Samsung taps liner service from Mexico to Miami to avoid border

Reynolds Hutchins, Associate Editor | Mar 14, 2016 6:08PM EDT



LONG BEACH, California — A new all-water container service moving Samsung products from Mexico through the Port of Miami to the Southeast is providing some shippers a cheaper and faster option, shaving off roughly half the time and a quarter of the cost from traditional trucking cross-border options.

It’s not just the next chapter for Miami, port officials say, it’s the next chapter for North American free trade: an all-water route that eschews costly and time-consuming transits at the U.S.-Mexico land border.

“Everyone says, ‘What’s next with NAFTA?’ The next highway for NAFTA is an all-water route,” Eric Olafson, Miami’s manager of trade development, told JOC.com at the 16th annual TPM Conference in Long Beach. “It’s hard to conceptualize, because people are so focused on trade with Mexico that goes across the (land) border and we’re coming out with a new route.”

Since November of last year, Miami has hosted a weekly SeaLand Marine service, importing Samsung electronics out of Mexico’s Port of Veracruz, said Miami Port Director Juan Kuryla. It includes roughly 25 to 35 forty-foot-equivalent units each week of televisions, phones and a variety of electronic products manufactured south of the border, Kuryla said.

It takes roughly four days, at most five, for the cargo to move from the manufacturing hub in the Valley of Mexico to Samsung’s distribution center in Jacksonville, Florida, Kuryla said. After a two-day transit by sea, the electronics arrive in Miami and are transited overnight to the Samsung distribution center in North Florida via Miami’s new on-dock Florida East Coast Railway service.

“If it leaves by 11 o’clock, it’s in Jacksonville the next morning,” said Olafson.

According to Olafson, the all-water route saves roughly four to five days of transit time and about 25 percent of all-inclusive costs versus traditional routes moving goods across the U.S.-Mexico land border. And those ships don’t head back empty-handed, he said.

“We’re evenly divided, the Port of Miami, imports and exports. So, those ships are picking up product that’s headed back to Mexico, too,” Olafson said.

That includes waste paper, furniture and consumer goods Miami is exporting to Latin America.

Samsung is the only shipper using the all-water service, for now, port officials said. Despite a slow economy, Mexico remains a manufacturing powerhouse. It is the leading exporter of domestic appliances in Latin America and the sixth largest in the world.

Kuryla and Olafson said they hope the Samsung service will prove to be a successful pilot for future all-water import services.

“We’re going to try and piggyback off this,” Kuryla said. “If it’s working for Samsung, why shouldn't it work for someone else doing something similar, or even other industries?”

Kuryla said the port will be joining a Florida trade mission to Mexico in May and hopes to make some progress on that front.

But Miami has spent the last year on a trade mission of sorts, positioning itself as a major gateway for U.S. imports of all kind. It’s a vision emboldened by the port’s new FECR on-dock rail service, a new tunnel leading to Florida’s interstate highway system, 50-foot harbor depths and multiple rail departures per day.

There is still debate over how successful Miami will be in becoming a major gateway for Asia imports destined beyond the Florida market. Port officials, though, have indicated their 2015 import volume is evidence that the answer is a resounding, “Yes.”

Container traffic at the Port of Miami jumped 20 percent in January, beating out U.S. Southeast competitors in Charleston and Virginia, which saw traffic flatline in the first month of the year.

The Port of Miami ranked third on JOC.com’s list of the top 10 fastest-growing U.S. import ports for 2015. The gateway handled roughly 409,346 import 20-foot-equivalent units last year, up 18.86 percent year-over-year.

But, it’s more than just a pitch for Port Miami, Olafson and Kuryla said. All marine gateways with access to Latin America stand to benefit from an all-water cross-border service, they said.

U.S.-Mexico cross-border trade along the land bridge is costly and time-consuming, the men said. It played a significant role in the first two decades after the North American Free Trade Agreement went into effect if only because it was the way shippers were used to moving their goods.

The proximity of southern U.S. ports to manufacturing in Mexico makes an all-water cross-border service cheaper and more efficient, Olafson said.

It may be a new idea, but Miami has been a proving ground.

Port officials’ arguments in favor of an all-water service echo the arguments they’ve made for years that Miami could evolve into a major U.S. import gateway. Port officials in South Florida know something about pitching what seems like a wild idea to the industry.

“It’s something that takes time,” Kuryla said. “No one wants to be the first one who tries something new. Once something happens and it works, our expectation is, on other people seeing the success of this route, and it’s been very successful, they’ll jump on it.”

http://www.joc.com/port-news/us-port..._20160314.html