The chief executive and port director of Port Everglades, Steven M. Cernak, would like Americans to know they probably couldn't start their day without his port.
Most of the nation's underwear traverses the Broward County, Fla., port, according to Cernak, who has headed up operations there since March 2012. Each day, enormous quantities of materials enter the port to be loaded aboard ships bound for manufacturing sites in Latin America. The finished garments then return to the port, where they are then loaded onto trucks and trains to complete their journey.
"We like to think we play an important role in getting Americans dressed each morning," Cernak joked in a phone interview.
Cernak's jocularity belies the seriousness of his job and gives no hint of the intensity that comes with spending 12 years as a senior engineer at the Port Authority of New York & New Jersey, and then a 10-year stint as director of the Port of Galveston before he moved to South Florida. In a state surrounded by water, populated with 15 seaports, and boasting the third-largest population (Florida recently surpassed New York and trails only California and Texas), Port Everglades sits at the top of several categories. It is the state's leading port by revenue (cruise and cargo), with $153 million in fiscal year 2014, which ended Sept. 30, 2014. It is Florida's top containerport by volume, handling 1.01 million twenty-foot equivalent units (TEUs) in FY 2014, an 8-percent increase over the prior fiscal year. It was Florida's leading export port, with $13.6 billion in exports during calendar year 2014. It is the state's largest refrigerated cargo port, and the seventh largest in the nation. And it is the number one U.S. gateway for trade with Latin America, with 15 percent of all U.S.-Latin commerce moving through its terminals. It handled a record $27 billion in 2014.1 billion in total trade, split evenly between imports and exports.
Port Everglades believes it has an ace in the hole with the July 2014 opening of Florida East Coast Railway's (FEC) $72 million intermodal container transfer facility, built on 43 acres adjacent to the seaport that the port provided to Jacksonville-based FEC. The facility, constructed with $48 million in state loans and grants, is used to transfer international boxes and to move domestic cargo in and out of South Florida. For example, import containers are transloaded at the port to FEC trains, which can then take the boxes to their destinations via its 351-mile rail network linking Miami and Jacksonville. Or FEC can connect with Eastern railroads CSX Corp. and Norfolk Southern Railway to deliver as far north as Cincinnati and as far west as Dallas. The service can reach 70 percent of the U.S. population within four days, according to FEC.
Before the facility opened, containers had to be trucked between Port Everglades and an FEC yard two miles from the port. Because of its proximity to the port, the new terminal will allow the operation to expedite inbound and outbound movements, and will eliminate 180,000 annual truck trips from local roads by 2029, according to port officials.
James R. Hertwig, FEC's president and CEO, said he expects the railroad to execute 500,000 to 600,000 lifts per year at the facility by 2020, up from 100,000 per year currently. A lift is defined as a trailer or container's being lifted onto or off of a railcar, and one intermodal movement can consist of multiple lifts, depending on how many transport modes are involved.GOING DEEP
Port Everglades' leading position in the state's ocean cargo market is all the more striking considering that 42 percent of its revenue in the past fiscal year came from the leisure cruise segment, where it is one of the world's busiest ports for multiday voyages. It's hard to imagine any U.S. port that serves two masters in the way Port Everglades does. Cernak acknowledged that the business is still "slanted toward the cruise side of the house," and that one of his main objectives is to elevate the cargo business to reach parity. Cargo traffic is growing by about 2 percent a year, he said.
After a solid start to 2015, Port Everglades' import TEUs trended down from last year's levels until September, according to Hackett Associates, a consultancy. Import volumes through July dropped 2.8 percent from the same period in 2014. In its September forecast, Hackett said import TEUs should rise for the balance of the year on a sequential basis. Year over year, however, 2015 volumes will drop 0.9 percent from 2014 levels, the firm predicted. Ben Hackett, the firm's founder, said Port Everglades' volume growth will be hamstrung by its shallow 42-foot channel depth, which makes it impossible for the port to handle large vessels laden near capacity.
Indeed, Port Everglades' biggest long-term challenge is remaking its waterside infrastructure to compete with other South Atlantic ports for the megavessels entering global trade lanes, traffic that's likely to rise following the scheduled April 2016 opening of the expanded Panama Canal that will enable passage of the big boats sailing to and from Asia. Today, the port is constrained in both turning space and navigation channel depth. Although the port handles post-Panamax ships—vessels with a 10,000-TEU capacity and up—the ships must be lightly loaded in order to safely maneuver in its 42-foot-deep channel. In addition, the port's ship turning basin at its southern end is only 900 feet long, which limits the size of the ships that can call at Everglades.
Work will begin in late 2016 to extend the turning basin to 2,400 feet, which officials said would expand the quay area from one to five berths. The port also plans to add five cranes over the next 12 years to its existing seven-crane infrastructure, with each of the new units capable of working vessels carrying up to 13,000 TEUs. The first two, which are the only ones paid for, will be delivered in 2017.
The "Southport Turning Notch" project is slated for completion sometime in 2019, according to Cernak. The channel-deepening project, which will expand its depth to 50 feet, is set for completion in 2022; the project has been on the drawing board since 1996. Though Port Everglades will always be primarily a north-south port, Cernak said he sees an opportunity to gain more share of the bidirectional Asian trade, which today accounts for just 4 percent of its business.
Besides the need to upgrade its infrastructure, Port Everglades must contend for trans-Pacific market share with PortMiami, which opened its 50-foot channel for business in mid-September. Because of its geographic position as the nation's southernmost gateway, Miami is positioning itself as the first U.S. deepwater port of call for megaships transiting the canal. Like Port Everglades, Miami is not a major player in the trade; Asian imports account for only 6.5 percent of Miami's business. In attracting vessels plying the Asian trades, both ports suffer in comparison with Savannah (Ga.), Charleston (S.C.), and Norfolk (Va.) because Southeast Florida is considered too far away from major U.S. commerce centers to be viable for businesses serving the eastern half of the country.
Cernak said he does not look to compete with Miami for vessel calls, and noted that all Florida ports work closely with the state to support its competitive position. Port Everglades does not receive any direct local tax revenue. Cernak added that both ports' limited footprints—Miami handles fewer TEUs than Port Everglades—mean that one will not disproportionately gain at the expense of the other. "I can't assume all of Miami's business, and they can't assume all of mine," he said.
Cernak said he's happy Miami has achieved the supposedly magical 50-foot water depth status to accommodate near-full or fully laden megaships. "I applaud them, and I'm coming right behind them," he said. "The winners will be South Florida businesses and consumers."