Shipping and Logistics

PortMiami is aggressively preparing for a brighter future with billions of dollars in major infrastructure projects designed to enhance its competitive position and stimulate the region’s economy.

Two of the projects are already completed:  A $1 billion underwater tunnel that allows trucks to carry containers directly from the port to Interstate 95 without having to travel through downtown Miami, and a Florida East Coast railway connection that allows containers to be loaded directly onto rail cars.   

The third project is the PortMiami Deep Dredge, which is deepening the existing shipping channel from its current 42-foot depth to 50-52 feet in preparation for the 2016 opening of the expanded Panama Canal. When this $150 million dredging project is completed later this year, PortMiami will be the only U.S. port south of Norfolk, Va., that can accommodate the mega-cargo vessels carrying goods for the East Coast through the wider Panama Canal.

To the north, Port Everglades in Fort Lauderdale and Jaxport in Jacksonville are also seeking federal funding to deepen their shipping channels for the larger post-Panamax vessels that will be traversing the Panama Canal. However, their projects are still in the planning stage. Other major deep-water ports along the Atlantic and Gulf coasts, including Houston, New Orleans, Charleston and Philadelphia, also have major expansion projects underway.

The Big Picture

Throughout Florida, port, civic and business leaders are hoping for a favorable return on their port investments, including the creation of more jobs and trade activity throughout the state.  In the post-recession era, the federal government has taken a generally positive attitude toward these infrastructure projects, hoping they will stimulate the nation’s economy. 

However, it is very uncertain whether all these billions of dollars in port improvements – now underway and in the planning stage – will ever deliver the hoped-for results.   

One issue is that there may not be enough shipping demand from Pacific Rim shippers to justify the investments East Coast ports are making.  For the past few years, many U.S. manufacturers have been shifting their operations from China and Southeast Asia to “nearshoring” locations in Latin America or to domestic factories. Their goals include reducing potential supply chain delays and maintaining control over their intellectual property.  As a result, the actual volume of containers transiting the Panama Canal for the U.S. may be lower than originally projected. 

Ports in Florida also face a strategic disadvantage in the race to attract post-Panamax vessels since the Port of Baltimore and the Port of Virginia in Norfolk are much closer to the nation’s heartland. Both ports already have 50-foot channels and the infrastructure needed to accommodate these massive cargo ships.

A Favorable Position

While several Florida ports are hoping to lure the post-Panamax vessels to their communities, it’s clear that PortMiami has a decided competitive advantage. Port Everglades is still awaiting a final report from the U.S. Army Corps of Engineers regarding its dredging project, which would not begin until 2018.  To the north, the Jacksonville Port Authority expects it will take until at least 2020 before the 13-mile channel to JaxPort can be deepened for post-Panamax vessels.

That gives PortMiami a solid head start over other Florida ports in attracting the post-Panamax cargo ships with 13,000 containers – three times the volume of a current vessel.  Since the port is located near the Atlantic Ocean shipping channels, it is anticipated that vessels exiting the Panama Canal will discharge their containers at PortMiami and head back out to sea to return to the Pacific Rim. 

It is also the hope that the arrival of post-Panamax ships will have a significant impact on Miami, including a higher volume of truck and rail traffic. 

Although PortMiami’s new tunnel may remove much of the commercial traffic from downtown streets, there will still be an influx of trucks onto South Florida’s roadways, which may require an additional investment of public and private funds and the creation of additional jobs. The increased volume of containers moving through PortMiami will undoubtedly create new jobs at the port, and in the warehousing, distribution and transportation sectors – as well as the many firms that provide services to the ocean cargo industry. 

Because shipping patterns tend to change only gradually, the investments at PortMiami may give South Florida a sustainable advantage over other post-Panamax deep water ports that come online in the future. 

A Proud Moment

All credit is due to the far-sighted civic and business leaders who obtained the federal, state and private funding needed for these infrastructure projects that position PortMiami to be a leader for many years in the future. 

While the verdict is still out on whether the billions spent will prove to be a great return on investment for Miami, it is still a proud moment to witness Miami be first in line and ahead of the curve to attempt to capitalize on the post-Panamax change rather than being late to the race in an attempt to catch up to a ship that has already sailed. 

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