JaxPort announces shorter river deepening that would cut cost by $200 million
JaxPort announced Friday that the planned deepening of the St. Johns River will cover an 11-mile length of the river instead of 13 miles, a change that will cut $200 million from the cost of the project.
Instead of costing $684 million, the bill would be $484 million, according to JaxPort.
The port authority has been studying the shorter option for two years. The major sticking point has been that an 11-mile long deepening would not get to the Dames Point terminal that is the location of TraPac, which opened in 2009 in order to bring ocean-crossing cargo-container carriers to Jacksonville.
The ships calling on TraPac need deeper water, so the plan calls for TraPac to move its operation to the Blount Island Terminal on the east side of the Dames Point bridge. The 11-mile of dredging would end at Blount Island.
Source: http://jacksonville.com/news/metro/2017-06-09/jaxport-announces-shorter-river-deepening-would-cut-cost-200-million
Army Corps working on repairs to $43.5 million St. Johns River project
http://jacksonville.com/news/metro/2017-04-28/army-corps-working-repairs-435-million-st-johns-river-project
Cool drone video of the mile point project and where the above mentioned repairs need to be made.
https://www.youtube.com/watch?v=x5zpUob2Le8&t=70s
Where on Blount is TraPac is supposed to go?
The JEA Coaling Dock? I thought that was where JPA wanted the new cruise dock to go.
Are the Marines headed out?
Quote from: RatTownRyan on June 09, 2017, 05:29:35 PM
Army Corps working on repairs to $43.5 million St. Johns River project
http://jacksonville.com/news/metro/2017-04-28/army-corps-working-repairs-435-million-st-johns-river-project
Cool drone video of the mile point project and where the above mentioned repairs need to be made.
https://www.youtube.com/watch?v=x5zpUob2Le8&t=70s
I noticed the damaged areas today when I went by on my boat. Some of it looks pretty serious, like they have sunk or slumped down to almost the waterline. It doesn't look like an easy fix and had me wondering about the stability of the rest of the wall
They will have to relocate current tenants at great expense. Jaxport would like us to only focus on the cost to dredge. However, this is just a fraction of the total investment that is necessary for Jaxport to deliver on the economic promises it has made to the community.
Local logistics expert Dale Lewis has been conducting an independent economic analysis of this project and has found that the the dredging is only about 35% of the total cost. According to Jaxport's strategic plan, Jaxport would need to spend over $2 BILLION to meet its growth goals. Of this amount, over $500 million would be required for tenant relocation. Of course, that does not include the relocation of TraPac, since dredging 11 miles instead of 13 was not part of the original plan. Now that TraPac needs to move to Blount Island, this will further complicate Jaxport's growth plans and increase the overall expense, offsetting any cost savings from the shorter distance to dredge.
Dale Lewis has also gone through all of the Army Corps economic forecasts for each of the Southeastern ports; read the strategic plans for Miami, Port Everglades, Tampa; and analyzed all of the Florida Ports Council's 5-yr growth plans from 1998 to 2017. He has essentially conducted the multi-port analysis that the Army Corps should have done as part of their review of the project. His analysis shows that Jaxport will have an extremely difficult time taking market share away from Savannah, Charleston or even Miami, and this latest plan does nothing to make Jaxport more competitive.
Charleston serves as a good example of why deeper water alone doesn't make you more competitive. Almost thirteen years ago, Charleston dredged to 45', giving them deeper water than Savannah (42'). At that time, Charleston claimed about 31% of the total Southeastern TEU market share, and Savannah had about 27%. Today, Charleston has 22% and Savannah has 42% of the market share.
More recently, we can look at Miami. Their strategic plan, as with Jaxport's, is focused on an "Aggressive Growth + Intermodal Penetration" scenario that requires 80% Total TEU growth in 4 years after the dredging. (Jaxport's plan calls for growing 100% in 9 years, despite recent annual growth of just above 1%). Now 18 months after the completion of dredging to 50', Miami's growth has been relatively flat.
You can find all of this information on Dale Lewis' website - http://www.southeasternports.net/. He also has an excellent video on the website about this issue and his findings.
