History of the Jacksonville Port

[stephendare]

http://www.123jump.com/management-talk/Jacksonville-Port-at-Crossroads/33680/21

Q: What is the history of the port and what integral part does it play in the regional economy?

A: Prior to 1963, the port was a part of the city, called the City Docks Department. In the latter half of the 1800s and all the way into the first half of the 20th century, the port of Jacksonville was quite robust. At the time it was one of the major ports in the southeastern United States. Then, in the late 1950s and early 1960s, the port began to fall into disrepair. The city made the decision that the port should be recreated as an independent agency of the city with a guaranteed and dedicated funding source, which would be a portion of the city’s and the county’s property tax. The port was created as the Jacksonville Port Authority in about 1963.

In the mid 1960s, the city began to look at the consolidation of city and county government, which ultimately took place around 1968 with the consolidation of Jacksonville. At that time the airport was combined with the seaport. Between then and 2001, the airport and the seaport were managed and controlled by the Jacksonville Port Authority. In 2001, they were split, creating two separate entities: the Jacksonville Aviation Authority and the Jacksonville Port Authority.

The Port Authority board, just like the Aviation Authority board, is made up of seven appointees from the governor and from the mayor. The reason for that is because, on one hand, we are an independent agency of the city, and, on the other hand, we are chartered by the state. Consequently, the port has four mayoral appointees and three gubernatorial appointees, while the airport has four gubernatorial and three mayoral appointees. The mayor and the governor each have seven appointments on the two boards.

From a mission perspective, we are an enabler of commerce, an economic engine. We are responsible for locating properties, acquiring funding through bonds and loans from the federal government, through loans from the state government and various other programs that they have. It is important to note that we function as a landlord port rather than an operating port. We are committed to acquiring funding, the designing and the construction and management of maritime facilities as well as the equipment on those facilities. We lease them to about 45 different tenants, including steam ship lines, stevedore companies, terminal operators, and automobile processors.

The Port Authority generates about $50 million a year, and it costs roughly $30 million dollars a year to operate the port. The other $20 million per annum goes to service $290 million of debt. The sum total of activities in the harbor drives about 47,000 regional jobs. These are direct, indirect and induced jobs. That combined translates into about $3 billion a year in positive economic impact in the region.

Q: How would you define the port’s most distinguishing features?

A: The Port of Jacksonville has traditionally been involved in the north/south trade lane, and our real focus for many years was the trade with Puerto Rico. We are still heavily involved in the Puerto Rican trade, but we have branched out and we now have Hamburg Süd and Frontier Lines. The port is also heavily involved in the north/south trade lanes with South America, Colombia, Brazil, and Venezuela. We have also been known as a very substantial roll-on roll-off cargo port. As a ro-ro port, in 2008 we hit a record of 656,000 automobiles, and pieces of heavy equipment moving through Jacksonville.

Over the last five to six years, our major initiative has been to open the east/west trade corridors with Jacksonville as a natural global gateway for the southeastern part of the United States. In January, we opened a $230 million dollar terminal that we completed on time and on budget for TradPak, the terminal operator for Mitsui Lines, who are based in Japan. Mitsui has now opened a new service in Jacksonville with their strategic alliance partners Hyundai Merchant Marine, GMAC GM, the large French line operator, and APL from Singapore. Back in December, we also signed a 30-year contract, which is a development and an operating agreement with Korea’s Han Jin Shipping. We are soon going to start the designing and construction of a $210-million terminal for them, which we hope to open in 2011 or early 2012. Han Jin comes with their partners Cosco (China Overseas Shipping Corporation), Bing-Bing out of Taiwan, and with Kalian from Japan.

Q: What are your plans for development of the port’s property?

A: The Port of Jacksonville has developable property right on the federal channel, which was an anomaly in the port business. It was a green field site that was already appropriately zoned. I am not familiar with any other ports that had such a terrific piece of property on a federal channel. Jacksonville sits in a confluence of interstate highway systems, I-10, I-95 and I-75, which allows you to reach a third of the country by truck within 24 hours. Moreover, the port is adjacent to three railroads with major deployments in Jacksonville, Florida east coast, Norfolk southern and CSX.

We believe that Jacksonville and JAX Port could be a very viable Post Panamax gateway to the southeastern United States in 2015 or as soon as the Panama Canal opens to the transit of Post Panamax vessels. That coincides closely with when we think that we are going to have our harbor down to a depth of about 48 feet.

We benchmark and look at our peers on a daily basis. We are looking at Savannah’s model, even though they are an operating port and we are not, and their initiatives over the past twenty years to peruse the east/west trade lanes and to peruse the ever-increasing trade with Europe and Asia. They bought property around the port and that industrial periphery and began building facilities for the big box storers, the warehousing, the consolidation or deconsolidation centers warehousing ECT. They have also capitalized on those developments and today, a decade after they were only doing six hundred thousand containers a year, they are doing 2.7- 2.8 million containers a year. We look to that model and we are convinced that we have the capability of going in that direction. We are confident that we have a somewhat different advantage than Savannah because we are a non-operating port.

