Florida: Gateway to the Americas

“It’s a perennial joke that Miami is the only South American capital located in North America,” says Bunny Schreiber, marketing specialist/cargo at Miami International Airport.

But it’s no joke when you consider the volume of cargo that passes between Florida and South America, along with Central America and the Caribbean; the numbers of business transactions conducted in the state involving one or more Latin American companies; and the legions of Florida-based service providers with expertise in Latin American trade.

“They say geography is destiny, and if that’s the case, we’re destined to be the center of the Western Hemisphere,” says Manny Mencia, senior vice president, international business development at the economic development organization, Enterprise Florida. “If you look at the map, Miami is closer to most major cities of the Western Hemisphere than even Mexico City.”

That geographic advantage translates into vast volumes of international trade. “Among U.S. states, Florida is the number-one trading partner of every nation in Latin America and the Caribbean except Mexico,” Mencia says. Of goods shipped in both directions between the United States and Central America, 55 percent of the traffic passes through Florida. The state also handles 44 percent of U.S. cargo bound for or arriving from the Caribbean and 30 percent of the trade with South America.

Looking at exports alone, the numbers are even more impressive: Florida handles 53 percent of all U.S. exports to Central America, 48.6 percent of exports to the Caribbean, and 43 percent of exports to South America.

The large Latin presence in Florida also makes the state an ideal base for doing business with companies located anywhere from Guatemala and Belize to Argentina and Chile.

“One of the great advantages you have here is a population that is truly representative of the Americas,” Mencia says.

The state’s distributors, trading companies, purchasing agents, consolidators, and other service providers employ professionals who speak Spanish and Portuguese and who know the ins and outs of doing business with their ancestral homes. So tight are the ties with Florida that a candidate running for president of a Latin American nation always schedules at least one campaign stop in the state, he says.

“You can’t minimize the importance of these personal relationships,” Mencia says. “Florida-based Colombians do business with Colombia. There is a large Brazilian community, with a lot of entrepreneurs doing business with Brazil. Venezuelans, Argentines, Central Americans—you have a community and a region, as a state, that is closely linked to those countries and knows what’s happening.”

The state’s transportation service providers include 300 Customs brokers and more than 1,000 freight forwarders in South Florida alone. “We have the largest concentration of international service support specialists anywhere in the world, if the orientation toward Latin America and the Caribbean is taken into consideration,” Mencia says.

Add to that 35 binational chambers of commerce, 22 foreign trade offices and 55 consulates representing countries throughout the world, including every nation in Latin America and the Caribbean. “All these together also provide a valuable infrastructure,” Mencia adds.

The Miami Factor

While Miami is the center for Pan-American trade, businesses throughout Florida profit from that southern city’s magnetic pull.

“It’s known anywhere in Latin America or the Caribbean that if you want anything in the United States, go to Miami first,” says Ed Kostenski, president of Nationwide Equipment Co., based in Jacksonville. “As a Florida company, we get a ride on the wings of that Miami business.”

Nationwide buys, refurbishes, and resells heavy construction equipment. Exports account for 60 to 70 percent of its business, and a big portion of those exports go to Latin America. Customers from Central and South America visit Jacksonville to do business in person “all the time,” Kostenski says.

“They come to Miami anyway, and because we’re in Florida, it’s not a real hardship for them to drive up here, or take a short 45-minute flight,” he says. “I call it the Miami Factor. A lot of them have family here. They’ve been in and out of Miami dozens of times. It doesn’t bother them,” he says.

The concentration of service providers in Miami, and the sheer volume of traffic in and out of its seaport, is also a boon to the Jacksonville firm, which ships through that and several other Florida ports.

“Because of that business, we get a ride on the feeder services into the Caribbean, to South America,” Kostenski says. “We’re able to move our heavy equipment down there and piggyback it on their ships for a relatively good price.”

Recent state administrations have offered strong support to businesses such as Nationwide, says Kostenski. Current governor Jeb Bush and former governor Bob Martinez “were the most pro-export governors the state has seen in the last 25 years,” he says. “And the Florida District Export Council provides valuable assistance.”

34 Ports of Entry

Along with its “soft” infrastructure of service providers and business advisors, Florida boasts a formidable array of transportation and logistics facilities. International shippers move goods through 14 deepwater ports in the state and 20 airports that provide international and/or commercial service. The busiest of these airports is Miami International.

