’re well positioned to handle the additional growth at both ports.”

The Port of Miami, which finished its US$1.3 billion dredging project in 2015, now has 13 Post-Panamax cranes, six of which are Super-Post-Panamax. The next step, according to Kuryla, is to focus on improving operations at the two terminals that handle the global carriers.

“We’re in conversations with both of them to invest quite a bit of money to develop a rubber-tyred gantry system so we can store more containers and move them faster through the yards, ultimately improving the experience of the truckers and the lines,” he says. “That will probably be another PPP, in the range of US$80-100 million.”

Despite the proximity of the two ports, Kuryla points out that the Port of Miami doesn’t think of Port Everglades as a competitor.

“There’s plenty of cargo to go around the two ports,” he says. “What’s interesting is that over 50% of the products that are consumed in the state of Florida do not come via Florida ports. They come through Savannah and LA or Long Beach. I’m not one to be shy to tell you that that’s the cargo that we want. We want to bring some of that through Miami and some of that through Port Everglades, put it on the FECR, and then dispatch that cargo to its final destination.”

For Hertwig, there is a compelling case to use either of the two ports when one looks at the costs.

“Let’s say the difference in the ocean rates to South Florida versus LA or Long Beach is about US$500,” he says. “There’s no way you can run a container on a railroad from California to Atlanta for US$500. It’s going to be more like US$2,000. For us to move it to Atlanta, it’s all backhaul. So you get economic value by going into Miami. Granted, the transit time may be a little bit longer, but our customers input that into their supply chain modelling and you clearly can add four or five more days.”

Collectively, the three entities are all working together to sell South Florida as a region to shippers and ocean carriers.

“If you look at Savannah, it has a population of about 150,000, versus the 8 million in South Florida and the 7 million in Central Florida,” says Pyburn. “The populations obviously speak for themselves. We’re the two largest ports in the state, out of all 14 deepwater ports. There’s enough cargo for all of us. In fact, Port Everglades is space-constrained, so we can only handle so much more until we make those infrastructural improvements. We’re not getting greedy – we’re being realistic and we’re not cannibalizing each other’s business.”

Kuryla stresses that the Port of Miami and Port Everglades each have their own strengths and weaknesses, and that when a potential new customer requests a bid, he and his team will naturally put their best foot forward.

“Of course we’re going to offer incredible customer service and very competitive rates, but I’m not looking over the fence to see who’s over on Jim’s side to try to bring them to Miami,” he says. “We just don’t do that.”

By Jeffrey Lee

Asia Cargo News | Shenzhen