Port Manatee officials hope to ship for Amazon distribution center

twhitt@bradenton.comNovember 10, 2013 

MANATEE -- Having Amazon locate its Ruskin warehouse just 10 miles from the port offers shipping opportunities for the port and economies of scale for any other big box retailers who want to build a nearby warehouse.

"It's a real opportunity for the port," said Rick McAllister, CEO of the Florida Retail Federation. "If I was them I'd be licking my chops."

Once big box retailers see the benefits of locating near a specific port -- and Amazon may be the lens through which they see those benefits -- then they begin analyzing those benefits for their own companies.

Port Manatee officials are encouraging that as they work to diversify business around the port, once known mainly as a hub for construction materials, produce and fertilizer.

In recent years the port, which is surrounded by 10,000 acres of vacant land, has been working to attract diverse businesses. They have brought in Air Products, an energy company, and Pasha Automotive, which has led to discussions with other automotive companies. They have already signed a deal with Tramontana which will bring the parts for its million-dollar cars through Port Manatee and then truck them to a factory nearby.

The port is perfectly situated geographically to pitch for a share of the shipping traffic generated by large commercial distribution centers, such as Amazon's new 1 million-square-foot facility planned for Ruskin, said Carlos Buqueras, the port's executive director.

"Amazon is the perfect poster child for others who say: 'Amazon did their homework, 10 miles from the port. Gee, it sounds like an opportunity for us to study what we can do here' for Walmart, Kmart, JCPenney, and others because they seem to go in herds, you know," said Buqueras.

Big box companies tend to cluster distribution centers in one area because they use the same shipping and trucking firms and have the same consumer base, Buqueras said.

Aaron Ellis, public affairs director for the American Association of Port Authorities, said Amazon is choosing its spot because it's at a great crossroads. It's near two ports, putting it "in the cat bird seat," Ellis said.

"Ports are always looking to reduce costs by increasing cargo volume," Ellis said. "When a port is able to get a big box retailer like Amazon as part of their mix, it's an opportunity to create economies of scale."

Having more retailers will mean that the port can attract more cargo ships and offer better shipping prices and faster delivery, making the port more attractive to other businesses, including other big box retailers.

"The port would be the attracter," McAllister said. "If the retailer decided to bring goods in through that port, that's a value. There has been a lot of work by port authorities to try to incentivize more retailers to come in through Florida ports rather than Savannah. When you do get a large retailer, the logistics work so that more retailers will be coming into that port."

Rick Blasgen, president and CEO of the Council of Supply Chain Management Professionals, said Amazon chose its Ruskin location in part because of its access to two ports, Port Manatee, just 10 miles away, and the Port of Tampa.

He said Amazon was well aware of Port Manatee's expansion efforts, its proximity to railroads and the interstate before it decided on its location.

"Amazon is strategically placing their distribution centers around places where they can get to markets," Blasgen said, "When you think of a company like Amazon, they distribute things like wholesalers -- it's more than books and light bulbs -- and they have the scale to do it."

Because Amazon has a huge distribution arm, it is looking for a port that has the capacity to quickly load and unload cargo. If they can get the container off the ship, loaded quickly and to the warehouse, Blasgen said, that's going to be the port that gets the business.

Amazon is expected to create 1,000 jobs in the South Shore area of Ruskin near State Road 674 and Interstate 75, and invest up to $200 million in a massive state-of-the-art facility. Of the 1,000 jobs, 375 would be "higher-wage quality jobs," officials said, with average annual pay of $47,581. Amazon, based in Seattle, also recently confirmed plans for a second, similar warehouse, about an hour away at Lakeland in Polk County.

Carol Whitmore, the chairwoman of the Port Authority, said Port Manatee's proximity to I-75, a straight shot to Interstate 4, will give it an advantage over the Port of Tampa as it competes for Amazon's business.

Richard Sharpe, CEO of Competitive Insights, an Atlanta-based company that helps corporations find places perfect for handling freight, said companies are looking for more efficient ways to transport goods, while reducing their carbon footprint. That means companies are using West Coast ports less, as they ship goods to East Coast ports and truck them shorter distances or put them on trains headed to the Midwest.

"Intermodal traffic, moving by train is increasing tremendously," he said. "When you look at sustainability questions and the carbon footprint, rail becomes attractive."

McAllister said in Savannah there are about 15 million square feet of big box retailers near the port.

"They were not there 20 years ago," McAllister said. "That has made the port of Savannah the second largest on the East Coast."

That bodes well for Port Manatee.

"Amazon could have located in Jacksonville or Tampa," McAllister said. Being 10 miles from Port Manatee "has to make good sense for them logistically."

Toni Whitt, business editor, can be reached at 941-745-7087. Follow her on twitter @toniTwhitt.

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