Jaxport's Game Plan
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JaxPort’s game plan Future container growth hinges on deeper ship channel, new intermodal rail facility. BY ERIC KULISCH he Port of Jacksonville continues to diversify its windfall on top of the 930,000 TEUs al- ready handled by the port, where volumes cargo base, but is still intent on capturing container are growing more than 3 percent per year, would put JaxPort’s throughput at 3 million cargo destined for Florida because containers have TEUs in 22 years, Taylor said. T “If the trade is flowing into North Flor- the largest compound annual growth rate for commodities ida, and it’s coming through a non-Florida port, that has to be a key target market for handled by ports, Chief Executive Officer Brian Taylor us,” Taylor said. JaxPort could even boost its share another said in a recent conference call with American Shipper’s 250,0 0 0 T EUs by c onve r t i ng f r eig ht he a d e d to the Atlanta market that normally uses editorial team. other West and East coast gateways once it develops an efficient intermodal service JaxPort, assuming it can get federal permission and capability, he added. Martin Associates relatively calculates funding to deepen the St. Johns River to 47 strategic master plan conducted by Martin that Jacksonville is the cheapest gateway for feet for larger vessels and correct the Mile Associates. routing cargo from Hong Kong to Atlanta, PHOTO CREDITS: AERO-PIC PHOTO, JAXPORT, MEREDITH FORDHAM HUGHES AND JEFF PRICE Point navigational impediment, is “ideally According to the report, there are about and is even $114 cheaper per FEU than positioned” to steal about 250,000 TEUs of 1.3 million TEUs of imports consumed in moving through Savannah, Ga. annual cargo from West Coast and South Florida that arrive in non-Florida ports and A contractor hired by the Jacksonville Atlantic ports that enters the state by truck, about 1.8 million TEUs of export loads and Port Authority has begun the design phase the former ocean carrier executive said. empty containers from Florida that exit of a $30 million intermodal container trans- The Northeast Florida port conservative- the nation via non-Florida ports, about a fer facility where CSX Transportation will ly estimates it could achieve that growth by quarter of which (775,000 TEUs) Florida provide on-dock rail service at the Dames taking a third of the potential discretionary ports could attract with moderate levels of Point Marine Terminal. Containers cur- container market available to Florida ports, marketing to shippers. rently have to be shuttled 16 miles by truck Taylor said, citing figures in JaxPort’s new Adding a quarter-million container to a CSX ramp. The project is scheduled 48 AMERICAN SHIPPER: MAY 2014 TRANSPORT / PORTS to be completed in late 2015. The North water is necessary to compete for service for the carrier and the port. Korean carrier Florida regional planning organization from larger containerships as well as Hanjin several years ago backed out of also released in February a study outlining heavy-weight exports, and attract large plans to develop its own terminal because how to eliminate 22 rail crossings at roads import distribution centers and manufac- of concerns over channel depth. on the northwest corridor leading in and turing activity near the port. The ports of Ports want to be the first inbound and out of greater Jacksonville. Together the Miami, Charleston, S.C., and Savannah last outbound port of call because that’s improvements would significantly improve are already deeper than Jacksonville and where shippers prefer to send cargo to freight-rail efficiency and make it easier are moving ahead with their own projects avoid time-consuming intermediate stops to convince shippers to switch ports for to deepen further. along the coast. Vessels also tend to carry discretionary imports and exports. The limited depth, along with the tidal the most cargo to and from those ports. Attaining the desired box growth restriction at Mile Point and the lack of an Less cargo remains after discharge for in- depends on dredging the main shipping on-dock intermodal facility, has limited the between stops and less is picked up until channel from 40 to 47 feet, Martin As- amount of cargo moving through MOL’s the final port, which shippers know is their sociates and local officials insist. Deeper TraPac container terminal and revenues last chance to make a voyage to overseas destinations. Jacksonville’s draft restric- tions mean the average container vessel from Asia, at current sizes calling MOL’s Our expertise isn’t just based TraPac Terminal, is not being loaded to the fullest extent possible, resulting in an on desk research average arrival and departure draft of 34.65 feet and an 80 