Port Everglades steams ahead

Good management, location and diversification have given Port Everglades a banner year.

Posted on Sun, Feb. 03, 2008

By INA PAIVA CORDLE

icordle@MiamiHerald.com

Port Everglades is coming off one of the most successful years in its history and has big plans, despite facing challenges on economic and environmental fronts.

It's a Friday afternoon at Port Everglades and dockworkers are busy off-loading containers from a huge CCNI cargo ship that has just arrived from South America. Trucks are lined up to deliver and pick up freight. Cruise passengers are toasting on the pool deck of the Regent Seven Seas Navigator before departing for a week-long tour of the Caribbean and Mexico.

The hustle and bustle is palpable, as the growing Broward port leaps ahead to rank as the largest container cargo port in Florida in 2007, and -- it expects -- become the No. 1 cruise port in the world in 2011.

'We have basically opened our eyes and said `Why not be the biggest and the best?' '' said Port Director Phillip C. Allen.

Port Everglades is coming off one of the most successful years in its history and has big plans, despite facing challenges on economic and environmental fronts.

CARGO AND CRUISES

In fiscal 2007 the port reported a surge in profit, up 50.5 percent to $14 million, on sharply higher container cargo volume and slightly more cruise passengers.

Added bonuses during the year: the Broward County Commission's approval of the port's 20-year master plan and a deal reached with Royal Caribbean Cruises to base its two new Genesis ships -- which will be its largest -- at the port when they are completed in late 2009 and 2010.

Although the Port of Miami has not yet released its 2007 figures, Allen claims the Broward port surpassed Miami in cargo container volume for the first time. Increased volume from Florida International Terminal's Hapag-Lloyd, which moved from the Port of Miami last year, and Hamburg Sud, which had relocated in 2006, as well as Florida Transportation Services' Seafreight and Crowley Liner Services contributed most to the growth.

''The port as a whole is probably doing things completely different than other ports in terms of customer satisfaction,'' said Jose Diaz, vice president and general manager of Florida International Terminal, the second-largest cargo terminal at the port, after Crowley Liner Services. ``In my opinion that is the key element to why so many people decided to move their operations from Miami up here.''

With most of its cargo coming to and from the Caribbean, Central America and South America, Port Everglades says it is the leading port in the United States for Central America.

High above the port, the harbormasters, who guide ships from a tower nine stories high, have seen the heightened pace firsthand.

''On weekends we have more ships than we do docks and cranes,'' said Shawn McCann, assistant harbormaster at Port Everglades.

I-595 AT THE DOOR

Port Everglades, Allen said, owes its burgeoning success to a range of factors, including its location, which makes it easy for truckers to get on and off the expressway and for passengers to arrive and depart from nearby Fort Lauderdale-Hollywood International Airport.

''I give kudos to whoever designed [Interstate] 595 to enter into our front door,'' Allen said.

Contrast that with the Port of Miami -- where truckers complain about delays due to congestion, traffic and construction.

''Thank goodness the local community has done a much better job with Port Everglades,'' Allen said. ``They have not abused Port Everglades the way the Port of Miami has been abused by the city and by Miami-Dade County. They took an asset and basically built walls around it and now the taxpayers will have to pay $1 billion to overcome that abuse.''

Port Everglades' diverse mix -- a combination of container cargo, cruises, petroleum and bulk cargo -- is also a key strength, insiders say.

''It offers a significant cushion against an industry being severely impacted by facts outside our control,'' said Carlos Buqueras, director of business development for the port.

While bulk cargo like cement, as well as lumber and steel, are down due to the housing slump, for example, container cargo and petroleum -- both gas and jet fuel -- remain strong. In Florida, the only other ports with petroleum terminals are Jacksonville and Tampa.

''We don't think that there is a port that can compete with us'' in terms of diversity, Allen said.

