Florida Governor Fails to Make Big Splash at Ports

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Florida Gov. Rick Scott has big plans for an L.A. fishing trip scheduled for next month, but it looks like he might be bringing the wrong bait – and fishing in the wrong place.

Trying to lure importers and exporters to leave the ports of Los Angeles and Long Beach in favor of harbors in the Sunshine State, Scott sent a letter earlier this month to some of the biggest customers of the local ports and invited them to meet him in Los Angeles on April 12. He’s hoping to boost Florida’s cargo business as an expanded Panama Canal, set to open early next year, opens the possibility of Asian goods being imported directly to the East Coast.

But Scott’s letter and upcoming trip have left local trade and shipping experts scratching their heads. For starters, they wonder why Scott has invited mostly big national firms, including Wal-Mart Stores Inc. and Target Corp., to meet him in Los Angeles instead of trying to hook those firms in their home states.

What’s more, several local executives don’t think Florida’s 15 ports can handle the kind of cargo volume that passes through the much larger L.A.-Long Beach port complex. And they say Florida doesn’t have nearly enough of the supporting infrastructure – rail lines, train yards and warehouses – needed to store and move cargo efficiently. Florida’s bait, they said, just isn’t that attractive.

John McLaurin, president of the Pacific Merchant Shipping Association, a San Francisco trade group representing shipping companies and terminal operators serving the West Coast, said cargo owners use the ports that make the most sense for them, and a marketing push from Scott will do little to convince anyone to disrupt their supply chains.

“If it doesn’t make economic sense for a cargo owner, the governor can come out and hold all the receptions he wants in L.A.; he can’t overcome the cost differences, or the laws of physics, and he’s going to be out of luck,” McLaurin said.

Scott’s letters was sent to about 30 companies, including Wal-Mart, Target and Irish produce grower and shipper Fyffes, inviting them to an L.A. reception.

The letter highlights Florida’s $850 million in funding for new port infrastructure and the capacity of its ports to handle much more containerized cargo than they do today. Last year, 3.1 million containers passed through Florida’s 15 ports. (That’s less than half of the 6.8 million containers that moved through the Port of Long Beach alone last year.)

Scott’s letter also referenced the monthslong labor strife that recently jammed up West Coast ports, and noted that Florida is a right-to-work state, which means workers cannot be forced to join unions and unions are generally less powerful.

“Florida ports are undoubtedly a solution to this problem,” Scott wrote.

The letter also pitches Florida as a state with lower taxes, fewer regulations and a generally friendlier atmosphere for businesses.

Joining Scott on his trip next month will be Bill Johnson, Florida’s secretary of commerce; a former director of PortMiami; and chief executive of Enterprise Florida, a public-private economic development partnership that is funding the trip.

Johnson said he and Scott are coming to Los Angeles now to advertise the expected midsummer completion of the Miami port’s dredging project, which will deepen the main channel to between 50 and 52 feet – deep enough for the larger container ships that will be able to pass through the Panama Canal once its expansion is completed next year.

“For the state of Florida, that’s a strategic advantage,” Johnson said. Additionally, the port has a tunnel that connects it to interstate highways with no traffic signals, automatic cranes to unload and load cargo, and on-dock rail lines.

He said port officials stay up to date on what’s going on at other ports around the country and wooing them is a common effort.

“We’re all friends, but we all compete,” Johnson said.

But McLaurin said most of Florida’s pitch rings hollow. He said importers and exporters don’t care about Florida’s regulatory environment or tax code, but rather about how to get cargo to their customers as quickly and cheaply as possible.

“How are you going to make my life easier and simpler and more cost-effective to do business through Florida ports?” McLaurin asked. “That’s what I’m going to be interested in.”

On those points, Florida has some big disadvantages, including a lack of warehousing and distribution space, he said.

“You don’t have the need for the warehouse and distribution (in Florida) just because the volume doesn’t exist there as it does in Southern California,” he said.

Jock O’Connell, an international trade economist at Beacon Economics in Los Angeles, said Florida and other eastern port states have spent lots of money updating infrastructure in anticipation of the Panama Canal expansion, but he expects that investment won’t pay off.

“No one in the maritime industry is expecting a host of goods moving from West Coast to East Coast,” O’Connell said, estimating that perhaps 5 percent of goods now going to the West Coast might instead go through the canal to eastern ports.

“There have been billions spent up and down the East and Gulf coasts to expand capacity to get ready for this and not everybody is going to win,” he said.

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