In 2003, 1.81 million tons of cargo passed through Miami International Airport, Schreiber notes. Seventy-three percent of Miami’s imported cargo consists of perishable goods such as fresh fruit, vegetables, fish, and flowers, much of it arriving from producers in Central and South America.

Tenants such as American Airlines and Lan Chile maintain a total of 172,000 square feet of refrigerated storage space on the airport. “Additionally, almost half a million square feet is available outside the airport,” Schreiber says.

With all that cargo passing through, visitors are often astonished to find these chilled warehouses empty. Efficient handling puts perishables on the road almost as soon as they arrive. “The flights come in by 4:00; by 8:00 they’re unloaded and have cleared Customs and Agriculture, and then they’re on trucks bound north,” Schreiber explains.

The top import commodities at Miami International are fish, flowers, and fruit. Top exports include computers and peripherals, oil and gas drilling machinery, telecommunications equipment, and industrial machines.

One company speeding cargo through Miami is AmeriJet International, an all-cargo airline that offers service to and from the Caribbean, Mexico, Central America, and parts of South America. Along with flying its own aircraft, AmeriJet provides ground transportation through a network of trucking companies under exclusive contract. Last year, it added ocean service through its acquisition of ITN Consolidators, a non-vessel- operating common carrier (NVOCC).

Headquartered in Fort Lauderdale, AmeriJet operates a 210,000-square-foot, cross-docking facility at its hub at Miami International, which includes 10,000 square feet of refrigerated space. It maintains drop stations in Jacksonville, Orlando, and Tampa, where shippers can deliver freight for forwarding to Miami, or where they can receive freight if they don’t opt for door-to-door service.

It also offers services that shippers might not find elsewhere. “Because we are all-cargo, AmeriJet specializes in cargo that not many carriers will take nowadays,” says Frank Gumina, the company’s senior director of national accounts. These include explosives and other hazardous materials, as well as machinery used in the oil industry in countries such as Venezuela and Mexico.

“We’re one of the few carriers that do not hesitate to take that cargo. As long as it fits on our aircraft, and as long as it’s done safely, we will put it on our planes,” he says. The company also handles live animals, hatching eggs, and a variety of perishables, such as fresh fruit and flowers.

AmeriJet is one of 92 cargo and passenger airlines operating at Miami International. Taken together, these carriers provide “such an extensive network with South America that it’s almost unbelievable,” Schreiber notes.

With so many flights available, many business executives in Latin America find Miami the most convenient place to conduct business with partners from other nations.

“If an Argentinean is going to meet with someone from Lima, Peru, chances are they will both fly to Miami to meet,” Schreiber says. Easy access and cultural affinity make Florida a magnet for the movers and shakers of Central and South America, many of whom own second homes in the state, says Mencia.

“They participate in our conferences and in our local gatherings,” he says.

For companies located in Florida, “the ability to talk to those people and get the real scoop on what’s going on, either economically or politically—in other words, access to market intelligence—is tremendous.”

Seaport Volume on the Rise

Florida’s 14 deepwater seaports handled more than 118 million tons of imported and exported goods, worth more than $46 billion, in 2003. The Florida Seaports Council predicts that volume will rise to 138 million tons in fiscal year 2007-2008.

With 50 million tons of cargo passing over its docks each year, the Port of Tampa is the state’s largest seaport by volume. Among the commodities that moved through Tampa last year were citrus concentrate from Brazil, phosphatic chemical bound for Chile, and petroleum products from Venezuela.

Traditionally a bulk port, Tampa has been working hard to diversify. For example, it has become a major export point for pre-owned vehicles, many from Florida’s numerous rental fleets, bound for Guatemala and Honduras, says Lori Musser, director of public relations at the Tampa Port Authority.

Probably Tampa’s most sweeping diversification initiative is its pursuit of the international container market. Tampa has long been a regional container port, but until recently it lacked international container services, Musser says.

That all changed last October, when Zim Israel Navigation Company started serving the port with sailings to and from its international hub in Kingston, Jamaica.

Zim was lured to the port by the Executive Shippers Council, a coalition of importers and exporters in metropolitan Tampa that counts Ace Hardware, Publix Super Markets, PepsiCo, Cargill, and Eckerd Corp. among its members.

