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Gov. Rick Scott has lofty goals for Florida ports

As he stiff-armed the Obama administration's offer of $2.4 billion for high-speed rail, Gov. Rick Scott embraced a far less sexy alternative: lumbering cargo ships.

He steered $77 million to Miami for a deeper shipping channel. He pledged to support improvements to make Jacksonville's port a global player. And Scott repeated again and again a goal that has some maritime experts scratching their heads, a goal to make Florida ...

''The shipping capital of the East Coast, if not the nation."

Florida boasts 14 ports from Key West to Pensacola. But as far as cargo moved in steel containers — the way most consumer goods move over water today — their combined traffic last year didn't reach the volume at Savannah, Ga. And Savannah is only No. 4 nationally, handling a little more than half the volume of New York, which is No. 1 on the East Coast.

Mark Vitner, a Wells Fargo senior economist who tracks Florida business, misheard a reporter's question about Scott's grand goal. "Sports capital of the East Coast?" he asked.

No, ports capital.

"They'd have a better chance," he quipped, "of becoming the sports capital."

Yet there is more than big talk behind Scott's idea.

In ignoring the promise of high-speed rail, he has zeroed in on what the research arm of the Florida Chamber of Commerce calls a "once-in-a-generation opportunity to fundamentally transform" the state's economy.

Indeed, the 2010 Chamber report goes Scott one better, mottowise, suggesting Florida might "become the Singapore of the Western Hemisphere.''

Singapore has promoted itself as the world's busiest container port.

Scott has offered few specifics beyond what he said on Feb. 16 in rejecting the federal rail money:

"Rather than investing in a high-risk rail project," Scott said, Florida would focus on profiting from "the increased shipping that will result when the Panama Canal is expanded, when the free-trade agreements with Colombia and Panama are ratified and with the expansion of the economies of Central and South America."

"By capturing a larger share of containerized imports entering our seaports, expanding export markets for Florida businesses and emerging as a global hub for trade and investment, we can create up to an additional 143,000 jobs according to a recent Chamber of Commerce study.''

The statement was about the only time Scott did not repeat his goal of making Florida the ''shipping capital of the East Coast." But it has become a mantra, repeated most recently during his visit to the Port of Tampa on May 25.

So any evaluation of Scott's aims must contain two parts: Can Florida really be a shipping capital? More broadly, what are the state's prospects as a "global hub for trade and investment?"

• • •

Robert W. Poole of the Reason Foundation, a libertarian think tank, served on Scott's transition team and oversaw a report that provided justification for killing high-speed rail. He backs the governor's decision to spend millions on the Miami dredging project.

But making Florida a shipping Goliath like New York?

"A huge exaggeration," Poole said.

Observers say Scott was influenced by the chamber report, delivered just seven months ago. That report includes the notion of Florida as "a global hub" for trade and investment.

Florida Chamber Foundation president Dale Brill suggested Scott's pledge was an ''aspirational goal."

"It may not happen in his administration," Brill said. "He has a vision for Florida that is beyond limitations some people perceive as a given."

Scott did not respond to the Times' requests for an interview. Spokesman Brian Burgess said that "this is a long-term project that will take many years."

And it won't be easy.

• • •

Although the state is surrounded by water, Florida faces serious challenges to growing its port business.

Geography tops the list.

A port's container traffic is driven by the size of its regional consumer market, unless containers can easily be moved inland to other markets.

But at the southern tip of the state, ports in Miami and Fort Lauderdale are too far from rail lines to supply the rest of Florida and the Southeast, Poole said. Strong currents in part of the shipping channel in Jacksonville, the state's biggest container port in 2010, prevent the largest ships from passing through most of each day.

Florida also lacks the huge retail distribution centers clustered around Atlanta and fed by Savannah's port. "Atlanta is the distribution hub of the Southeast," Vitner said. "Florida doesn't have anything that rivals it."

In fact, more than half of the Florida-bound containers from Asia enter the country at ports outside Florida.

Contributing to that problem: Once goods arrive at a Florida port, their movement further inland is often constrained by poor road connections and limited rail access. Miami has secured grants for on-dock rail and is working to connect to the Florida East Coast Railway, said assistant port director Kevin Lynskey.

• • •

A potential game-changer looms in 2014.

That's when a $5 billion widening of the Panama Canal will be finished, allowing huge "post Panamax" ships to pass through for the first time. Such vessels can carry as many as 12,000 containers, stuffed mostly with consumer goods made in Asia.

These ships need water that is at least 50 feet deep to enter a port. With the state money in hand and digging expected to start next summer, Miami promotes itself as the only East Coast port south of Norfolk, Va., that will be deep enough for the big ships in 2014. Savannah might not be ready until 2016.