percent increase in voyage costs per container compared to full-vessel utilization if the channel was 45-feet deep, according to the master plan. Based on the need for a two-foot keel clearance, vessel operators would still be subject to a 6 percent cost penalty on first in/last out service even at a 45-foot depth. Large vessels (6,000 to 10,000 TEUs) with drafts in excess of 45 feet are becom- ing the standard on all-water routes from Asia because their per slot cost is almost a quar ter less than that of Panamax-size ves- sels, but will require a channel depth of 47 feet at a minimum two feet of clearance to accommodate a first-in/last-outbound port of call, the Martin Associates study said. With only a 45-foot channel and two feet of clearance under the keel, post-Panamax vessels would experience a 20 to 25 percent increase in voyage costs per container for first-in/first-out calls. Asia services would likely disappear at JaxPort without deepening soon and the p or t wou ld lo s e it s a bi l it y t o t a ke i nt e r mo d a l and Florida market shares from other ports, according to Martin Associates. “So if Savannah goes deeper [seeking Having every professional qualification in the book and speaking approval to go from 42 to 47 feet] and 16 languages – from Mandarin to Romanian – helps. But knowing JaxPort doesn’t, there’s no way you can global transport and logistics inside out is all about being part of serve that Atlanta market because there’s the fabric of the industry. From lawyers to loss prevention experts, from underwriters to claims managers, you can rely on us for no way a carrier will deploy a smaller ship unrivalled experience and expertise. to Jacksonville and transfer it to Atlanta because it’s too expensive,” John Martin Because we don’t do anything else, we lead the way of Martin Associates elaborated in a phone in transport and logistics insurance. interview from his vacation home in Beaver www.ttclub.com Creek, Colo. The opportunity cost of not reaching 47 feet is about 10,000 direct, induced and indirect jobs by 2025, and about 13,800 jobs by 2035. The region stands to lose $1 billion per year in future personal income, business revenue and local taxes without the potential container growth, according 50 AMERICAN SHIPPER: MAY 2014 TRANSPORT / PORTS ment Act reauthorization bill could actually determined to be the cause of higher salin- work in JaxPort’s favor, Taylor suggested. ity levels “we’ll consider further mitigation Estimated shipping cost The port authority, along with regional and corrective measures,” he said. Increases and state politicians, has aggressively made in salinity that negatively affect wetlands, Hong Kong to Atlanta the case in Congress for the project to be aquatic grasses and fish distribution are PRE* Hong Kong routing Atlanta authorized. The Army Corps of Engineers, mostly being caused by drought, sea-level which in February tentatively indicated the rise and water withdrawal from the St. 4800 New York $3,648 4800 Norfolk $4,056 deepening project is environmentally and Johns River. 4800 Savannah $3,161 operationally feasible and makes financial Normally, projects that do not have a final 4800 Jacksonville $3,046 sense for the federal government to pursue, feasibility study from the Corps’ Chief of 4800 Port Everglades $3,115 is expected to finish its study by late April, Engineers completed by the time of WRDA 4800 Miami $3,198 paving the way for congressional approval. reauthorization must wait several years to 4800 Houston $3,597 The Corps’ latest estimate is that the get included in the next spending plan for 6000 Los Angeles $3,256 project will cost $684 million—$601 civil works projects. The House version of 6000 Oakland $3,450 million for deepening and $83 million for the WRDA bill would allow local sponsors 6000 Seattle/Tacoma $4,866 navigational aids and other improvements. that receive final feasibility studies after PRE* Least cost (JaxPort) ($115) The federal government is responsible for enactment of the bill to move forward with to Savannah differential $312.7 million of the dredging cost. pre-construction, engineering and design The local share is large, since the port at their own risk and apply for in-kind POST* Hong Kong routing Atlanta authority and state are funding an extra two credit or reimbursement after the project 7000 New York $2,888 feet of dredging themselves because the is authorized at a later date. 7000 Norfolk $3,307 federal government’s benefit-cost analysis Taylor said information from Florida’s 7000 Savannah $2,424 only calls for a 45-foot channel, which congressional delegation suggests the 7000 Jacksonville $2,312 would restrict sailing draft to between 42 House and Senate negotiators do not expect 7000 Port Everglades $2,400 and 43 feet.