Council members were themselves shipping a total of 90,000 containers per year through other ports in the region, and previous studies identified about 400,000 containers per year that could pass through the Port of Tampa if it offered international service.

“This Council got behind us and said to Zim and other container carriers, ‘We’re going to use you if you come to Tampa,'” Musser notes. Container volume is growing, and the port is courting other international steamship lines as well, she adds.

To accommodate the growing volume, the Port Authority brought in Stevedoring Services of America (SSA) to operate a container terminal, and it is working closely with that new partner to acquire a container gantry crane within the next several months.

As part of a 10-year, $100-million plan for container terminal facilities development, the port will expand its existing container facilities in phases. Eventually, it is slated to include 2,050 linear feet of berth, 54 acres of paved storage, a multi-lane gate, and three to four gantry cranes.

“Our great location, deepwater channel, rapidly expanding hinterland, and ongoing investments will position us as a competitive logistics option for those doing business with Latin America and the world,” says Wade Elliott, senior director of marketing for the Tampa Port Authority.

Best Location for Serving Customers

Headquartered in Jacksonville, Crowley Liner Services is one of the major shipping lines that connects U.S. businesses with trading partners to the south. The company has operations in Jacksonville and in South Florida at Port Everglades. Crowley provides cargo service to and from Central America, the Caribbean, Mexico, Puerto Rico, the Bahamas, the Dominican Republic, Haiti, and Cuba.

“Because our service emphasis is on the Caribbean and Latin America, we have found that being in Florida affords us the best opportunity to be responsive to the needs of our customers shipping goods to and from the United States,” says Mark Miller, director of corporate communications for Crowley Liner Services.

A sister company, Crowley Logistics, is also based in Jacksonville. It has offices and one distribution center in that city and three distribution centers in South Florida.

Among other things, Crowley’s Florida operations provide an important transportation link for the U.S. fashion industry. “One of our most important customer segments is the apparel trade, which involves components and raw materials needed to make garments that are shipped southbound and finished garments that are shipped northbound,” Miller says. “Many of our customers have distribution centers in South Florida that are used for this trade.”

Crowley’s position in Florida also helps it provide some extraordinary services when needed. Last year, for example, “a major customer with five time-sensitive containers of mixed groceries made a booking error that would have put the loads into Panama a week late,” Miller says. Crowley arranged to truck the loads 700 miles from Georgia to Port Everglades in less than 24 hours.

A Saturday night sailing to Costa Rica was delayed until Sunday morning so Crowley could load the shipment. “Once in Costa Rica, the containers were to be trucked to Panama, but heavy rains washed out several of the main highways,” he says. “So the Crowley team decided to relay the loads by ship, allowing the containers to arrive safely and on time.”

Rail Options

When they move goods in and out of Florida’s air and seaports, shippers can choose from an abundance of rail and road connections. Three major railroads—Florida East Coast (FEC), CSX, and Norfolk Southern (NS) serve the state. FEC offers scheduled service on a 350-mile network along the state’s east coast from Miami to Jacksonville. It offers connections with cities outside the state through partnerships with CSX and NS.

“International is about 25 to 30 percent of our overall intermodal business,” says John Lucas, vice president and general manager of intermodal marketing at FEC Intermodal. While the rail line also carries goods for customers who trade with Asia and Europe, “our big piece is the Latin American trade, just because of where we’re located,” he says.

FEC has exclusive access to the Port of Miami, Port Everglades, and the Port of Palm Beach, plus non-exclusive access to the Port of Jacksonville. “We’ve got a multitude of steamship lines calling on the same ports in Latin America, with excellent vessel sailing frequency,” Lucas says.

With a capital plan in place at FEC to upgrade facilities, the rail network, and equipment, shippers can look forward to even better service in the future. This year in Miami, for example, FEC plans to move a large operation that handles rock for use in construction, freeing up space. “That’s going to throw a lot more capacity for intermodal in our Miami facility,” Lucas says.

Great Northbound Rates

Along with its railways, Florida also boasts several interstate highways, including I-95 in the east, I-75 in the west and I-10, which runs east to west across the northern portion of the state, then across the United States to Los Angeles.

Florida’s carriers offer a good bargain to local companies that ship to points north. Florida consumes much more than it manufactures, and “this creates a very favorable backhaul rate for cargo moving into the interior of the United States,” says John Freeman, executive director, international programs, Cornerstone Division, at the Jacksonville Chamber of Commerce.

