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Trying to carve a path to China

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Trying to carve a path to China

Jacksonville Port Authority on cusp of signing deal with Asian shipping line that could have positive ramifications throughout the region

By TIMOTHY J. GIBBONS, The Times-Union

A West Point graduate, former deputy commander in the U.S. Army Corps of Engineers and a man who headed up big construction projects in Panama and California, Rick Ferrin doesn't seem the sort that gets excited easily.

Nevertheless, Ferrin, executive director of the Jacksonville Port Authority, can't keep a note of glee out of his voice when he talks about negotiations now under way between the port and an as-yet-unnamed company that carries cargo from Asia.

"This will propel Jacksonville from being a very solid second tier port to being a true top tier port," he said.

Ferrin has been trying to woo an Asian carrier to the First Coast ever since he came to the Jacksonville port from Oakland in 1997, a process that got more intense when Roy Schleicher was hired to head up trade development and marketing in 2001.

Now, the Jacksonville port leaders said, it appears they are the closest they've ever been to getting a line directly from Jacksonville to Asia, a development that would not only have a huge impact on the port, but could also have a transformative effect on the city and the region.

Following meetings with a Japan-based steamship line in the past few days, the port has a tentative agreement with the company, which its board is expected to consider at a meeting later this month.

"We have in principal what I believe to be a deal," said Ron Baker, deputy executive director and chief financial officer of the port authority. "It's coming together pretty quickly."

A line bringing cargo to and from Asia would open up for trade a hemisphere that Jacksonville now has little interaction with, attracting not only more shipping businesses, but also making the area more attractive for distributors, manufacturers and others.

For most of its history, the Jacksonville Port Authority has focused on the Caribbean and, more recently, South and Central America, with Puerto Rico serving as its main customer: 70 percent of all goods that go to Puerto Rico flow through Jacksonville.

Asian trade through Jacksonville has been confined to automobiles -- with Toyotas, Daewoos, Mitsubishis and Nissans all being off-loaded at the port -- and transshipments, cargo that goes from, say, China to the Bahamas, where it's then loaded on a Jacksonville-bound ship.

The grail that local officials now seek, though, is a direct line carrying containerized cargo, the big, railroad-car-like boxes that can hold anything from clothes to household goods to machinery -- "basically anything you'd see on a store shelf," Schleicher said.

Good timing for Asia trade

A worker unloads containers from the Sea Cheetah at Talleyrand.

Special to the Times-Union

Most of the Asian-manufactured goods that Americans do see on their store shelves are shipped here through ports in California, three of which handles 40 percent of all containerized shipments passing through American ports.

Closer to Jacksonville, the ports in Savannah, Ga., and Charleston, S.C., are the big handlers of Asian imports in this region (although both are dwarfed by the Port of New York/New Jersey, which handles the most containers on the East Coast.)

The Georgia and South Carolina ports broke into the business by targeting it early and aggressively, particularly by building distribution centers in order to lure in customers that the cargo lines followed. The result: "The economic impact has been tremendous," said Robert Morris, spokesman for the Georgia Port Authority. "Thousands of jobs, distribution centers, maritime business, related manufacturers -- they have all have blossomed from this strong relationship we have with the Asian market."

Although Jacksonville is late to the party, it's trying to join the club at a propitious time, with both the economy and industry conditions on the West Coast setting the stage for shippers to look for additional ports to work with.

Asian imports have soared since over the past decade, jumping from about 28 million tons of goods coming into the United States in 1995 to about 42 million in 2001 to around 54 million tons in 2003.

"The first statement you have to make is you cannot not be in the China businesses," said Don Breazeale, president of Don Breazeale and Associates, a California-based freight industry consulting firm. "If you're going to be in the port business, you have to be in China. It's causing this enormous surge, far beyond what's been predicted."

That rapid growth has resulted in congestion headaches for West Coast ports, causing ships to sit and wait before even being able to dock, and leading to difficulties in getting cargo unloaded in a timely fashion.

"The West Coast is jammed packed," said Seeman Zimmerman, executive vice president of Far East Brokers and Consultants, a Jacksonville-based import company. "It's congestion at its worst. At Long Beach, a ship might wait two or three days to get into port -- just sitting there idle -- and when they get in, they might need three gangs to unload it and they get one. If [Jacksonville is] going to get it, this is as good a chance as any right now."

Shippers are also still a bit concerned about the labor situation in California, where a strike in 2002 shut down West Coast ports for 10 days. The contract negotiated following the strike will expire in about three years.

