Copyright 2003, Traffic World, Inc.
In South Florida, they like to joke that Miami is the closest city to the United States. Miami is closer to Cuba than it is to Atlanta, Dallas or even Jacksonville, and not just in terms of geography. The city is the world''s logistics gateway to Latin America, and its commerce, for better or worse, has a distinctly Latin flavor.
Long the main transit point for trade between North and South America, today Miami is a global crossroads where freight from Europe and Asia as well as the Americas moves through its warehouses and ports. Hong Kong and Italy are among the Port of Miami''s top five trading partners, along with Honduras, Guatemala and Venezuela.
The Port of Miami is the 11th-largest seaport and Miami International Airport is the fifth-largest-cargo airport in the United States. Much of that international traffic comes in trade from across all of Latin America and the Caribbean, from the islands in the warm waters nearby to the large and often troubled economies in South America.
Success as a Latin American gateway for U.S. shippers is helping transform Miami into a global transshipment and logistics center that competes with cities such as Los Angeles, Dallas and Atlanta for freight from Asia and Europe. "There are 63 languages spoken in Miami," said Gary Goldfarb, executive director of Miami-based WTDC, a third-party logistics, warehousing and distribution company.
"Miami truly is an international city. We''ve got the Latin, European and Japanese mentalities combined with U.S. efficiency," he said. Miami also is a working city. "There are a lot of playgrounds here but we don''t see them," said Goldfarb. "They''re for the tourists - we''re too busy."
But Miami''s close ties to Latin America can be a double-edged sword. Latin America''s economic performance has lagged behind the rest of the world in recent years, and the tremors unleashed by the economic collapse in Argentina and Brazil''s financial troubles are felt in South Florida. All the more reason for Miami to diversify and compete with other hubs for Asian and European cargo.
Speaking at the Air Cargo Americas Conference in Miami Oct. 29, UPS Americas Region Manager Steve Flowers noted that trade across the region is flat. UPS Air Cargo recently closed stations in Lima, Peru, and Caracas, Venezuela, pointing to continued pricing problems in a perishables-focused market. "It makes sense to operate where you can make a profit," he said.
Still, Flowers said UPS is committed to Latin America, noting that the regional economy is expected to grow moderately over the next five years. Others see an uptick in exports from Argentina as a good sign. "We''re very pleased with the resurgence in exports from Argentina driven by the revaluation of the peso," said Young. Goldfarb praised Chile. "They''re like one of those mountain railroads - they just keep on going." Overall, whether Latin economies grow depends on U.S. performance, Young said. "The region has been somewhat fragile but, as the U.S. recovers, Latin America will certainly benefit."
Miami will be busier than ever if the proposed Free Trade Agreement for the Americas is adopted. In the works since 1994, the FTAA would eliminate most trade barriers among 34 nations in the Americas, and Miami wants to be the home of the FTAA headquarters, or Secretariat.
The FTAA itself is no sure thing - the collapse of the World Trade Organization talks this year suggested that enthusiasm for sprawling, all-encompassing trade treaties may be waning. But no city may want an agreement more than the lively international bazaar that is something of the unofficial commercial capital for Latin America.
Miami business leaders say gaining the Secretariat would be a significant boost to the city''s global stature. Local officials estimate it would bring tens of thousands of jobs to South Florida and be a boon to ports, airports, shipping lines, air freight forwarders, truckers and logistics companies.
Trade ministers and business leaders from the FTAA countries will meet in Miami Nov. 17-21 for the next round of negotiations at the eighth Summit of the Americas. They are working on a 2005 deadline for completion of the pact, which faces numerous political hurdles in the United States.
A free trade agreement will not just clear obstacles to the flow of commerce in the Americas, it may help U.S. companies fend off competitors from other trading blocs. "There are two major powers affecting our trade with the Americas - China and the European Union," Goldfarb said. "Both are selling in Latin America and hurting our chances there. That''s why we''ve got to have the free trade agreement."
Several other logistics hubs are competing for the FTAA Secretariat but Miami''s history, extensive transportation infrastructure and location give it a unique advantage, said Ron Young, vice president for Latin America at Menlo Worldwide Forwarding. "It''s the logical choice. Miami is an extension of Latin America," he said. "Washington may be synonymous with government, L.A. with entertainment and New York with finance, but for Miami it''s Latin America."