Of course, heavy demand for transportation into the state poses a challenge when companies need to ship goods from further north into Florida-based facilities, especially during the peak retail season at the end of the year. Third-party service provider Ozburn-Hessey Logistics (OHL) is using its distribution center in Miami to develop solutions to beat that trade imbalance when capacity into Florida is scarce and rates are high.

One OHL client, a wine company, was having trouble getting its product into markets from Orlando and points south during the crucial fourth quarter, says Shawn Barnett, vice president of business development in OHL’s Jacksonville office. To solve that problem, OHL is “forward stocking” the company’s wines, building up inventory in Miami well before the winter holidays.

“They’re going to take advantage of cost-efficient rail car service into Florida, because obviously there’s no rush to get the product there for immediate distribution,” he says.

As the holiday season approaches, and trucks loaded with consumer goods start pouring into Miami, OHL’s client will ship its wine from the warehouse to markets such as Fort Lauderdale, Tampa, and Orlando. “They’ll use the backhaul rate and the capacity to distribute north in Florida, taking advantage of that empty equipment,” Barnett says.

Options Spell Savings

The Jacksonville metropolitan area offers a fine illustration of the many transportation options available in Florida. “We have all the factors you need to make intermodalism work for you,” says Joseph Strain, general manager of distribution and carrier services at the Jacksonville Port Authority.

More than 200 trucking lines serve customers in and around Jacksonville, he points out. The Better Jacksonville Plan, a comprehensive growth management initiative, has earmarked $1.5 billion for road and infrastructure improvements.

“With the increased population growth in the southern United States from the north Florida region, we can penetrate a 35-million consumer market within an eight-hour drive time,” says Freeman at the Jacksonville Chamber. “Within a second-day trucking scenario, we’re reaching just about half the U.S. population.”

Efficient intermodal connections and numerous transportation choices are part of the reason more companies are choosing to locate distribution centers in Jacksonville. “If you come to Jacksonville, you have options, and those options spell savings,” Strain says, as trucking and rail firms compete for shippers’ business.

Companies with distribution centers in or near Jacksonville include Fishman and Tobin, an apparel company that imports garments from the Dominican Republic; King Provision Corp., an approved Burger King distributor with customers in Central America, South America, and the Caribbean as well as the United States and elsewhere; and BJ’s Wholesale Club, which services stores in Florida, Georgia, and North and South Carolina from its 480,000-square-foot Jacksonville facility.

While Jacksonville and other regions already offer strong intermodal connections, Florida’s government and its private sector are cooperating on a major initiative to make the state’s intermodal infrastructure even better.

“The issue of intermodal transportation has been a big one for Florida, and the state has recently undertaken what it calls the Strategic Intermodal Systems (SIS) plan,” says Mike Rubin, vice president of the Florida Ports Council in Tallahassee.

The aim of this public-private partnership is to change the way transportation dollars are invested in Florida, says Terry Kraft, project manager for the SIS in the Office of Policy and Planning at the Florida Department of Transportation. As part of the initiative, participants are defining the roles that public and private partners on the state, regional, and local level should play in improving Florida’s transportation infrastructure.

“It’s helping us move in the direction of better cooperation in planning for freight movement,” Kraft says.

For the moment, SIS participants are mainly focused on preliminaries, such as setting up partnerships and recommending better ways to channel funds into transportation improvement projects.

“Yet, as early as July, we will begin funding specific projects that try to eliminate the bottlenecks,” Kraft says. Activities could include building more direct connections between airports and seaports and the state’s major highways.

Better connections will only make it easier for businesses in Florida to profit from the booming trade with Central and South America and the Caribbean.

“Florida has always seen itself as the gateway to Latin America,” says Rubin. And its claim to that title could grow even stronger if proponents persuade members of the Free Trade Area of the Americas (FTAA) to locate their secretariat in the state. Miami is one of 10 candidate cities competing to host the headquarters of this 34-nation free trade agreement, which is scheduled to start operating next year.

“We’re very hopeful that the FTAA will locate here. It just underscores the service that’s available in the state of Florida for the movement of international commerce, particularly in the Americas,” Rubin says. “If the FTAA secretariat locates here, it’s yet another statement that Florida serves as that gateway.”