Another plus for Port Everglades: The stevedoring work force is a combination of the International Association of Longshoremen, Teamsters and nonunion workers, which ''allows shipping lines to have a choice,'' Buqueras said.

SHIPS MEAN JOBS

Meanwhile, Port Everglades' growth is translating to more jobs. With more cruise and cargo ships, the International Association of Longshoremen now has 800 workers at Port Everglades -- up 300 in two years, said Mike D. Payne, president of the union's local #1526.

''My local is now employing more personnel than we have in the history of the organization,'' he said.

At the same time, Port Everglades is poised to boost its passenger count with the arrival of Royal Caribbean Cruises Ltd.'s Genesis ships, which it says will catapult it ahead of the Port of Miami to be the largest cruise capital of the world.

The ships, which will dock year-round, also will help the port reach its goal of extending beyond its dominant season of November to April. As part of the deal, the port is spending $37.4 million to expand Terminal 18, with the funding coming from $5.70 in port fees per Royal Caribbean passenger from now until the full amount is reached.

The cruise line, whose deal allows for further growth by including preferential berthing rights to two berths seven days a week, chose Port Everglades because it offered the most opportunity, said Juan Trescastro, vice president of port operations for Royal Caribbean Cruises Ltd.

''Port Everglades has the potential for more growth and came up with a really nice deal for both parties,'' he said.

Port Everglades is hoping that Carnival Cruise Lines will base its newest, biggest ship -- the Carnival Dream -- at the port year-round, when it comes into service in late 2009.

Carnival is in the midst of ''early-stage'' discussions with both Port Everglades and the Port of Miami to base the ship, which holds up to 4,631 passengers, said Roberto Martinoli, executive vice president of operations for Carnival Cruise Lines.

The decision will depend on which port can offer the best facility, equipped with all the necessary features, as well as the best deal financially, he said.

''We have three months to make up our minds,'' Martinoli said.

Even more vital to the port's continued growth is its master plan, approved by the County Commission in December -- though it will hold a workshop later this month to address environmental concerns.

Broward Commissioner Josephus Eggelletion Jr. was a proponent of the port's expansion.

''It doesn't make any sense for goods being produced in Central America or South America or in Dominican Republic factories owned by U.S. companies to bypass Port Everglades to go to the Port of Savannah or Charleston and be trucked down to us,'' he said. ``The port equals jobs.''

PLAN FOR GROWTH

The $2 billion plan provides capacity to meet projected demand, with more and bigger berths, expanded cruise terminals to handle larger vessels, additional cranes, and a deepened harbor from 44 feet to 49 feet. It also will add parking garages, a facility for imported aggregate rock, a dockside railroad, roads and other enhancements. Funding will come from port revenue, private investment and bond debt, as well as grants.

''The key to operating a port is efficiency,'' Allen said, ``to have the capacity to berth the ships, the cranes to get containers off vessels and the equipment for yards to move the containers to get on the trucks to get to roads.''

GOOD MANAGEMENT

Port tenants also point to Allen's management as key to the port's success. Since being named to the position in February 2006, he has spearheaded the port's growth and plans for its future.

''He has done an excellent job at keeping the port community apprised of all that is going on at the port, and a masterful job at keeping us updated and involving us in the master planning process, more than I have ever seen before,'' said Mike Hopkins, vice president of operations for Crowley Liner Services -- Latin America.

With a background in city and county government, including spending 20 years working for Broward County, Allen also knows how to translate the port's needs to the County Commission, port users said.

''He has skills that everybody trusts,'' said Margaret Kempel, executive director of Port Everglades Association, a trade association of businesses based at the port. ``And that made a difference going into this master plan.''

Allen developed a love for the waterfront when he was a child in Ohio, summering at his family's cottage on a lake. He was a lifeguard in college and spent a couple of years in the Navy. He owns a 30-foot Cruiser that he takes out every weekend ``to get away.''

Allen said he considers himself a hands-off manager, though those who work with him say he is hands-on, but not a micromanager.