The bottom line is that this change of plans was simply due to the fact that the project isn't competitive for federal funding. The Benefit-to-Cost Ratio (BCR) of 2.7 is much lower than Savannah (7.3) or Charleston (3.79), so they are doing what is necessary to make it look more attractive. Taxpayers shouldn't be fooled.
This has to be one of the most polarizing issues in Jax. Some say keep up with the Joneses, or at least stay in play to the next level; others say the the writing is on the wall, as other deeper ports are the main players.
I used to be a dredging cheerleader.
JaxPort has lost credibility with me on the dredging issue. This is the exact same thing they could have done in 2012, but instead an operator that is just as big as TraPac (serving different shipping channels, which could have further diversified the port's cargo) was lost to another Florida port.
So, the plan to relocate tenants was somehow not affordable (when a private operator was willing to pay $250million... what many believe would be the local contribution to JaxPort's dredging plan) just a few years ago.... but somehow is affordable now (after the cost to dredge has also increased since that time)?
http://jacksonville.com/business/2012-06-01/story/jaxport-turns-down-250-million-deal (http://jacksonville.com/business/2012-06-01/story/jaxport-turns-down-250-million-deal)
QuoteJaxPort turns down $250 million deal
The Jacksonville Port Authority has turned down a proposal by an international shipping firm seeking to lease 100 acres at Blount Island for a cargo terminal that would have been one of the port's biggest.
Gulftainer Co. Ltd. also said it would spend around $250 million in Jacksonville if it built a terminal here, according to state Rep. Mike Weinstein.
But JaxPort officials notified Gulftainer this week the company's proposal does not fit into the authority's plans.
The 754-acre Blount Island, east of the Dames Point bridge, is occupied by existing tenants. JaxPort officials said the authority is in the early stages of putting together a strategic plan for developing all the port authority's property.
Weinstein, R-Jacksonville, said JaxPort missed an opportunity because Gulftainer considered Jacksonville its No. 1 choice. He said the port should have looked for ways to accommodate Gulftainer's needs by possibly moving some tenants from Blount Island to other port-owned property.
This was their first choice and if they don't come here, they're going to take that same level of investment and [cargo] tonnage somewhere else on the East Coast," he said. "It won't be Florida. We're the only Florida port Gulftainer was considering.
Weinstein said Gulftainer told him the $250 million would pay for projects such as new cranes, helping to foot the bill for deepening the ship channel and raising the JEA power line spanning the river to allow passage of bigger cargo container ships.
He said given the magnitude of Gulftainer's proposal, he's disappointed the port didn't vigorously enter into negotiations.
Gulftainer "brought in a half dozen people from all over the world to make this presentation, and all they got back was a fax saying we're not interested," Weinstein said. "It could be the right decision. I'm not suggesting this is the company we should deal with. But there should have been some effort to see if there was a win-win."
JaxPort spokeswoman Nancy Rubin said Chief Executive Officer Paul Anderson has been meeting with "any and all credible entities with creative ideas" about investing in the port's expansion. She said the authority has been telling them JaxPort is at the beginning stages of developing a strategic master plan.
"It's going to be a well thought-out strategic plan, and it should be if you're talking about a 20-year plan of generational improvements," she said. "You've got to take your time."
She said JaxPort gave Gulftainer a response this week because it appeared the company wanted an answer soon.
JaxPort board member Jim Citrano said he agrees with the staff's decision to do the strategic plan first. He said JaxPort had a limited amount of land and Gulftainer was seeking "a considerable amount of it."
"There's more than one company that's looking at Jacksonville, and my sense you have to go through a process of evaluating all the companies, including the ones who are here," Citrano said. "We only have so much land."
Gulftainer first approached JAX Chamber officials in February, and the chamber referred the company to JaxPort for discussions, said Jerry Mallot, executive vice president of the chamber.
"They're a credible company, but JaxPort has to decide what works and what doesn't," Mallot said.
Gulftainer Group operates three ports in the United Arab Emirates and has other ventures in Iraq, Pakistan, Russia, Brazil and Turkey, according to the company's web site.
Gulftainer's proposal for leasing 100 acres would be on par with the port's biggest cargo terminals.