Q: What is the port doing in its preparation for the Post-Panamax reality of required depth of more than 40 feet?

A: The dredging and water depth is what I consider the lifeblood of a port. If a port wants to be viable as a major cargo center, especially for containerized cargo, you have to have adequate water depth for the cargo carriers to get into your port, to unload and then get back out under any tidal condition. It is imperative that we have adequate water depth in order to be able to accommodate Panamax vessels today and Post Panamax vessels in 2015.

With the Panama Canal excavation going in earnest on both sides, we are looking at locks that will allow for the transit of vessels that are 160 feet wide, 1,200 feet long, and drawing 50 feet of water, the new Post Panamax measurement. We are currently finishing what we call the Forty One Foot Project, which began in 2000 and was segmented into two projects. The second segment, which takes the last 5 miles of a 20-mile channel into construction, has just started. In a period of a little less than a year that will provide us with a water depth of about 41 feet all the way into our innermost terminals.

We are now in the last year of an accelerated feasibility study with the ambition to continue the deepening of the Jacksonville harbor to a depth of around 47 or 48 feet. We feel optimistic that we are going to get an authorization for that project in our water resource development act in 2010, which would then be followed hopefully by an appropriation of funds in 2011 or 2012 or 2013. We are likely to be at 48 feet at mean low water, which â€" along with a 3 foot tidal fluctuation â€" would give us 51 feet at high tide. If you did get a vessel coming through the Panama Canal fully laden, drawing a depth of about 49 feet, she could certainly transit the St. John’s River during the appropriate tidal conditions.

Q: What kind of industries are primarily using your services?

A: We are an anomaly in the port business for several reasons, one of which is that we handle a very broad variety of cargos. Jacksonville was a port that has a long and successful history in handling the full spectrum of cargos. Our current volume of about 800,000 containers is about to change dramatically with the opening of the TraPack terminal. The situation will then change again in 3 years with the opening of the Hanjin terminal.

Last year we handled 656,000 automobiles in pieces and heavy equipment. In addition to that, we handle several million tons of break bulk cargo including paper imported from Finland through UPM Kemina, the exportation of poultry to the former Soviet Union, importation of steel and other forest products from all over the world, and importation of Brazilian eucalyptus wood pulp used by Proctor and Gamble and Kimberly Clark. We also handle 1 to 1.5 million tons of aggregate on an annual basis through Martin Marietta and Ranker.
The aggregates that we handle are predominantly crushed lime rock coming from the Bahamas, and crushed granite from Nova Scotia which is used for the aggregate in asphalt. A good deal of petroleum is handled in the harbor of Jacksonville by the private terminals with BP, Hess and Chevron being the most notable players. As far as wet bulks and liquid bulks are concerned, we handle corn syrup, fructose, molasses, turpentine, cooking oil, phosphoric acid and soda ash. We handle some sulfuric acid as well, but most of that is a combination of import and export. When you get to the question of what industries are taking advantage of the Port of Jacksonville, you have the construction industry with the aggregates, and the industries that produce all of the commodities moving out of Jacksonville for Puerto Rico. We send virtually everything that you can think of in containers and refrigerated containers to Puerto Rico.

We export a great deal of construction equipment, predominantly John Deere and Caterpillar. We also bring in construction equipment that has been used overseas and is coming back through the port and going back into our U.S. based factories for rebuilding and retransmitting back to ports overseas. We export about one-third of a million to half a million tons of frozen poultry grown throughout the southeastern United States. Most of that poultry is going to St. Petersburg in Russia. We are not focused on one type of trade or one commodity; we cover a broad variety of commodities used in virtually every facet of the industry.

Q: Are you a local port or a regional port?

A: Florida has about fourteen deepwater ports, although there are only four that serve as major ports: Tampa, Miami, Everglades and Jacksonville. We do not compete with any of those ports as they tend to service more of their local community. Each of the other ports sits at the center of a major population center and Jacksonville is not one of them. With a population of about 1 to 1.25 million people in our multi-county area, we do not stand as a major population center. Since we are more similar to Savannah and Charleston, we are what we call a discretionary cargo port. About 80% to 90% of the cargo that moves through Jacksonville is taking advantage of our terrific interlobular connections.

Q: How is the cruise business working to your advantage? What kind of opportunities have you identified in the sector?

A: We entered the cruise business in October 2003 with the initiation of cruise service in Jacksonville as a homeport to Celebrity cruise lines’ vessel called The Zenith. The vessel was deployed in Jacksonville for a six-month period during which she did thirteen cruises out of Jacksonville. With our involvement with Celebrity cruise lines, we got Carnival cruise lines after building a temporary cruise line terminal on some property that we owned on Dames Point. Carnival passengers voted us three times as the best U.S. home port for Carnival cruise lines. In April 2008, they discontinued their service with Celebration and sold her before they brought in a much larger fantasy class vessel called The Fascination.

