JACKSONVILLE PORT AUTHORITY ANNUAL REPORT REPORT ANNUAL AUTHORITY PORT JACKSONVILLE 2014 JAXPORT Jacksonville Port Authority 2014 Annual Report The Jacksonville Port Authority (JAXPORT) is an independent agency responsible for the development of public seaport facilities in Jacksonville, Florida. JAXPORT owns three cargo facilities and one passenger cruise terminal along the St. Johns River: Blount Island Marine Terminal, Talleyrand Marine Terminal, Dames Point Marine Terminal and the JAXPORT Cruise Terminal. 4 Vision Northeast Florida will be a principal hub of the nation’s global logistics, trade and transportation network. Mission Creating jobs and opportunity by offering the most competitive environment for the movement of cargo and people. Guiding Principles Innovation • Teamwork • Accountability • Leadership • Integrity Pledge Demand a measurable return for the dollars invested Maximize the use of public assets for public good Balance the interests of those we serve Integrate green port initiatives into all endeavors Pursue all outreach and engagement opportunities 5 A Message from JAXPORT The information presented in the pages ahead highlights another year of financial stability, cargo diversity, intense focus on business development and superior customer service at JAXPORT. These factors – along with careful expense-side management – enable us to fulfill our chartered mission to deliver sound economic impact for Northeast Florida and create an environment for individuals and private enterprise to prosper. JAXPORT moved 8.3 million tons of cargo last year and earned $53.2 million in operating revenues marking the port’s 14th consecutive year of operating revenue growth. 2014 was also another year of record container growth and an especially noteworthy period for JAXPORT’s Asian container business, which increased by 20 percent. Significant progress has also been made on all of our major growth projects. JAXPORT’s Intermodal Container Transfer Facility is on track for completion this year thanks to federal and state funding; the modernization of docks, berths and cranes continues; federal construction to remove a navigational hazard in the St. Johns River is underway; and pre-construction, engineering and design of the Jacksonville Harbor Deepening project to take the shipping channel to 47 feet is set to be complete in 2015. During the first few months of our new fiscal year, we have already marked significant developments boding well for our financial performance. Among them, the announcement that Volkswagen of America Group has selected JAXPORT as its Southeastern U.S. hub for vehicle imports and exports; an agreement with Crowley Maritime to consolidate all of the company’s Jacksonville operations, including those previously housed on a private terminal, at JAXPORT’s Talleyrand Marine Terminal; and the imminent arrival of the world’s first LNG-powered container ships, which TOTE/Sea Star will operate to Puerto Rico out of JAXPORT. When combined with the roadmap to success outlined in our Strategic Master Plan and the unwavering support of federal, state and regional leaders, these developments will allow us to continue to be a powerful generator of economic benefit for decades to come. John Falconetti Brian Taylor Chairman of the Board Chief Executive Officer 6 Year in Review February 2014 JAXPORT welcomes largest ship to date The 6,700 TEU (containers) MOL Maxim traveled from Southeast Asia through the Suez Canal to JAXPORT’s TraPac Container Terminal. The Maxim is nearly 1,000 feet in length and at a breadth of 138 feet is too large to fit through the current Panama Canal locks. The Maxim and other even larger ships now calling on Jacksonville through the Suez Canal clearly illustrate the opportunities ahead. Less than one year later, JAXPORT welcomed the significantly larger 8,100 TEU MOL Competence to TraPac. Finances JAXPORT earned $53.2 million in operating revenues A total of 8.3 million tons of cargo shipped through in FY 2014, and recorded the port’s 14th consecutive JAXPORT facilities in FY 14 and the port saw 1,846 year of operating revenue growth. Strong expense vessel calls the same period. side management allowed JAXPORT to hold operating expenses to $30 million in FY 14. The port Moody’s Investors Service recently assigned earned $23.2 million in operating income during the JAXPORT a financial rating of “A2” while Fitch same period. Ratings assigned JAXPORT a rating of “A.” Both agencies noted that despite challenging economic Successes include impressive gains in Asian container conditions, JAXPORT maintained its competitive growth as well as record-setting tonnage and twenty- position as a strategically located container port, its foot equivalent units (TEUs) statistics. JAXPORT also status as one of the nation’s largest vehicle processing continues to