Week of April 30, 2009
| Port tunnel goals rely on an optimism that's hard to accept Boosters say we must dig Port of Miami tunnels to handle a coming cargo boom without hopelessly tangling trucks in downtown traffic.While far-cheaper solutions could work now, they admit, success would erode support for tunnels vital to growth — so we won't solve today's problems today. "We're looking to double the amount of cargo activities at the Port of Miami," says Port Director Bill Johnson. While he admits the easy answers — trucking at night, increasing rail use and barging on the Miami River — are viable options the port may try eventually, without a tunnel he says we'll never be ready for the future. "The real need," he says, "is 2015, 2016 and beyond." Beyond 2016, assumptions are growth of port use from 3,600 heavy trucks a day now to 9,200 by 2033 — a huge jump at a port that's out of land for expanding cargo capacity. It's good to be ready for the future. The problem is to know what the future is. Unfortunately, with the same irrational exuberance that said the stock market would keep rising forever, we're often wrong. Five years ago, the future cried out for condos downtown to meet demand that would peak about now. We built 24,000, though never had Miami absorbed more than 4,000 new residences in a year. Now we're crying out for relief from a glut of vacant condos. Just because sales soared as early buyers flipped at high profits, the professionals had assumed they could replicate success ad infinitum. They ignored words tucked into every piece of financial literature: Past performance is no indicator of future success. In the same way, Miami's collective exuberance leads us to assume that whatever is good now always will be, only on steroids — we will keep growing exponentially. Exuberance has historic roots. For 90 years Miami-Dade's population grew at least 85% every 10 years, and that led to booming demand for everything from housing to classroom seats. Why not port cargo? Unfortunately, preparing for continued massive expansion ignores factors that could overtake plans. Population growth slid in the 1960s to 36%, then 28% in the 1970s, 19% in the 1980s and 16% in the 1990s. This decade's growth through 2007 was just 5.9%. Now it's near decline. But before the slide, we had begun to build more and more schools to handle growth that was surely due. After all, people had been flooding in, pushing enrollment from 292,411 in 1990-91 to 352,595 in 1998-99. The trend continued annually, hitting 374,725 in 2001-02. So we built to match. From 271 schools in 1990, we grew to 318 in 1999 and 331 in 2001. And we knew we had to redouble work to keep up with a rapid rise yet to come. So we built 84 more schools from 2001 to 2008, hitting 415. But oddly, starting in 2002, trends reversed. Enrollments declined every year as new schools rose. While school counts rose 25%, enrollments fell more than 30,000 to 345,150. Experts now see equilibrium or decline for a decade. For unanticipated reasons, we prepared for the wrong future. The truth is, the farther ahead we plan, the fuzzier the picture, the greater the peril we'll be heading in the wrong direction and the larger the risk of waste. Three massive office towers are now rising in the downtown-Brickell Corridor. The developers couldn't foresee the sharp demand drop a recession caused, any more than Wall Street experts were forecasting a market dive or regulators were preparing for a financial implosion. That's all short term. In the longer run, some claim, we can more clearly forecast the continued demand that growth would make vital — for example, tunnels to the Port of Miami. Perhaps. But as Jeff Stibel argues in a recent HarvardBusiness.org article, "The human brain is great at predictions but horrible at long-range forecasting." Explaining why we can't predict financial markets, he writes, "The future, like any complex problem, has far too many variables to be predicted. Quantitative models, historical models, even psychic models have all been tried — and have all failed" — there are just too many possibilities. And, we might add, too many interim events can make today's seemingly safe growth plans appear irrationally exuberant in the future. Take a parallel to the Port of Miami's plans at our other economic engine, Miami International Airport. Assuming almost two decades ago that passenger and cargo growth would keep rising, the county decided to balloon airport capacity to capitalize on our certain future — just as the seaport now wants to double capacity to meet future needs. In 1993 we allotted almost $2 billion to double air terminal space and quadruple cargo capacity. We're tardy but still at it, with plans now to finish in 2011. Cost has passed $6 billion, growing faster than airport capacity. But there's now little need for so much capacity. We're nowhere near projections. In 1997, when the airport handled 35.2 million fliers, the county forecast we'd have 40 million in 2000, 47 million in 2005, 55 million in 2010 and 63 million in 2015. Cargo was forecast to grow to 2.9 million tons in 2000, 4 million in 2005, 5 million in 2010 and 5.7 million in 2015. There'd be 613,000 aircraft operations in 2000, 663,000 in 2005, 720,000 in 2010 and 781,000 in 2015. A $1.3 million 1995 report by Miami-based Ricardo & Associates warned that the airport would outgrow even these numbers by 2020. How did the forecasts do? In 1998, the airport handled 33.9 million passengers. By 2008, the needle had barely budged to 34.1 million, a decade-long growth of less than four-tenths of a percent, far below 1997 levels. Next year we'll be 20 million passengers below forecast. Need was forecast 36% too high. How about cargo? In 1998 we hit almost 2 million tons. By 2008 we were still there, about 60% below our 5 million need projection. Aircraft operations had surpassed 500,000 in 1995. They fell to 471,214 in 1998 and by 2008 to 370,881, about half of forecast. As we built and built and spent and spent, need never materialized. Reasons included changes in the airline industry and route plans that fell through. The trends we banked on weren't trends at all. We do have a far nicer airport now, just as tunnels may well be nicer than the port bridge. But are we digging a $2 billion hole out of true need, or just to spend money, or because we see a future that may not exist when tunnels are ready? Any forecast can be blown off course by unknowns that might slow or even reverse trends that seem to demand major projects to handle long-term growth. Proponents tend to overestimate demand, especially when they benefit — even if only psychically — from overestimates. That doesn't mean that we shouldn't build to meet far-distant needs. We'd be crazy not to — if we knew the future. But the farther off the presumed need, the more cautious we must be. It's hard to be sure that trends won't be altered by events we can't forecast, ranging from use of longer-range jets to demographic shifts to new technology and innovation, or war and peace, to health concerns and shifting world conditions or, heaven forbid, natural disaster. What we don't know can hurt us. We need to be especially skeptical of growth that's forecast in the face of stagnation or decline. Based on a Panama Canal expansion and a deeper channel here, port management sees need for tunnels to handle a vast cargo increase in six or seven years. But what's happening there now? Since 2005, cargo has fallen annually. In 2008 the port handled only 78% as much as in 2005. The current economy won't help. And while in 1999 the port hosted 2,600 cargo ship visits, by 2008 the number had fallen to 1,624. Plus, a new University of Central Florida forecast sees a regional trade decline lasting at least five years. Don't assume tunnels will spark a huge turnaround. Like Port Director Johnson, I'm an optimist. Miami in the long run is likely to grow in many areas. The port's cargo should be among them. But then, I was certain in the early 1990s that airport growth also would be rapid and continuous. And I would have bet that school enrollment and local population would keep soaring. Our challenge is to keep up with true need and opportunity without tossing airport billions up in the air or sinking seaport billions under Biscayne Bay. The evidence of need for tunnels is unconvincing. To dig now is indeed irrational — and very costly — exuberance. |
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