The port of Miami’s new foreign trade zone, featuring a planned World Trade Center complex, represents an opportunity for Chinese multi-nationals to display goods “for the entire market of the Americas,” says port publicity.
Miami claims to be the center of trade and commerce for Latin America as well as the southeast United States.
“We are much like Hong Kong in our trade patterns. A significant amount of the port of Miami’s international trade is re-exporting trade bound for Latin America,” said the port’s Assistant Director, Kevin Lynskey.
Miami claims to be like Hong Kong – a gateway city to respective regions.
Miami is already a sister port to the port of Shanghai, because earlier this year they signed a sister port agreement with the port of Kaohsiung in Taiwan, further reinforcing economic ties between Miami and China.
Economic ties deepen with the harbor
While the Panama Canal is expanding with a third set of locks, Miami is deepening its harbor to 50 feet for fully laden mega-ships (8,500 to 13,000 TEUs), commonly known as Super post-Panamax ships. “For the first time they will have direct access to the southeast United States,” says the port.
Miami also says it will be the only port south of Norfolk, Virginia, able to accept these ships fully laden.
Along with the “Deep Dredge,” Miami is undertaking a $2 billion public and private investment in infrastructure improvements, including a port tunnel serving as a dedicated roadway connector linking port facilities with Florida’s interstate system.
Port of Miami publicity says “on-dock intermodal rail will ease ship-to-rail container transport. The Florida East Coast Railway (FEC) provides seamless connections to major national railroads, enabling goods to reach 70 percent of the US population within one to four days and to southeast US markets before a ship can even arrive at ports north of Florida”.
Miami and FEC are currently engaged in an aggressive joint marketing strategy, focused not only on shipping lines, but also on manufacturers, exporters, importers, 3PLs, supply chains, freight forwarders and Custom house broker companies for the greatest market penetration.
“Several major companies have worked with Port Miami and FEC on pilot import container test programs and have been very pleased with the service, even prior to the completion of the harbor dredging and on-dock rail projects,” said David Banfield, director of sales and port development for the Florida East Coast Railway.
Port Miami as a key for America-Asia bilateral trade
Miami also claims to serve as an efficient gateway for goods bound for Asia with 55 percent of the port’s cargo trade being export-driven. Miami and FEC authorities say they agree that Miami’s import/export trade with China is expected to double over the next decade.
The port says several large Pacific trade carriers are courting Miami for a long-term access agreement for Port Miami’s largest cargo terminal, according to Lynskey. Miami has been approached to work with Chinese business interests as a principal access point for Asian imports into the southeast United States. The proposal incorporates a massive mid-state rail-served logistics park for distribution of Chinese-made products, as well as related light manufacturing activities. Under consideration is a dedicated on-port office tower for Chinese multi-national firms (‘China 1’) located in the middle of a downtown Miami World Trade Center complex.
“Match made in heaven”
“Free Trade Zones and Miami are a match made in trading heaven, whether the goods were made in America or imported from China and stored in an FTZ for re-export,” Lynskey said.
Asian exporters shipping into Port Miami will not be required to pay US import duties, as long as the goods are heading from one foreign country to another. The port plans to set up satellite zones that would allow companies to have FTZ benefits in their own secure warehouses.
Flagler’s South Florida Logistics Center is within the FTZ and enables companies to put warehouses, distribution centers and trans-load operations on site, where movement of containers from the rail to the facility would not have to go out onto a public highway, according to Hertwig.
According to the US Customs and Border Protection guidelines, the following are advantages for conducting business in a foreign trade zone:
While in the zone, merchandise is not subject to US duty or excise tax, and duties may be paid at the time they are transferred to the US market for consumption.
Goods may be exported from the zone free of duty and excise tax.
Merchandise may remain in a zone indefinitely, whether or not subject to duty.
Manufacturing and assembly is allowed within a zone. A zone user who plans to send the merchandise into the US market may normally elect to pay either the duty rate applicable on the foreign material placed in the zone or the rate applicable on the finished article, whichever is most advantageous.
“When factored in that Florida is the fourth-largest state economy in the United States, that it houses more than 19 million residents, and more than 85 million out-of-state residents annually visit, it is clear that Port Miami is well positioned to be the first port of call for ships carrying goods to and from Asia,” says the port.
Port Miami says it is among America’s busiest ports and is recognized across the globe with the dual distinction of being the “Cruise Capital of the World” and the “Cargo Gateway of the Americas.”
The report was posted on September 21, 2012 in China Briefing prepared by Dezan Shira & Associates, a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia.
This post is also available in: Spanish