As Port of Miami expands, a terminal operator's tenure in question
By Zachary Fagenson
It's unclear whether a longstanding terminal operator at the Port of Miami will be around to reap the benefits of the billions of dollars worth of infrastructure work now underway.
The Port of Miami Terminal Operating Company, called POMTOC, was formed in the early 1990s by four stevedore companies to operate a piece of Dodge Island.
"We were the first ones to sign our lease 16 years ago," said Chief Operating Officer and Senior Vice President John Ballestero. "Our lease expires in the summer of 2014 and we've been negotiating with the port to get a new lease and extend it for another 25 years."
Though he said he was confident POMTOC and the port would reach agreement, Kevin Lynskey, the port's assistant director of business initiatives, said otherwise.
"The Port of Miami has generated a great deal of interest in the cargo community because of our infrastructure improvements. Consequently, we are opening dialogue to an array of industry players [and] we are expecting something exciting to emerge," he wrote via email. "Although we have had a lengthy negotiation with POMTOC, it never reached fruition.
"POMTOC can be, however, part of the broader process intended to maximize the Port's competitiveness and economic future," he added.
The company is one of three terminal operators that pay nearly $33 million in rent and wharfage to the port annually.
POMTOC accounts for about $8.5 million while anchor tenant Seaboard Marine runs about 70 acres and generates $12.5 million. South Florida Container Terminal — a partnership between French CMA CGM and Dutch APM Terminals — adds another $11.5 million.
The last two tenants' leases were re-signed in 2008, Mr. Lynskey said, but it's unclear what the future holds for the port and POMTOC.
The Panama Canal is slated to reopen in 2014, as POMTOC's lease ends.
Once finished, the canal will allow passage to ships carrying up to 13,000 20-foot equivalent units, an industry unit of measurement based on the 20-foot containers ships carry, to squeeze through. Currently it only allows ships carrying up to 5,000 units to pass.
The port handled about 850,000 equivalent units in 2010, up 4.8% from the 807,000 it moved in 2009 but far less than the about 1 million it handled during the mid-2000s.
Of last year's traffic, Mr. Lynskey said "just over 350,000 was Seaboard, over the 330,000 range was the joint venture and the remainder, under 200,000 TEUs, came through POMTOC."
Meanwhile, the port is undergoing a multibillion dollar facelift that includes a tunnel connecting Dodge Island to downtown Miami, a planned a dredging of its South channel so it can accommodate the larger ships and a planned overhaul of on-port rail that may connect it to a Flagler-developed inland port near Miami International Airport.
If all the projects' completions can be wrapped up soon after the Panama Canal's reopening, Miami may be positioned to capture significantly more cargo. Those increases might make running a piece of the port attractive to global shipping companies.
"In Seaboard [Marine]'s case we really expect north-south traffic to have a long sustained healthy growth," Mr. Lynskey said of trade between the US and Latin America. "East-west trade already represents 30% [of port traffic], and of course it's completely dominated by China and Hong Kong."
The number of ships coming through the port is expected to remain the same, though each would be larger and capable of using any of the terminals.
"Carriers who have the large order books for post-Panamax vessels are going to have an awful lot of interest in the port and they do not need to have a cargo terminal to do business," he added.
Yet Florida Foreign Trade Association Vice President Joe Smith said the growth might not be guaranteed.
For "east-west trade you still have competition from New Orleans, and you've got competition fromů Savannah."
Though Miami is the only port south of Norfolk, VA, with congressional authorization to dredge to 50 feet, the depth needed to handle the massive vessels, Mr. Snith pointed to a recent Florida Chamber of Commerce report that gives a sobering look at Miami's role in the international logistics network.
"They said Atlanta and Savannah is close to over 27% of the US population," he noted.
"Then when you get down to Orlando that gets downs to 14%, and they don't even mention Miami."
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