THE ENVIRONMENT

Part of his job is dealing with the port's continuing challenges: competition, market and trade balance shifts, a potential recession, as well as challenges raised by environmentalists and special interest groups.

The Marine Industries Association of South Florida, for example, wants more space for megayachts. Currently, the port accommodates some larger megayachts, requiring deeper water, for short-term dockage and fueling. And the master plan allows for a five-acre parcel for a recreational marine facility on the Dania cut-off.

''Our position is very consistent,'' said Frank Herhold, executive director of the 800-member association. ``The economic benefits of megayachts justify making some accommodations within the port.''

Meanwhile, environmentalists are concerned about the impact of the port's expansion on manatee habitats and mangrove wetlands.

Part of the port's plan is to widen and deepen the turning notch -- the space where ships turn around, which is an area that is a conservation easement. The easement was set up in the 1980s to protect lands from further damage from port expansion, and the area is in a protected manatee habitat, said Lisa Baumbach-Reardon, conservation chair, Broward County Audubon Society.

The destruction of mangrove wetlands and coral reefs due to dredging is also deeply worrisome, she said.

''In Broward County, we have lost probably 80 percent of our mangrove habitat over the past 20 years due to development,'' Baumbach-Reardon said. ``So at some point we have to draw a line in the sand and say we cannot let this continue.''

GROWING COSTS

Security also continues to pose a challenge for Port Everglades, as it does at every port. Port Everglades, which spent about $4 million a year before 9/11, now spends $20 million a year. But while the Port of Miami has had to pay a great deal of police overtime, Allen said Port Everglades hasn't had that issue.

Still, competition remains tough, as Port Everglades competes with other ports not just in Florida, but along the East Coast, as well as Freeport, Bahamas. Though the Port of Miami is high on that list of competitors, both Allen and Miami's Port Director Bill Johnson refer to the other's port as ``friendly competitors.''

Both directors travel extensively, meeting with shipping line executives to try to boost cargo business. Last year, Allen went to Chile and Brazil, and China the previous year.

''If they surpassed the Port of Miami last year, I'm going to surpass them this year,'' the Port of Miami's Johnson said in response to the port's cargo claim. ``My job is to grow the business, and we are hard at work at that.''

This year, Port Everglades hopes to add more container business with the addition of Antillean Marine Services, which recently moved much of its operations from the Miami River; MSC's transshipment to the Bahamas; and expansion of other lines. The port's goal is to reach 1 million TEUs -- 20-foot equivalent units, a common measurement in the industry -- up from 948,680 in fiscal 2007.

And it is looking to lease an unused tank farm owned by the port, offering incentives for alternative fueling like ethanol or biodiesel.

A group from the Brazilian company Equipav toured the port recently, considering making a proposal.

''They are looking at it as a potential port for the importation of ethanol,'' said Craig Ash, general manager of CEPEMAR Environmental Services in Boca Raton, which is helping Equipav explore options.

OPERATOR LEAVES

But Port Everglades also is losing one of its 10 terminal operators, since Universal Maritime Service -- a subsidiary of Maersk -- has opted to consolidate its shipping at the Port of Miami.

In 2007, the company contributed $4.3 million in port revenue, which included $674,529 for a land lease, $1,179,744 for Maersk cargo revenue and $2,458,018 in third-party cargo revenue. The company must still pay its lease and minimum guarantee, totaling $2.6 million for each of three years.

Port spokeswoman Ellen Kennedy said the port expects some of the third-party service to be absorbed by other lines, by a new service or by existing operators expanding their terminals.

''It's an opportunity to relocate existing operators and attract new business,'' Allen said, ``to accelerate our master plan.''

He sees a need to continue to improve and build on the port's success.

''The port in the past has not done an adequate job of planning its future. We didn't know what our demand would be in 20 years,'' Allen said. ``Now we have a plan.''