What has worked so well for us in the cargo segement in terms of infrastructure is a significant advantage in the cruise business too. We are finding that there is a large segment of the population who want to go on a cruise and are quite happy to drive to the cruise terminal as opposed to flying. That is the demographic that we are serving, and if you take a six- or seven-hour driving time arch from Jacksonville going to the north and to the west, that will encompass a very substantial population of potential cruisers.

We have purchased property in Mayport, which is very close to the Atlantic entrance. We have about 10 acres there, which is adequate to build a cruise terminal that would handle two to three cruise vessels, scheduled one after another on our dock. I think we would be capable of handling 350,000 to 400,000 passengers on an annual basis.

If we had three ships at that terminal in Mayport, which we plan to build here in the next two to three years, it would provide us with substantial revenue in excess of the debt service. Also, if we were to reach our full potential of 400,000 passengers per year, that would bring many people to Jacksonville, who are probably going to stay for a day before they take their cruise, or a couple of days after they take their cruise. Perhaps they will want to come back and vacation here in Jacksonville. It is not only a beautiful place with wonderful beaches, but a golf and fishing Mecca too.

[heights unknown]

Quite a history, and now JPA is poised to become one of the biggest if not the biggest ports and terminals in the Southeast and in the nation. One of the biggest successes for JPA is that it is now becoming more and more international in scope vice domestic only.

Heights Unknown

[macbeth25]

I think I read somewhere how the upgrading of the Panama Canal is going to affect Jacksonville as the "super" ships which now have to unload on the west coast because they're too big to fit through the Canal start arriving.  That's not scheduled to be completed for several years yet. 
I think that's one of the reasons for the expansion of the port and the many things in the future which will aid in the movement of cargo from the port elsewhere.  That's going to mean possibly thousands of jobs and millions of dollars for Jacksonville and this area. 
Is anyone famliar with that?

[stjr]

I think I read somewhere how the upgrading of the Panama Canal is going to affect Jacksonville as the "super" ships which now have to unload on the west coast because they're too big to fit through the Canal start arriving.  That's not scheduled to be completed for several years yet. 

Is anyone famliar with that?

Macbeth, the answer is in the Q & A in Stephen's first post above.  Here is relevant excerpt below:

: What is the port doing in its preparation for the Post-Panamax reality of required depth of more than 40 feet?

A: The dredging and water depth is what I consider the lifeblood of a port. If a port wants to be viable as a major cargo center, especially for containerized cargo, you have to have adequate water depth for the cargo carriers to get into your port, to unload and then get back out under any tidal condition. It is imperative that we have adequate water depth in order to be able to accommodate Panamax vessels today and Post Panamax vessels in 2015.

With the Panama Canal excavation going in earnest on both sides, we are looking at locks that will allow for the transit of vessels that are 160 feet wide, 1,200 feet long, and drawing 50 feet of water, the new Post Panamax measurement. We are currently finishing what we call the Forty One Foot Project, which began in 2000 and was segmented into two projects. The second segment, which takes the last 5 miles of a 20-mile channel into construction, has just started. In a period of a little less than a year that will provide us with a water depth of about 41 feet all the way into our innermost terminals.

We are now in the last year of an accelerated feasibility study with the ambition to continue the deepening of the Jacksonville harbor to a depth of around 47 or 48 feet. We feel optimistic that we are going to get an authorization for that project in our water resource development act in 2010, which would then be followed hopefully by an appropriation of funds in 2011 or 2012 or 2013. We are likely to be at 48 feet at mean low water, which â€" along with a 3 foot tidal fluctuation â€" would give us 51 feet at high tide. If you did get a vessel coming through the Panama Canal fully laden, drawing a depth of about 49 feet, she could certainly transit the St. John’s River during the appropriate tidal conditions.

[macbeth25]

Thanks, I should have read the original post more thoroughly. 
Considering another kind of "port," what has anyone heard about Cecil Field becoming a space port?  If I remember correctly, they were talking about a "horizontal launch," meaning the shuttle -- or whatever it might be called -- would be piggybacked on a 747-size aircraft to altitude and then launched from there. That way there wouldn't be any rocket launch. 
A piggyback system, I think, was used in the contest for that several million dollar prize which took place some years ago.  They had to launch a ship capable of carrying so many passengers twice in a given period.  They did it.
I think a casino in space, perhaps at an L-5 point might also be a wonderful idea.  If you remember the movie Contact with Jodie Foster, one of the characters went to live on the ISS because he had problems living in the gravity of Earth. 
Another thing I wish someone would do -- and basing one out of Jacksonville probably wouldn’t be all that difficult â€" would be building a floating casino or hotel of pykrete.  Building pykrete aircraft carriers was actually proposed by Churchill in World War II. 
Another tactic would have been setting up airfields on icebergs to cover convoy areas which couldn’t be reached from available airfields. 
One of the reasons this wasn’t done was that our aircraft production got so big so fast, “pocket” carriers were built, and the war ended. 
A carrier built out of pykrete could not have been sunk or badly damaged by anything less than a nuclear weapon.
I can talk more about this if anyone’s interested but you can find the story by Googling “Pykrete” on the Internet.  Here’s just one of the citations: http://en.wikipedia.org/wiki/Pykrete