Those ships could not navigate the 43-foot-deep shipping channel to the Port of Tampa, and its fledgling container operation could not handle that many boxes at one time.

But having a deep channel doesn't guarantee the big ships will come.

The post Panamax ships are expensive to run and won't stop at more than two or three East Coast ports, said Steve Ellis of Taxpayers for Common Sense. The group opposes federal funding for dredging multiple ports to 50 feet.

"It's not like these ships are going to bounce up the East Coast," he said. Experts say the Port of New York/New Jersey, which feeds the nation's largest consumer market, is a given. Norfolk, Va., with established rail connections to the Midwest, is another logical choice.

That leaves room for one port in the Southeast, Ellis said. Shipping companies told authors of the chamber report that Savannah will keep its advantage over Florida ports because of the heavy concentration of distribution centers in the vicinity.

Asaf Ashar, head of the National Ports and Waterways Institute's Washington, D.C., office said Scott is "obviously wrong" if he thinks Miami, traditionally the state's top container port, will catch the East Coast's giants.

"I do not see how Miami could surpass New York or even the second-tier ports such as Savannah/Norfolk/Charleston," he wrote in an e-mail.

• • •

But Scott has not put all his eggs in the Panama Canal basket.

He regularly points to the pending trade agreements with Panama and Colombia and the ever-growing market in Latin America.

The trade agreements, currently hung up in Congress, would lower tariffs and other barriers for U.S. exports. Even without them, according to an Enterprise Florida study, the state does almost $10 billion worth of trade with the two countries. If the agreements are approved, the total value of imports and exports would grow by almost $700 million and create more than 8,000 jobs.

Latin America generally has experienced torrid growth in recent years, a trend economists expect to continue.

Here, geography favors Florida. The state already handles more than a third of all U.S. trade with Central and South America. Improving its ports, as the Chamber report notes, would maximize the potential of these well-established trading lanes.

The Panama Canal could bring a jolt of new business, said Doug Wheeler, president of the Florida Ports Council. "Central and South America will be more sure and steady growth as their economies grow," he said.

• • •

Florida's trade and logistics industry employed 531,000 people in 2009, according to the chamber report. That represented about 7 percent of all jobs in the state. The average wage was $54,714 a year, 29 percent more than the state average.

For years, port directors and lobbyists touted these kinds of numbers as they pushed in Tallahassee for money to rebuild crumbling infrastructure. It wasn't always an easy sell.

Gov. Charlie Crist's staff didn't show much interest in funding port improvements, Wheeler said. "Ports aren't really the sexy industry that some others are."

But they found a friend in the new governor. Scott embraced the chamber report and was visiting ports even before taking office.

He went on a trade mission to Panama with most of the state's port directors in the first week of May, and in October he plans to join business leaders on a trip to Brazil.

Nancy Leikauf, who heads the Port Council's lobbying efforts in Tallahassee, turned almost giddy about a month ago when a secretary at the governor's office put her call on hold.

Scott's recorded voice promoted Florida's ports and the state's "huge potential" for increased trade.

"We're thrilled with the level of dialogue about ports," Wheeler said. "It's through the roof."

Times staff writer Michael Bender contributed to this report. Contact Steve Huettel at huettel@sptimes.com or (813) 226-3384.

Florida 's Top 10 merchandise trading partners in 2010

1. Brazil: $15.9 billion

2. Colombia: $7.6 billion

3. China: $7.4 billion

4. Japan: $6 billion

5. Switzerland $5.5 billion

6. Venezuela: $5.4 billion

7. Chile: $5.4 billion

8. Costa Rica: $5 billion

9. Dominican Republic: $4.9 billion

10. Mexico: $4.2 billion

Source: Enterprise Florida

Gov. Scott's vision for Florida ports

"We should be the shipping capital for the East Coast."

Scott, to the Associated Industries of Florida board meeting, March 7

"In this state, we should be the shipping capital for clearly the East Coast, if not the entire United States."

Scott, to Jacksonville Regional Chamber of Commerce, March 11

"This is more important now than ever, since we have committed to expanding Florida's ports to bolster Florida's position as the Gateway to South America and the shipping capital of the East Coast, and possibly the nation."

Scott, applauding advance in negotiations on trade agreement with Colombia, April 7

"We will open the doors of opportunity for foreign trade. This is one area we can win at. We will be a shipping capital of the East Coast, if not the United States.''

Scott at Port of Tampa press conference, May 24

Gov. Rick Scott has lofty goals for Florida ports 06/03/11 [Last modified: Saturday, February 18, 2012 12:28pm]
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