In 2009, TraPac opened its 158-acre cargo terminal at the Dames Point terminal west of the bridge. Hanjin has a lease agreement to build a terminal on 90 acres next to TraPac, but Hanjin put that project indefinitely on hold until it knows whether Jacksonville will get a deeper ship channel.
Blount Island houses much of the port's automobile shipping operators and also is the terminal used by three companies — Sea Star Line, Trailer Bridge and Horizon Lines — the carry cargo to Puerto Rico and the Caribbean.
Gulftainer instead signed a 35 year lease in Port Canaveral and opened a 200,000 TEU cargo capacity terminal in 2015, where its draft depth is 39ft at the berth and a channel depth of 44ft.
But somehow we are to believe that JaxPort will only grow if it deepens to 47 feet?? The only way for the port to grow is by betting on their ONE TENANT accommodating Post-Panamax ships via the Asian trade line??Gulftainer's Port Canaveral operation provides weekly service to Europe, Central America, the Middle East and the French West Indies.
Yeah, it seems Gulftainer was right all along.
No one seems to mention that accepting Gulftainer would have forced JPA to have several clients relocated at JPA cost.
While Gulftainer was willing to pay for certain upgrades, it didn't fully offset the cost to JPA.
With no master land use plan, it would have thrown JPA into referee role between shippers fighting for what they considered prime port space. In fact, accepting Gulftainer may have caused a domino effect of shippers executing exit clauses in their port agreements. JPA may have been reluctant to let any existing shippers go to bid again.
With dredging and all the other issues involved, there is clearly a leadership deficit at JPA. They have gone through several directors since the dredging proposal came to light. When any agency, public or private churns leadership this often is a clear signal that their is a lack of direction or cohesion with the board members.
Several JPA actions actually reflect a more political directive than a logistics one.
QuoteNo one seems to mention that accepting Gulftainer would have forced JPA to have several clients relocated at JPA cost.
While Gulftainer was willing to pay for certain upgrades, it didn't fully offset the cost to JPA.
This makes JPA look worse, IMO. So now JPA and the taxpayers are supposed to pay for all of it? Plus, how can you not have a master plan in place before making a request for public to invest hundreds of millions? I've been saying it since Peyton was still in office, these guys need to develop a realistic Plan B and fast. I assume we're still only considering a situation where CSX remains the only railroad with access? How does that stack up to all of these other ports (ex. Savannah, Norfolk, etc.) where shippers have access to multiple railroads?
(https://photos.smugmug.com/Cities/Norfolk-March-2017/i-Zwgf3L3/0/e13ef316/XL/20170325_125404-XL.jpg)
(https://photos.smugmug.com/Cities/Norfolk-March-2017/i-DLw8xmg/0/9c453424/X2/20170325_125703-X2.jpg)
I'm going to say this:
IF YOU INVESTED $600 MILLION INTO THIS CITY AND LEFT THE PORT ALONE WE WOULD VERY QUICKLY HAVE ONE OF THE FINEST CITIES IN FLORIDA. IT WOULD DRAW PEOPLE AND NOT ITEMS, CORPORATIONS NOT CONTAINERS, AND WE WOULD ALL BE BETTER OFF.
Further dredging of the river will radically increase pollution in the river, we actually don't know what the economic impact will be, and we will be playing "catch up" with these other cities for the next 50 years. Jacksonville has such a long and distinguished history of making bad decisions at the city leadership and governmental levels, and this (dredging the river to accomodate larger ships) looks like another link in that chain.
^I agree completely with this.
With how quickly port operation is going to be automated over the next 30 yrs, are port jobs really the long-term financial boon that people say they are?
QuoteHe said his goal is to provide city leaders with the full range of costs and benefits so they have a complete picture, not just the best-case scenario that usually gets painted to justify the huge cost of deepening the river.
He said when he dug into annual reports by the Florida Ports Council, he found the state's ports have a dismal track record when it comes to cargo container projections. Over and over again, they made eye-catching predictions that didn't pan out, but they still kept forecasting accelerated growth.
http://jacksonville.com/news/metro/2017-06-01/deep-dive-484-million-dredging-st-johns-river-retired-transportation-executive
The analysis by Dale Lewis shows that actual growth hasn't even met the 1998 forecasts, yet the projections keep going up and up in every Florida Ports Council 5-year plan. Jaxport's growth during each 5-Year plan has been about 1/6th of the forecast.
