Stacks of Crowley and Seaboard Marine containers at Florida East Coast Railway’s Hialeah Rail Yard near Miami are a sign of the volumes South Florida’s ports see coming down their sea lanes when they finish a series of large infrastructure projects over the next few years.
Many of the containers are filled with apparel imports bearing labels such as Hanes, Champion, Playtex, Wonderbra, L’Eggs and Duofold, manufactured in the Caribbean and Central America. On a recent, typically sultry South Florida day, they were being loaded on the Thread Express, an intermodal stacktrain service operated by FEC and CSX Intermodal between the ports of Miami and Port Everglades and a rail hub at Charlotte, N.C.
“We used to move everything over the road and never used rail, because the rails didn’t have time-definite service or a dedicated link into Charlotte, which is a good hub for North Carolina, South Carolina, Georgia and Virginia,” said Scott Munker, vice president of global procurement and logistics for HanesBrands. “The Thread Express took a seven-day rail service that was unpredictable down to two days from Miami to Charlotte.”
HanesBrands now can count on a reliable and consistently shorter lead time between its yarn factories in the Southeast and its textile-manufacturing plants in the Dominican Republic and Central America. “It enabled us to cut costs, save time and reduce our carbon emissions,” Munker said.
The 3-year-old service is a key part of HanesBrand’s clothing supply chain. “We’re probably one of the biggest users, both south and north, of the Thread Express,” Munker said.
Yarn manufactured at plants in the U.S. Southeast is trucked in containers to HanesBrands’ Charlotte hub for loading on CSX, which rails them to Jacksonville for interchange with FEC trains at Hialeah. From there, the containers are trucked to the Port of Miami and Port Everglades for shipment to plants throughout the Caribbean and Central America. This cycle is reversed when the finished garments head northbound to the U.S. and from Charlotte to HanesBrands’ distribution centers throughout the Southeast.
Imagine a future with two deep-water ports and on-dock rail terminals at South Florida’s ports and you’ll understand why Florida’s container shipping industry is so excited by its prospects. “The on-dock terminals will cut as much as half a day off our transit times and further reduce our emissions,” Munker said.
With a 50-foot harbor that will be completed in 2014 and FEC’s on-dock rail connections to the East Coast rail routes of CSX and Norfolk Southern, Miami hopes to steal a march on Charleston and Savannah by grabbing a bigger share of imports from Asia when the Panama Canal opens its new, larger locks in 2015.
About 60 percent of container imports destined for Florida now arrive via intermodal rail from the West Coast and other East Coast ports. With a population of nearly 20 million that is expanding again after the 2008-09 recession halted growth, Florida is expected to surpass New York as the third most populous state by the end of 2013.
That built-in market gives the Florida ports something few others enjoy in the race to attract the mega-ships that will start coming through the canal in a little more than two years: a huge customer base all their own. The South Florida ports want to leverage that “home-field advantage” by attracting cargo for the fast-growing markets in Georgia and the Carolinas, where the ports of Savannah and Charleston dominate.
Miami officials say that if they can attract more first calls by inbound ships, their port also can recapture some of the transshipment trade that has largely moved to deep-water Caribbean hubs.
“We can deliver cargo to destinations throughout the Southeast before a ship ever gets to another East Coast port and gets unloaded,” Florida East Coast CEO Jim Hertwig said in an interview aboard one of FEC’s two private railcars on a recent trip from Jacksonville to the Hialeah Rail Yard.
FEC, he said, can deliver cargo efficiently to 70 percent of the U.S. population. “We can deliver cargo from the ports overnight anywhere in the state of Florida and to Atlanta in two days, to Charlotte in two days, Memphis in three days and Nashville in three days,” Hertwig said.
He said the faster time-to-market would lead shippers to ask their ocean carriers to drop their cargo bound to and from Florida and the Southeast at one of the South Florida ports. He said carriers would benefit from reduced slot costs provided by post-Panamax ships that can avoid another call at a Caribbean transshipment hub.
Miami, the East Coast’s fifth-largest container port, is already the first port call on three inbound services from the Far East. Miami and Port Everglades, the East Coast’s seventh-largest container port, also have a strong presence in the north-south trades with the Caribbean, South and Central America.
Intermodal rail plays a key role in both ports’ plans to become gateways for the booming Florida market and for markets in the Southeast. Both ports are involved in public-private partnerships with FEC to build on-dock rail terminals where containers can be switched directly onto the railroad’s trunk line to and from Jacksonville for interchange with CSX and Norfolk Southern trains to destinations throughout the Southeast.
Miami has all the permits it needs for the Army Corps of Engineers to begin dredging its entrance channel to a depth of 50 feet this fall. It also has the funding from state and local sources. Gov. Rick Scott redirected $77 million in state Department of Transportation funding last year to cover the federal share of the $180 million project until Washington reimburses the state. The state already had committed $37.5 million toward the project, and Miami-Dade County committed another $37.5 million.
When dredging is completed in the fourth quarter of 2014, Miami will be one of only four U.S. East Coast ports with harbors that deep. The others are Virginia, Baltimore and New York-New Jersey, which still will be trying to raise the vertical clearance of the Bayonne Bridge when 11,000-TEU ships start coming through the Panama Canal in late 2014.
“As ships get bigger and bigger, there are fewer ports where they can make a first inbound call,” port consultant John Martin said. “Carriers that call Miami first can unload cargo for the FEC’s Hialeah distribution center, just like the cargo that comes to Florida now comes from Savannah or the West Coast.”
Miami’s deeper draft also could become the last outbound call by ships returning to Asia, he said, because its deeper harbor would enable them to load heavier export containers, particularly kaolin clay, forest products and high-value agricultural products and frozen poultry that the FEC will be able to transport right to its docks.
The Port of Miami also aims to speed up truck traffic, which currently must cross a bridge and thread its way through the city’s congested streets to I-95. The port is digging a four-lane tunnel under Biscayne Bay and Miami’s streets that will carry trucks onto the interstate system in four minutes.
Port Everglades also wants to widen and deepen its harbor to 50 feet, but it’s just beginning to work with the Corps of Engineers to get the permits and funding for a project that likely won’t be completed for at least eight years. It’s also working on lengthening the existing deep-water turn-around area from 900 to 2,400 feet, which will provide room for five new berths.
To prepare for the container volumes it thinks these port-deepening projects will draw, FEC is working on several new infrastructure projects. With the help of a U.S. TIGER Grant and state and local funding, it’s rehabilitating the hurricane-damaged bascule rail bridge that will carry trains directly to the new on-dock intermodal container facility it’s building at the Port of Miami, which is on an island off the tip of South Beach in Biscayne Bay. FEC trains currently can only go as far as American Airlines Arena, where the Miami Heat plays its home games.
FEC also is building a new intermodal container transfer facility near Port Everglades that will have a $42 million highway flyover to carry trains directly onto the port’s railyard.
It also plans a new logistics center for warehouses and distribution centers on 30 acres at the railroad’s South Florida Logistics Yard, between Miami International Airport and the Hialeah railyards. The logistics yard will include a transload facility where the FEC will strip the import containers it hauls from the two South Florida ports and load their contents into 53-foot domestic containers that it will transport north to Southeast markets.
“We have three 53-foot domestic intermodal containers and trailers coming down our railroad for delivery in South Florida for every one domestic container going north,” Hertwig said. “There’s not a lot of backhaul business going out of South Florida, so those 53-foot domestic containers are coming back up north on our railroad empty. Carriers that want to move their container equipment back to China as fast as they can don’t necessarily want their ocean boxes going into the Atlantas and the Memphises and the Nashvilles because they have to reposition them back to the ports.”