maintain its diversification and nearly centers, and its diverse revenue streams supported by equal balance of imported to exported cargo. long-term contracts with private tenants. The past year’s financial results reflect JAXPORT’s JAXPORT has a significant capital program planned positive year operationally with another record set for FY 2015, much of it funded through state and in container volume. JAXPORT facilities moved federal grants. These projects include wharf a record 936,972 containers or TEUs in FY 2014. rehabilitation projects at Blount Island and Talleyrand Container volume has grown 34 percent since 2008, Marine Terminals, improvements at making JAXPORT one of the few U.S. seaports to Mile Point, enhancements to tenant leaseholds at experience year over year growth during a period Blount Island, the Intermodal Container Transfer marked by a severe global economic downtown. Facility at Dames Point, and three state-of-the-art container cranes. When combined with the volumes from private users of the harbor, Jacksonville maintains its rank “My top priority is job as Florida’s number one container port. creation. Florida’s ports JAXPORT achieved 20 percent are critical to providing growth in Asian container shipments over fiscal year 2013, jobs for Florida families.” moving 272,524 TEUs compared to -Florida Governor Rick Scott 226,938 last year. The Asian container trade is the fastest growing segment of JAXPORT’s container cargo business, accounting for nearly 30 percent in 2014, up from 24 percent the previous fiscal year. The port has recorded an average of 28.5 percent annual growth in Asian container volumes during the past five years. 8 March 2014 Governor Scott and Mayor Brown pledge investment and support During their March 2014 visit to JAXPORT, Florida Governor Rick Scott and Jacksonville Mayor Alvin 9 Brown reiterated their strong support for the port’s growth and development projects. JAXPORT at a glance Total Tonnage (in millions) 3 4 5 6 7 8 9 FY 09/10 8.0 FY 10/11 8.1 FY 11/12 8.2 FY 12/13 8.2 FY 13/14 8.3 Revenue (in millions) 12 19 26 33 40 37 54 FY 09/10 50.6 FY 10/11 50.9 FY 11/12 51.8 FY 12/13 53.1 FY 13/14 53.2 TEUs (in thousands) 400 500 600 700 800 900 1000 FY 09/10 827 FY 10/11 900 FY 11/12 924 FY 12/13 927 FY 13/14 937 10 Import/Export (in millions of tons) 1 1.5 2.5 3 3.5 4 4.5 FY 09/10 3.9 Import 4.1 Export FY 10/11 3.7 4.4 FY 11/12 3.9 4.3 FY 12/13 4.0 4.2 FY 13/14 4.3 4.0 Auto Units (in thousands) 12 19 26 33 40 37 54 100 200 300 400 500 600 700 FY 09/10 519 FY 10/11 520 FY 11/12 609 FY 12/13 631 FY 13/14 605 Asian Container Growth (in thousands) 100 150 200 250 275 FY 09/10 102.4 FY 10/11 159 FY 11/12 194.8 FY 12/13 226.9 FY 13/14 272.5 11 #9 NETHERLANDS #7 CANADA #14 UNITED KINGDOM #5 MEXICO #3 BAHAMAS #1 PUERTO RICO #13 VIRGIN ISLANDS #19 NIGERIA #18 VENEZUELA #2 COLOMBIA #12 TRINIDAD #6 BRAZIL Jacksonville Port Authority FLORIDA #20 ARGENTINA JAXPORT12 TRADE LANES FY 2014 #17 DENMARK #10 FINLAND #8 JAPAN #4 CHINA #11 SAUDI ARABIA #16 UNITED ARAB EMIRATES #15 VIETNAM #19 NIGERIA 13 Economic Engine There is no denying that JAXPORT is a crucial component of the area’s present economic vitality and future growth. According to figures released in 2014 by the Pennsylvania-based consulting firm Martin Associates, Jacksonville’s seaport generates the following impact: Nearly 133,000 direct and indirect area jobs are supported by port activity: everything from longshoremen, truck drivers and warehouse workers to engineering specialists, legal consultants, maintenance workers and hundreds of similar support positions. In Jacksonville alone, more than 24,000 people are employed in port-dependent positions, jobs directly relying on the port. An additional 108,000 positions are related to cargo activity in the Port of Jacksonville; these are jobs within the manufacturing, retail, wholesale and distribution industries. The latest research concludes these “Our seaports and transportation positions provide an average annual salary infrastructure are critical to our that is 34 percent higher than the Jacksonville goal of facilitating job creation in MSA average. order to strengthen our country’s The port accounts working and middle class.” for $26.9 billion in total economic output -U.S. Representative Corrine Brown annually, including $1.8 billion of personal income and consumption, $727 million in state and local taxes related to cargo activity and $169 million in taxes directly generated by cargo operations. In addition, growth at the port has spurred demand for commercial real estate and warehouse space. Citing Jacksonville’s outstanding intermodal connections and worldwide ocean carrier services, several companies have opened warehousing and distribution center facilities in Jacksonville and/or have relocated corporate offices to Northeast Florida.