Every inch of Miami-Dade may soon be covered by a foreign trade zone, helping participating businesses become more price-competitive in the international freight trade, a key element of the county’s economy.
Today the northern half of the county is in an area overseen by PortMiami, which began in 2012, placing many businesses in the southern half at a competitive disadvantage with more than 21.5 million square feet of industrial space.
On Monday, the county’s PortMiami and Environmental Resilience Committee took the first step toward spreading the funds around, authorizing Mayor Daniela Levin Cava to submit a request to the U.S. Department of Commerce’s Foreign-Trade Zone (FTZ) Board. Voted to allow the port-administered area to expand to cover the entire county.
In a foreign trade area, companies may import goods or parts, manufacture or reconfigure them, then export them without paying normal customs duties.
A memorandum from the mayor to the commissioners stated that the zone expansion “will allow for greater growth opportunities by substantially increasing the number of current and future Miami-Dade businesses that may seek the FTZ designation.”
“The need for quick and efficient FTZ site designation in Miami-Dade County has proven to be in high demand,” says a letter to the federal agency by County Chief Operating Officer Jimmy Morales. “As administrator of FTZ 281, PortMiami has sponsored more than 100 designated sites and four magnet sites. According to the 2021 Annual Report of the Foreign-Trade Zones Board, FTZ 281 ranks 11th among all US FTZs in export activity Is.
While the county has two other FTZ grant recipients, Mr. Morales said, “FTZ 281 has the unique advantage of being administered by PortMiami and working closely with Miami International Airport. These entities are the two most important economic engines in Miami-Dade County and greatly influence international trade.”
The application for FTZ expansion said PortMiami’s trade stood at $75.6 billion in fiscal 2021, with China accounting for more than a fifth by volume. Six of the port’s other nine top trading partners are in Latin America and the Caribbean, worth $28.4 billion.
Miami International Airport handled a record 2.75 million tonnes of freight last year, up 82% of the international volume.
“The expansion of FTZ 281,” the application says, “will greatly help promote more distribution, warehousing and manufacturing activity and jobs.”
Real estate advisory firm CBRE says distribution and warehouse space is already at a premium here, with leasing rates rising 35% since the start of the pandemic. As demand for space accelerated during Covid, the tight market sent rents to an all-time high, only up 10% in the third quarter.
But in the southern end of the county, which would benefit most from a countywide FTZ, the average asking rate for industrial space is the county’s lowest at $13.15 per square foot, CBRE figures show, well below the county average of $14.65. . The highest is $18.50 in the airport area, which is now the heart of the county of international trade.
One of two FTZs in the county that are not part of the port-administered area is South Dade, which is run by the region’s Vision Council promoting business development. The federal application says the council president will work with the expanded PortMiami region “because this grantee does not have the internal capacity to market its area and promote business.”