Check out the graphs on slides 35 and 36 in this MIT presentation by Dale Lewis that show the comparisons between actual growth and the projections.
http://southeasternports.net/files/Dale_Lewis_MIT_CTL_Online_Slides_May_3_2017.pdf
Quote from: spuwho on June 10, 2017, 11:06:30 PM
No one seems to mention that accepting Gulftainer would have forced JPA to have several clients relocated at JPA cost.
While Gulftainer was willing to pay for certain upgrades, it didn't fully offset the cost to JPA.
With no master land use plan, it would have thrown JPA into referee role between shippers fighting for what they considered prime port space. In fact, accepting Gulftainer may have caused a domino effect of shippers executing exit clauses in their port agreements.
After saying accommodating Gulftainer wasn't feasible for the exact reasons you mentioned, now five years later this is the very strategy they've laid out in their latest scheme: relocating tenants. So, it wasn't feasible then with a shipping line actually willing to offset a portion of dredging, utility line relocation and tenant relocation costs.... but is somehow feasible now? So, Joe and Joan Taxpayer is supposed to foot this bill because of an ongoing leadership gap at JaxPort?
The latest 'moderate projections' say that 3,800 jobs would be created over 20 years at port-dependent businesses. Forget about the unrealistic assumption of container traffic growth.
Let's just say that by some divine intervention, JaxPort actually outperforms all of the deeper water and larger East Cost ports like Norfolk, Charleston, Savannah, Baltimore, Miami and New York. And let's assume that the local contribution for this scheme is in the $200-250 million dollar range. That means that Mr and Mrs John and Joan Duval Taxpayer is BETTING $52,631 to $65,789 in today's money for each job that
may be created over the next 20 years if we get lucky. If we really want to spend $52k or $65k a job, then why can't that money be spent on hiring more police officers (that's an actual job that would happen today, not a 'projected job' that may happen over the next 20 years) or investing in small businesses. Or hell, let's hire some people to fix the broken sidewalks, roadways, bridges, light poles, public buildings, leaking septic tanks, etc that litter our city?
Trump looks to be releasing a new Cuba policy today, but assume that in the next 4-6 years that US/Cuba policy lifts a ban on foreign vessels calling at US ports within 180 days of calling at Cuba. If that were to happen, JaxPort immediately becomes a hot property for the Asian trade lines for transshipment services calling on Port Mariel. 47 ft wouldn't be needed to capture double the cargo from the 'rapidly growing Asian trade line'.
This entire scheme reminds me of the Offshore Power Systems scheme to build floating nuclear power plants in Jacksonville. The entire business community was all blindly behind their rosy projections and the City dolled out a king's ransom for the privilege of hosting their facilities. I remember vividly seeing that big OPS crane over at Blount Island when I was growing up and riding my bike off to the shorelines along Heckshire to catch sheepshead in the river.
(http://blogs.smithsonianmag.com/paleofuture/files/2013/02/1972-nuclear-power-plant-sm.jpeg)
There is no doubt that major questions remain that need to be answered about the economic viability of this project and the environmental impacts before dredging begins. However, Jaxport's new plan involves a phased-in approach that would allow the project to move forward without going through a public vetting process.
It was always presumed that the Port would have to first receive the blessing and support of the City Council for the proposed Deep Dredge before proceeding, and at that time, there would be an opportunity for a more robust public conversation and evaluation of the pros and cons of the project.
Unfortunately, they are now bypassing this process. Jaxport has cobbled together enough money from the state and federal government to start Phase 1 in the fall of this year, with no guarantee of future funding to continue the project and no opportunity for it to be publicly vetted.
This plan is essentially committing future councils to the dredging before they have had an opportunity to weigh in. It will also put them in a tough position in the future that may require significant tradeoffs involving essential public services and programs and the huge backlog of infrastructure projects that have yet to be funded. In 2015, it was estimated that the backlog was over $700 million, with $300M of that total for septic tanks. I am sure we haven't made much progress in paring down the list in the last two years.
Well this is the essence of Jacksonville. Correct?
