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Sunday, October 25, 2020

Maritime Logistics Professional

September 23, 2020

Cruising Pause Has Major Impact on Florida's Economy

© Tamme / Adobe Stock

© Tamme / Adobe Stock

The cruise industry has certainly been among businesses hardest hit by the economic impacts of COVID-19. But the industry-rocking fallout extends well beyond the cruise lines themselves, extending through cities throughout Florida where canceled sailings are 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 that was released today by Fact Finding Officer Commissioner Louis E. Sola, of the Federal Maritime Commission. The Interim Report examines the specific direct and indirect economic impacts on Florida ports from Key West to Jacksonville and on the Atlantic and Gulf Coasts.

"The interviews I have conducted 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. Across Florida, people recognize the vital necessity of the cruise industry contributing to the economy again," Commissioner Sola said.

As part of his report, Commissioner Sola chronicles specific steps each port is taking to resume operations, including what distinct measures will be instituted to protect passengers, crews, longshore and others from any potential exposure to COVID-19 or other pathogens.

"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," Commissioner Sola said.

Commissioner Sola’s report, which is the product of information developed via interviews and research, also highlights the extent to which associated industries benefit from cruise passengers. Individuals traveling to Florida to take a cruise voyage purchase goods and services both pre- and post-sailing. Sectors of the Florida economy not directly tied to cruise lines but benefitting economically from the industry include hotels, restaurants, bars, ground transportation companies, recreation facilities, the arts, entertainment and retail.

"It is not just large companies that benefit from the cruise industry. 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," said Commissioner Sola.

Ports that also serve ocean cargo customers are not insulated from the impacts of COVID-19. Not all Florida ports serve both cruise and cargo businesses. Furthermore, in some ports, the cruise business accounts for a larger percentage of revenue than cargo. Finally, diminished consumer demand has contributed to lower volumes of containerized freight transiting gateways.

Florida ports that do handle cargo are also seeing lower export volumes. A significant amount of the cargo shipped from Florida to Caribbean ports supports the cruise industry in those foreign ports of call.

The Interim Report issued Wednesday is the latest update by Commissioner Sola on his work as the Fact Finding Officer for Fact Finding 30. In June, he issued an Initial Report which examined licensing and financial responsibility requirements. He followed that with an Interim Report issued in July that reviewed cruise line refund policies.

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