'Urgent need for ships to start sailing again': FMC report on Florida

CRUISE FMC Commissioner Louis Sola.jpg
'The financial consequences of laid-up cruise ships are being seen in government coffers and the pockets of working men and women,' Federal Maritime Commissioner Louis Sola said
The economic impacts of COVID-19 extend to port authorities and cities throughout Florida with canceled cruises resulting in loss of revenue to public ports, government at all levels and private companies that do business with cruise lines.

These conclusions are contained in the latest Fact Finding 30 report released today by Federal Maritime Commissioner Louis Sola. His interim report examines the direct and indirect economic impacts on Florida ports including Tampa, Key West, PortMiami, Port Everglades, Port Canaveral and Jacksonville. 

Importance of cruise industry confirmed

Sola said his interviews with port directors, government officials and business leaders all confirm the 'importance of the cruise industry to Florida’s economy and the urgent need for ships to start sailing again.

'The financial consequences of laid-up cruise ships are being seen in government coffers and the pockets of working men and women,' he continued. 'Across Florida, people recognize the vital necessity of the cruise industry contributing to the economy again. Toward that end, port authorities throughout the state are acting unilaterally and aggressively to establish protocols for safely handling passengers and vessel operations. Public and private interests at the local and state levels are united in establishing a responsible framework for safe resumption of operations.'

Impacts on some major ports

With cruising suspended through October, PortMiami estimates a revenue loss of approximately $55m in fiscal 2020. Port Canaveral did not specify an impact but is heavily dependent on the cruise industry, sourcing 78% of its revenue from the sector.

At Port Everglades, where business is more seasonal, the port had collected around three-quarters of its expected revenue from the cruise industry for fiscal 2020 by the time of the Centers for Disease Control and Prevention's no-sail order. For fiscal 2021, Port Everglades projects modest cruise revenues, anticipating 30% capacity during December 2020-June 2021, and 50% capacity during July-September 2021.

Steps to resume operations

As part of his report, Sola chronicled steps each port is taking to resume operations, including measures to protect passengers, crews, longshoremen and others from exposure to COVID-19. These include issuing personal protective equipment to workers, enhanced sanitization of terminals, establishing an on-port triage center to assist cruise partners (PortMiami), managing arrivals and departures to reduce congestion and reconfiguring facilities to allow for health screening/COVID-19 testing.

Sola’s report, based on information from interviews and research, also highlights the extent to which associated industries benefit from cruise passengers. People traveling to Florida for a cruise purchase goods and services before and after their sailing. Sectors of the economy that benefit from cruise tourism include hotels, restaurants, bars, ground transportation companies, recreation facilities, the arts, entertainment and retail.

Small businesses impacted, too

'It is not just large companies that benefit from the cruise industry,' Sola said. 'Cruise customers begin and end their voyages by using taxis, eating in restaurants, visiting museums and shopping in local businesses. These are small and medium-sized businesses, many are independently or family-owned. The cessation of cruise operations can affect them as much, or more, as it does the companies that operate the ships or the ports where the vessels call.'

Ports that also serve ocean cargo customers are not insulated from the impacts of COVID-19. In some, the cruise business accounts for a larger percentage of revenue than cargo. In addition, diminished consumer demand has contributed to lower volumes of containerized freight.

The full report is here.

Fact Finding 30 is ongoing and will next focus on Alaska and the Northwest US.

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