More bad policy not truly and properly vetted. Mostly a huge (and expensive) question mark that no one in a leadership position is willing to try and answer.
Very similar to the 50 year mortgage that was foisted onto our children in the disguise of a pension plan fix. Kick the can down the road. We'll figure it out later. Jacksonville seems destined to never learn from it's own, or others, mistakes.
To me, JAXPORT's plan to move TraPac show that the agency realizes now that Gulftainer had a good idea before, and the port leadership and mayoral administration at the time dropped the ball. There definitely has been a leadership gap at both the port and city hall.
In addition to that there's really no unbiased information out there that gives an in-depth, well studied view of where we should go. The only study is the one done by the Army Core of Engineers, which is obviously written with the port's dredging goals in mind. The anti-dredging advocates don't have a comparable study, and of course they don't have an unbiased view about what we should do, as fighting the dredging is their one goal here.
What's your opinion of the work by Dale Lewis?
Quote from: thelakelander on June 17, 2017, 12:16:10 PM
What's your opinion of the work by Dale Lewis?
I haven't read all of his stuff (by the nature of what he's doing, he does more presentations and stuff than writing big, thorough, boring reports), but what I have read seems like a fair critique of some of Jaxport's claims about the dredging. He's definitely the most clearly articulate critiques of the dredging critics (though he's does not actually oppose the dredging). He's also pretty much the only one critiquing the dredging that's offering alternatives (he's suggested boosting car imports and the Puerto Rico trade, where we already dominate). On the other hand, I find some of Jaxport's rebuttals of some of his points compelling. They're the ones with the most up to date shipping data and who are speaking to the companies that want to expand, so for better or worse, they're the ones with the clearest picture of what TraPac, CSX, Puerto Rican shippers, etc. are looking to do.
There are some things Lewis has brought up that I don't think anyone on either side is getting at. For instance, he's saying that the full costs of building out our infrastructure to accommodate new business will greatly exceed the dredging alone. Well, that's the case whether we dredge or not if we want to stay in the port business at all. The anti-dredging advocates typically don't want to get into that, as it brings up the fact that there's a cost to *not* dredging as well, and again, their primary goal in the debate is fighting the dredging, not finding alternatives for the port.
"Dale Lewis has also gone through all of the Army Corps economic forecasts for each of the Southeastern ports; read the strategic plans for Miami, Port Everglades, Tampa; and analyzed all of the Florida Ports Council's 5-yr growth plans from 1998 to 2017. He has essentially conducted the multi-port analysis that the Army Corps should have done as part of their review of the project. His analysis shows that Jaxport will have an extremely difficult time taking market share away from Savannah, Charleston or even Miami, and this latest plan does nothing to make Jaxport more competitive."
Seems like Dale Lewis is better informed than anybody else in town. I'd listen seriously to whatever he has to say.
It's interesting how Jaxport would have us believe that the relocation of TraPac is a done deal. It doesn't look that way. http://jacksonville.com/news/metro/2017-06-15/moving-port-s-biggest-tenant-river-deepening-easier-said-done
I can't imagine TraPac is going to leave its state-of-the-art terminal for Blount and continue to pay off the bond debt on the terminal. I bet Jaxport will have to assume responsibility for the amount still owed. Anyone think there is a possibility that this might not work out and TraPac hits the road?
Quote from: riverkeepered on June 20, 2017, 12:56:58 PM
It's interesting how Jaxport would have us believe that the relocation of TraPac is a done deal. It doesn't look that way. http://jacksonville.com/news/metro/2017-06-15/moving-port-s-biggest-tenant-river-deepening-easier-said-done
I can't imagine TraPac is going to leave its state-of-the-art terminal for Blount and continue to pay off the bond debt on the terminal. I bet Jaxport will have to assume responsibility for the amount still owed. Anyone think there is a possibility that this might not work out and TraPac hits the road?
That would be your dream come true, wouldn't it? ;)
QuoteThat would be your dream come true, wouldn't it?
Not really. TraPac has been critical to the recent growth in Asian cargo. I just don't think they need to dredge to continue to be a viable port. In fact, I don't think dredging will change all that much for JaxPort. They would likely remain a secondary port, but at a much higher cost for the taxpayers, JaxPort and our river.