PortMiami starts to leverage its ideal position for a greater share of U.S. trade with Mexico
By Joseph A. Mann Jr.
Last year, the State of Florida imported $9.6 billion worth of goods from Mexico, mostly cars, trucks, auto parts, and tequila. Almost all of it came by land, most of it trucked from Mexico via congested border crossings in Texas. In the opposite direction, Florida exported $4 billion in products, also by truck and train, mostly dairy and aerospace products. Now, PortMiami and private companies are working to redirect billions of dollars of that containerized cargo trade to ships linking Miami with eastern Mexican seaports.
The argument for redirecting trade to sea routes is primarily financial. PortMiami officials say that the water route between Miami and Mexico can save around $2,000 per container on shipping costs, as much as three days in transportation time, and eliminate other complications such as duplicate documentation checks at the border, changing drivers, switching equipment, and other hassles.
Another major advantage is PortMiami’s intermodal capacity, since it has a direct link with Florida East Coast Railway (FEC) and its cargo network. Mexican exports to Florida and the U.S. Southeast through PortMiami can benefit from efficient cargo management, storage capacity for perishables, fast access to the U.S. Interstate highway system, as well as direct rail links to major U.S. markets. And some private sector analysts believe cost savings could be even greater than PortMiami’s estimates.
“We completed a cost comparison from ocean freight to truck on various origins in Mexico and the ocean cost is easily one-quarter of the cost of trucking, and faster,” says Gary Goldfarb, chief strategy officer at Miami-based Interport Logistics. “We do have great expectations,” he says. “But the volume is just now growing” and still in its initial stage.
Indeed, while sea cargo offers “less congestion, less paperwork, less cost, no pilferage,” according to PortMiami, trade between PortMiami and Mexico currently represents less than one percent of total trade for the port. It is, however, expanding as more shippers provide service to Mexican seaports on the Gulf of Mexico and the Caribbean, and as shippers realize the advantages of sending freight to Mexico by sea. PortMiami, Grupo Mexico Transportes (which owns FEC), and Interport are all actively involved in promoting expanded ocean trade with Mexico. And so far this year, sea trade between PortMiami and Mexico has grown by more than 30 percent from the same period in 2022. “And it will continue to grow because of congestion at the land border between the United States and Mexico,” according to a spokesperson for PortMiami’s Cargo Development Division.
The potential to dramatically increase trade between Mexico and PortMiami is considerable. While Florida will never supplant Texas as the leading trade partner with Mexico (last year Texas imported $141.3 billion and exported $144.1 billion worth of goods), the total amount of trade between the U.S. and Mexico totaled $779.3 billion in 2022. This offers PortMiami a great opportunity to expand seaborne shipments to and from Mexico. Carriers at Port Miami currently offer service to the eastern Mexican ports of Veracruz, Altamira, and Puerto Morales, and there are now three shipping lines that provide service between PortMiami and Mexico, with a new service expected by the end of 2023. Late last year, CMA CGM, the world’s third-largest container shipping company, launched its new service connecting the western Mediterranean to PortMiami and the Mexican ports of Veracruz and Altamira.
PortMiami’s main exports to Mexico currently are waste, scrap paper, and paperboard, while the top imports from Mexico through the port are rubber tires, spirits, and miscellaneous cargo. With new routes by sea, that could all change – and expand to include everything from agricultural products to jet turbines.
