Cargill's Chelsie Taveras with Levi-Strauss's Ronda Martinez and Seaboard Marine's Maggie Martinez

Seaboard, Cargill, Levi Strauss optimistic heading into 2010

World trade is expected to pick up this year after a sharp drop in 2009. But serious challenges remain, from price swings for some basic products to uncertainty over the pace of global recovery, participants said at the 2010 kick-off for WorldCity’s quarterly Trade Connections event series.

Last year, South Florida’s trade with the world fell 12 percent to dip below $80 billion, its first reversal since 2001. Both imports and exports shrank. U.S. consumers bought less, stung by the recession. Plus, South Florida’s top partners bought less, hurt by weaker sales of their key exports: Brazil sold fewer jets overseas and Venezuela earned less for its oil as prices fell on global markets, said Ken Roberts, president of WorldCity. Embraer regional jets for U.S. consumption almost all fly into the Miami Customs district.

But there’s good news too. The Miami Customs district, which stretches from Palm Beach County in the north to the Florida Keys in the south, moved up two positions, to rank No. 11 nationally, since its trade loss was less severe. Also, South Florida trade began to recover in the final months of 2009 and should move towards the $90 billion record set in 2008.

“We’ve all been dented and dinged, but,” Roberts said, “the worst is behind us.”

South Florida trade also is faring better than the U.S. average. U.S. goods trade last year fell faster, down 22 percent, and ended again in deficit. South Florida instead posted its 15th straight year of surpluses, exporting more than it imports, thanks to its pivotal role supplying cell phones, printers, jet parts and other products to Latin America and the Caribbean.

Seaboard Marine’s Maggie Martinez was one of three panelists

Maggie Martinez, director of so-called “807 sales” for Miami-based shipping line Seaboard Marine, can attest to the slump and the revival. Last year, she saw a drop in U.S. exports of fabric and other inputs that are assembled overseas into clothes and other items sold back to the United States with special trade perks — the 807 trade, named for the actual federal code regulating the practice.

“But it’s starting to come back,” Martinez said, of the trade with such neighbors as the Dominican Republic, El Salvador, Honduras and Guatemala.

Apparel maker Levi Strauss also is seeing an uptick in its business in Latin America. The San Francisco-based company sources about 25 percent to 30 percent of its Levi’s, Dockers and Levi’s Signature brand clothes in Latin America, with the largest amount from Mexico.

Ronda Martinez, representing Levi Strauss

It oversees that business from an office in Miramar, said Ronda Martinez, inbound logistics manager for the United States and Canada.

To keep costs down and better compete, Levi’s has been reducing the number of contractors in the Latin region, now about roughly 20 instead of 50-plus, Martinez said. It also is looking for ways to increase automation and to “green” the supply chain, as retailers move toward more eco-friendly purchases, she told the Trade Connections session of about 60 people.

Some shipping companies from Asia are slowing their sailing speed to cut use of fuel, reduce costs and become more “eco-friendly,” said Robert Barcelo, sales manager for Hanjin Shipping, the Korean shipping line.

That may shift some trade patterns. Levi’s likely will increase “smaller orders out of Latin America to fill small gaps in inventory” of clothes that will take longer to transport from Asia, said Levi’s Martinez.

Rafael Puga, president of the Florida Foreign Trade Association, asked how new U.S. free trade agreements with Central America and other areas are affecting commerce.

“It absolutely has helped. We’re waiting for the Colombia agreement to be signed,” said Seaboard’s Martinez, of the U.S.-Colombia accord that should boost Florida exports but has been languishing in U.S. Congress since the Bush Administration.

Changing prices for basic goods — such as sugar — also present headaches, said Chelsie Taveras, international commercial operations manager for commodities giant Cargill. In April last year, the price of sugar skyrocketed, prompting soda makers, confectioners and other big users to seek out fructose corn syrup and other sugar substitutes. Taveras has been busy for moths, trying to find supplies and ships to triple Cargill’s exports of those sweeteners. When sugar prices drop, she will switch gears again.

Bank of America’s Hernan Mayol asks a question

Also nerve-racking: trying to figure how much trade — and the economy — might rebound this year. An informal survey among Trade Connections participants found some think the recession is over, many think it will end in six months and others think it will take even longer. The answer may be clearer at the next quarterly meeting, set for June 16, when WorldCity will release the 10th annual version of Miami TradeNumbers.

Trade Connections is one of six event series hosted by WorldCity, with others for human resource managers, marketing directors, government affairs officails and the “CEOs” at local multinationals. Trade Connections is sponsored by Miami International Airport, Seaboard Marine and the Port of Miami.