WorldCity Business Magazine

(4) Miami TradeNumbers 2007: Port Profile - Little Port with Big Plans

by Karen-Janine Cohen

The Port of Palm Beach is small by comparison to the Port of Miami and Port Everglades, but it does a thriving international trade that will get bigger if it can go deeper

The Port of Palm Beach may handle just a pittance of South Floridas foreign trade. But by the end of 2007 this smallest of the regions big-three ports will be close to finishing projects that port executives and tenants hope will attract more business while readying the port to become a bigger player.

The port has its struggles. Higher operating costs along with other expenses will likely keep it from showing a profit this year. And it would take pricey projects like a major dredging operation for the port to significantly increase capacity.

Meanwhile, port leaders are calling on the region to back its inland port proposal; a western Palm Beach County distribution hub that would serve all South Florida ports, an idea that has yet to catch fire in Broward or Miami-Dade.

Yet such aspirations could become front-burner projects if U.S. trade continues to grow. Indeed, South Florida will have to look to upgrade all its trade infrastructure as congestion increases at the Port of Miami and Port Everglades.

For now, the Port of Palm Beach accounts for just 3.1 percent, or $1.2 billion, of South Floridas exports and 2.3 percent, or $751.2 million, of its imports as South Florida foreign trade continues to grow, exceeding $70 billion for the first time in 2006.

The Port of Palm Beach is the fourth busiest in the state and ranks 18th busiest nationwide. But its limitations are clear. Its draft is just 32 feet and a dog-leg approach means it can take ships of up to only 650 feet (700 feet with tugboat pilot approval). And it has nowhere to expand past the roughly 200 acres on which it sits.

Like its bigger siblings, the Port of Miami and Port Everglades, it serves cruise passengers, shepherding thousands to Palm Beach Princess and SunCruz day trips.

Meanwhile, the cargo tenants have carved out a unique Caribbean market niche, shipping general merchandise to the Bahamas and other island nations and getting back, in many instances, building and construction material such as the lime rock and cement. Its largest tenant is Tropical Shipping, a subsidiary of the Naperville, Ill.-based energy company Nicor, which plies ports in Canada, Palm Beach and the Caribbean.

And the port is useful to shippers with unusual cargo. For example, about 2,400 Hialeah-grown palm trees recently shipped through the port bound for an Angola resort.

The port of Palm Beach also takes in Florida Power & Light Co.s fuel. A decrease in fuel shipments for the utility is one reason that revenues have slipped, said Senior Director of Business Development Jarra Kaczwara. And Port Deputy Director Kathy Andress said that fiscal 2007 revenues are not expected to exceed last years $13 million in part because of increased operating costs.

For example, annual security costs have ballooned from $600,000 to $5 million since September 11. Still, the port is completing work that Andress said could push operations into the black in a year or so.

One is a $660,000 project that will bring online a second set of railroad tracks leading to berths, allowing vessels to unload cargo directly into railroad cars that then go to a holding yard and on to Florida East Coast Railway. Its the only South Florida port that has such FEC access.

The $18 million South Gate Complex project is also nearing completion. It will streamline access by separating containerized cargo trucks from vehicles carrying commodities like sugar, molasses or cement. The project includes new offices and a warehouse that will let some truckers deliver goods without entering restricted areas.

Yet those projects are modest compared to port executives big idea: the inland port. That would be a massive staging area in western Palm Beach County serving the entire region. A study focusing on the market for such a facility and its economic impact is underway, said Andress.

Meanwhile, users say the ports small size and attentive administration give it a competitive advantage.

Todd Cannon is the vice president of Vecenery, the energy division of the Vecellio Group, a West Palm Beach based highway and heavy construction firm. Vecenergy has a port terminal where it offloads between 80,000 tons and 100,000 tons of liquid asphalt annually. Its also building a diesel fuel terminal.

Its a less congested port and its user friendly, Cannon said, though he added that dredging to a 38-feet draft would double business. Kaczwara said a dredging study to evaluate how deep the port can be made and such a projects economic impact is underway by the U.S. Army Corp. of Engineers.

Another long-term client is the family run firm Teeters Agency & Stevedoring, which specializes in trade with Haiti. John Turner, the firms outside counsel, an attorney with the West Palm Beach office of Buckingham, Doolittle & Burroughs, said that the ports small size gives it a huge advantage. Teeters can assemble and hold Haiti-bound goods in a limited amount of space while minimizing warehouse time.

The ability to move cargo on or off the ship rapidly in order to avoid the clock ticking on precious property is where the Port of Palm Beach has turned constraint into an opportunity, he said. Still, he said, in order for the port to take advantage of burgeoning worldwide trade, capital projects such as dredging have to move quickly past the planning stages.