Port of Miami in best financial shape in 'well over a decade' despite lagging freight business
By Risa Polansky
Just more than two years after a change in leadership, the Port of Miami is in its best financial shape in a decade, although freight business has continued to lag, Port Director Bill Johnson says.
But officials expect cargo numbers to jump this fiscal year. Even in the face of declining trade worldwide as economies falter, recently inked terminal agreements should help insulate the local port. They provide for guaranteed rent payments from operators, placing less emphasis on cargo volume.
Miami-Dade commissioners asked for an impromptu report on the state of the port after a rapid fire approval of three office space leases, a new advertising program and a payment dispute settlement, among other port-related measures, at a Transit Committee meeting last month.
They gave the items final approval last week.
"This is a lot of change of business, from advertisement to rentals to consolidation of office spaces, and this has been over years' effort, and we're just clicking it off, but it needs to be noted that you [Mr. Johnson] were brought in here to turn the port around," Commissioner Sally Heyman said at the committee meeting in November, requesting he fill the committee in on where he stands in the mission.
Committee Chairman Dorrin Rolle also asked Mr. Johnson to respond to claims that the port is losing money.
"Port of Miami is in solid financial position. We have a balanced budget — we've had a balanced budget for the last two and a half years," Mr. Johnson said. "I think the port is probably in its best financial condition in probably well over a decade."
As recently as the close of the 2005-2006 fiscal year, the port ran an operating deficit of more than $6 million.
Mr. Johnson noted that this year's budget has a $2.5 million revenue reserve and touted a "record year" on the cruise side: nearly 4.2 million passengers and $3 million more in revenue than projected.
He acknowledged, though, that "cargo is slightly under where we'd like it to be — but we're coming back strong."
Between fiscal 2006 and fiscal 2007, cargo tonnage dropped from nearly 8.7 million tons to about 7.8 million tons, according to port records.
Preliminary fiscal 2008 data show the port saw about 7.4 million tons of cargo — another drop from the year before, but less severe.
This fiscal year, officials project more than 7.9 million tons, the first increase in years.
The revenue side mirrors the tonnage data between fiscals 2006 and 2007 — a drop from nearly $22.4 million in 2006 to $20.5 million in 2007 — but fiscal 2008 saw a jump to about $21.1 million, preliminary numbers show.
About $23.1 million is projected for fiscal 2009.
This is due in part to two new agreements with longtime terminal operators Seaboard Marine and new team AP Moller-Maersk and shipping line CMA CGM.
In approving the Seaboard agreement in May, port officials told commissioners the port would be guaranteed $9.6 million a year in revenue, with estimated actual revenues of $13 million.
The APM/CMA deal is to bring an annual net increase of $4 million for the seaport, officials said in June, generating a projected $15.3 million in revenue during the first year, $11.9 million of that guaranteed.
For the first time, the port is charging rent, one way to ensure fixed revenue.
In another victory for the port, Mr. Johnson said, it tied as the safest port in Florida, ranked by the state's Department of Law Enforcement.
JAXPORT in Jacksonville shared the accolade.
"We've gone from last place to tie for first place," he said, calling his tenure "two-and-a-half years of good work."
Mr. Rolle agreed.
"I'm sure we have some challenges, but we're in the black and we're moving forward," he said. "I think that needs to be lauded all over Miami-Dade County."