March 18--As Alfonso C. Rey, founder and chairman of Centurion Air Cargo, tells it, he moved to Miami from Argentina in 1986 with $7,000 in his pocket and "zero -- negative 10 percent" knowledge of English.
His punchline: "Today, I have less than $7,000."
Belying his remark: Rey, 51, has just moved his Miami-based air-cargo business into a new 800,000-square-foot facility on prime land at Miami International Airport. The highly automated, state-of-the-art center at 4500 NW 36th St. should enable Centurion to save time and money over the scattered locations it previously occupied at MIA and offers huge room for growth.
Centurion is hiring. Its fleet is growing. And the company is eyeing new markets, some of them beyond its U.S.-Latin America stronghold.
Yet Rey's quip about finances hints at the perilous nature of the air-cargo industry, a cutthroat arena of razor-thin margins that is shaped largely by outside forces from the economy to the weather to labor relations to politics to war.
Investor Warren Buffett's famous line -- "How do you become a millionaire? Make a billion dollars and then buy an airline" -- is equally fitting to the cargo side of the aviation business.
For years, the air-cargo industry has been plagued with too much capacity chasing too little business. Jet fuel -- the single largest cost, currently consuming more than 40 percent of expenses -- is essentially beyond management's control. Since the terror attacks of Sept. 11, 2001, security costs have skyrocketed and regulations are tough.
Last week, a shipment of horses from Miami to Caracas was postponed after the death of Venezuelan President Hugo Chavez held up paperwork. When Chile's salmon industry suffered production woes several years ago, it crimped shipments of fresh fish to Miami. Volcanoes, earthquakes, hurricanes all mean delays and missed opportunity.
"Everything that affects your life every morning affects our business," said Rey, who built his privately held cargo business through a series of acquisitions, some in bankruptcy-court proceedings. He has bet heavily on Miami's place as the gateway to Latin America, a position that has blossomed fully in recent years.
"I've always believed in Miami," he said. "Now, we are the geniuses: Miami is the center of the planet."
Miami International Airport, which is owned and operated by Miami-Dade County, ranks third among U.S. airports for air-cargo volume and is number one in perishable cargo, accounting for 69.7 percent of U.S. airport tonnage in 2011. The lion's share of that is fresh fruits and vegetables, flowers, and fish, coming from Latin America. No other airport is even close.
Miami-Dade's outgoing aviation director, Jose Abreu, recently told local business leaders that cargo traffic at MIA rose more than 4 percent in 2012 to a record 2.1 million tons.
About half of Centurion's cargo is perishable: Besides fish from Chile, it carries fresh flowers from Colombia and Ecuador, and asparagus from Peru. Southbound, the fleet of McDonnell Douglas MD-11 freighters carries a lot of electronics and telecom equipment, car parts and other manufactured goods. The carrier has carved out a niche in transporting horses, including Argentinian caballos criollos, the beloved steeds of the gauchos, which are popular, among other things, in polo.
Centurion and an affiliate, Sky Lease Cargo, run neck and neck with Chilean-based LAN Airlines, for the top spot in air-cargo shipments between Miami and Latin America. Rey said his firms generated about $750 million in revenue in 2012, a "bad year" in which the firm essentially broke even. He hopes to hit $1 billion in 2014 and double that by 2016, growing the fleet from the current 11 MD-11Fs and two Boeing 747Fs to 18 MD-11Fs and 10 additional 747-400Fs.
Yet Rey has attracted relatively little media attention. "We're very low key," he said. "Perhaps it's my personality."
Miami International Airport, the air freight gateway for Latin America and the Caribbean, imported and exported nearly one million tons of cargo during 2004.
The Toledo-Lucas County Port Authority could lease the building to a company that would use it to handle cut flowers imported from South America.
D/FW Redirect New International Centre is the first step in an aggressive plan to expand import/export services BY John Boyce, contributing editor September 1999 DFW AIRPORT...