Other parts of Florida are picking up more international business as Miami grows. For example, Orlando International Airport is attracting European cargo that then is trucked to warehousing and cross-shipment facilities in Miami. "We have all those folks to the north, Port Everglades, Fort Lauderdale, Orlando. Orlando is becoming a major airport for trade with Europe," said Goldfarb.
A bit further afield, Savannah, Ga., Corpus Christi, Texas, and Atlanta are among those trying to pull away a little bit of Miami''s Latin American luster.
However, those hubs lack Miami''s volume and facilities, Goldfarb said. "Miami has over 1,300 companies dedicated to international trade and logistics alone - people who move things," he said. "I don''t think you find that anywhere else but New York."
Despite the gains at other gateways, Miami has the transportation infrastructure that attracts importers and exporters.
Miami International Airport is the leading international cargo airport and the third-largest cargo airport in the United States, injecting $18.5 billion into the region''s economy in 2002. The airport has been on an aggressive growth kick in recent years, adding sleek new cargo terminals on the south side and clearing away the older facilities and the crumbling aircraft that were a familiar part of MIA''s colorful aviation scene.
Now, gleaming terminals fill the airfield, complementing big warehouses around the airport that have been built by companies such as Aerofloral that specialize in the particulars of Latin air trade.
"There can be no doubt that Miami International Airport is the No. 1 economic engine for South Florida," Miami-Dade County Mayor Alex Penelas said earlier this year. "The numbers speak for themselves."
For ocean freight, the Port of Miami is the largest container port in Florida, contributing $8 billion to the region''s economy. About 8.7 million tons of cargo moved through the port in 2002, 3.65 million tons of exports and 5.04 million tons of imports. Total TEUs handled by the port reached 980,743 last year, a 2.6 percent increase from 2001.
Latin America accounts for 61 percent of the port''s total volume, but trade with Europe and Asia is increasing.
"There are a lot of options for getting cargo into Miami," Menlo''s Young noted. "There are good ground, air and ocean options. That leads many overseas shippers to maintain inventory here for expedited delivery."
"A lot of European companies have distribution centers here," noted Robert E. Booth, general manager of Cargo Services, a Miami-based freight forwarder and cargo handler. "Companies that used to be based in Panama have relocated to Miami. It''s the capital of Latin America."
After a couple of rough years, Miami''s economy is ready to rebound, says Booth. "Everybody is optimistic and I see a lot of signs of improvement. Our business in 2003 already has exceeded the previous two years, in terms of air cargo."
WTDC expects economic recovery, said Goldfarb. "We see 2004 as a very important year here. The economy is better today than it''s been in the past three years. We see resurgence coming back to Latin America."
Miami will remain the undisputed business capital of Latin America whether it wins the FTAA Secretariat or not, said Matthew Cole, a partner at North Bay Equity Partners, a financial advisory firm that focuses on private equity transactions in Latin America. "There is a concentration of talent, capital and business here that will continue to lead the way in terms of trade and investment."
Copyright 2003, Traffic World, Inc.
More on JOC
- Container Lines
- Trade Lanes
- Short-Sea Shipping
- Maritime Piracy
- International Freight Shipping
- Ships & Shipbuilding
- Longshoreman Labor
- Panama Canal News
- International Ports
- Asian Ports
- European Ports
- Port Equipment
- Port Data & Services
- Port Productivity
- South American Ports
- Terminal Operators
- US Ports
- Inland Ports
- International Rail
- Class I Railroads
- Short Lines and Regional Railroads
- Intermodal Shipping
- Rail Equipment
- Bulk Transport
- Private Trucking Fleets
- LTL Trucking Logistics
- Truckload Freight
- Trucking Freight Brokers
- Dedicated Carriage
- Trucking Equipment
- Trucking Guide 2011
- Trucking Guide 2010
- Express Cargo
- Postal Service News
- Cargo Airlines
- International Air Freight
- Air Cargo Equipment
- Green Supply Chain
- Industrial Real Estate
- Distribution Centers
- Global Sourcing
- Logistics Providers
- Logistics Technology
- Cool Cargoes
- Import and Export Regulations
- Trade Compliance
- Trade Policy
- Transportation Policy
- Customs Regulations
- Transportation Regulations
- Infrastructure News
- Economy Watch
- Trade Data