46 DC VELOCITY NOVEMBER 2015 www.dcvelocity.com
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to Jacksonville-based FEC. The facility, constructed with
$48 million in state loans and grants, is used to transfer
international boxes and to move domestic cargo in and
out of South Florida. For example, import containers are
transloaded at the port to FEC trains, which can then take
the boxes to their destinations via its 351-mile rail network
linking Miami and Jacksonville. Or FEC can connect with
Eastern railroads CSX Corp. and Norfolk Southern Railway
to deliver as far north as Cincinnati and as far west as
Dallas. The service can reach 70 percent of the U.S. population within four days, according to FEC.
Before the facility opened, containers had to be trucked
between Port Everglades and an FEC yard two miles from
the port. Because of its proximity to the port, the new terminal will allow the operation to expedite inbound and outbound movements, and will eliminate 180,000 annual truck
trips from local roads by 2029, according to port officials.
James R. Hertwig, FEC’s president and
CEO, said he expects the railroad to execute 500,000 to 600,000 lifts per year at the
facility by 2020, up from 100,000 per year
currently. A lift is defined as a trailer or
container being lifted onto or off of a railcar. One intermodal movement can consist
of multiple lifts, depending on how many
transport modes are involved.
GOING DEEP
Port Everglades’ leading position in the
state’s ocean cargo market is all the more striking considering that 42 percent of its revenue in the past fiscal year
came from the leisure cruise segment, where it is one of
the world’s busiest ports for multiday voyages. It’s hard to
imagine any U.S. port that serves two masters in the way
Port Everglades does. Cernak acknowledged that the business is still “slanted toward the cruise side of the house,”
and that one of his main objectives is to elevate the cargo
business to reach parity. Cargo traffic is growing by about 2
percent a year, he said.
After a solid start to 2015, Port Everglades’ import TEUs
trended down from last year’s levels until September,
according to Hackett Associates, a consultancy. Import volumes through July dropped 2. 8 percent from the same period in 2014. In its September forecast, Hackett said import
TEUs should rise for the balance of the year on a sequential
basis. Year over year, however, 2015 volumes will drop 0.9
percent from 2014 levels, the firm predicted. Ben Hackett,
the firm’s founder, said Port Everglades’ volume growth
will be hamstrung by its shallow 42-foot channel depth,
which makes it impossible for the port to handle large vessels laden near capacity.
Indeed, Port Everglades’ biggest long-term challenge is
remaking its waterside infrastructure to compete with other
South Atlantic ports for the megavessels entering global
trade lanes, traffic that’s likely to rise following the sched-
uled April 2016 opening of the expanded Panama Canal,
which will enable passage of the big boats sailing to and
from Asia. Today, the port is constrained in both turning
space and navigation channel depth. Although the port
handles post-Panamax ships—vessels with a 10,000-TEU
capacity and up—the ships must be lightly loaded in order
to safely maneuver in its 42-foot-deep channel. In addition,
the port’s ship turning basin at its southern end is only 900
feet long, which limits the size of the ships that can call at
Everglades.
Work will begin in late 2016 to extend the turning basin
to 2,400 feet, which officials said would expand the quay
area from one to five berths. The port also plans to add
five cranes over the next 12 years to its existing seven-crane
infrastructure, with each of the new units capable of working vessels carrying up to 13,000 TEUs.
The “Southport Turning Notch” project is slated for
completion sometime in 2019, according
to Cernak. The channel-deepening project,
which will expand its depth to 50 feet, is
set for completion in 2022; the project has
been on the drawing board since 1996.
Though Port Everglades will always be primarily a north-south port, Cernak said he
sees an opportunity to gain more share of
the bidirectional Asian trade, which today
accounts for just 4 percent of its business.
Besides the need to upgrade its infrastructure, Port Everglades must contend for
trans-Pacific market share with PortMiami, which opened
its 50-foot channel for business in mid-September. Because
of its geographic position as the nation’s southernmost
gateway, Miami is positioning itself as the first U.S. deepwater port of call for megaships transiting the canal. Like Port
Everglades, Miami is not a major player in the trade; Asian
imports account for only 6. 5 percent of Miami’s business.
In attracting vessels plying the Asian trades, both ports suffer in comparison with Savannah (Ga.), Charleston (S.C.),
and Norfolk (Va.) because Southeast Florida is considered
too far away from major U.S. commerce centers to be viable for businesses serving the eastern half of the country.
Cernak said he does not look to compete with Miami for
vessel calls, and noted that all Florida ports work closely
with the state to support its competitive position. Port
Everglades does not receive any direct local tax revenue.
Cernak added that both ports’ limited footprints—Miami
handles fewer TEUs than Port Everglades—mean that one
will not disproportionately gain at the expense of the other.
“I can’t assume all of Miami’s business, and they can’t
assume all of mine,” he said.
Cernak said he’s happy Miami has achieved the supposedly magical 50-foot water depth status to accommodate
near-full or fully laden megaships. “I applaud them, and
I’m coming right behind them,” he said. “The winners will
be South Florida businesses and consumers.”