"Nobody's going to leave the West Coast," Breazeale said, "but they're preparing for problems. What a lot of them have that a lot of them didn't last time is a contingency plan."

Spinoff potential

Rick Ferrin, the executive director of the Jacksonville Port Authority, stands in front of the Dames Point Marine terminal property east of the cruise ship terminal. The Port Authority is working to attract an Asian shipping line and to develop 120 acres for its needs.

BRUCE LIPSKY/The Times-Union

If the Jacksonville Port Authority can use those situations to its advantage and sign up an Asian shipping line, it could be a boon not just for the port, but for a host of related businesses, from importers and exporters to manufacturers, warehouse companies and others.

Jacksonville-based Putnam Lumber, for instance, exports lumber to and imports finished product from Asia, using ports ranging from Savannah to Mobile, Ala.

"If we could get some regular service out of here, with competitive backhauls, I think we could really kick butt," said J. Ellis Crosby, president of the company. "We could develop some more business."

Trucking items to and from Savannah costs hundreds of dollars, Crosby said, money that could be saved if goods came into the Jacksonville port to be stored in Jacksonville warehouses.

The airport could see more freight being flown in, truckers could see their work increase and the area's three railroad lines could be utilized more, said Breazeale, the consultant. "You're going to give rise to more distribution, a lot more distribution," he said. "There's more customs brokers, more freight forwarders, more traffic. It's exponential."

Zimmerman, from Far East Brokers and Consultants, sees hundreds of jobs possibly being created. "It means a lot for the city: a lot of jobs and a lot of dollars," he said. "It will be a big help."

As well as employment created by the increased shipping, the opening up of a connection with the east could benefit Jacksonville by making it a more attractive place for importing and exporting businesses to set up shop, just like the port has attracted to Jacksonville manufacturers who sell products to the Caribbean.

"You have a competitive advance in terms of geography and reduced transportation costs," said Bill Cronin, senior manager for international trade in Enterprise Florida's Jacksonville office. "As the cost of doing business lessens, it becomes more and more appetizing.

"The port historically has been focused on north-south trade," he said. "This kind of closes the gap. With an east-west trade lane, the entire globe will be in our hands."

That type of environment also makes international trade more attractive to existing businesses, those who might not have tried to sell their products in other countries in the past.

"It's very important for businesses in Jacksonville to know the opportunities this might provide," said former Ambassador Marilyn McAfee, president of the World Affairs Council of Jacksonville and a board member at the Port Authority. "It has its own growth potential, not just in terms of cargo, but in terms of the spin-offs."

Sealing the deal

Of course, before those rosy predictions come true, the Port Authority actually needs a signed contract from one of the various shipping lines that carry goods from Asia, a development port executives said they hope to announce within a few weeks.

The port has been targeting a Japanese company and the executive team spent several days in California recently, touring the shipping company's terminal there and working out final details in the draft contract, which was sent to the company Friday.

The Jacksonville port has already convinced the shipping company that Jacksonville is the place to be, the executives said, pointing out the benefits of shipping through Florida's most northern port.

"What the steamship lines are really looking for is why they would come to your port," Schleicher said. "Why do you have the better mousetrap? People don't realize how hard it is for a steamship line to begin service."

What Jacksonville offers, he said, is a better labor situation than many ports, particularly those in California, as well as more room to grow than the other ports in the region have. The port also touts the transportation infrastructure of the area, with easy rail and highway access to everywhere from Atlanta to Miami and even the Midwest being within a day's railroad trip.

If the Asian carrier does come to the port, it would occupy a $170 million terminal built on 120 acres at Dames Point, a mammoth facility that in its first year of operation could increase the amount of containerized cargo the port handles by 50 percent.

The shipping line would also have an option on another 80 acres at the site, allowing them to expand up to where the port's cruise terminal is now located, a development that could take three to five years, port executives said.

According to the draft plan, the Dames Point land would be leased for 30 years, and the $112 million it would cost to build the terminal would be shared by the cargo line and the port, with the shipping company providing 70 percent to 80 percent of the money, Baker said.

"It's a pretty collaborative effort," he said. "This deal in no way, shape or form puts our long-term financial health at risk."

The port and the company are still working out the details on how the equipment at the terminal, including six huge cargo cranes, would be purchased.

Once the entire 200 acres at the site are in use, the steamship company would be bringing in the equivalent of 800,000 20-foot-long containers a year, more than doubling the 727,660 containers that moved through the port in 2004. In the first year of operation, the company is expected to bring in about 360,000 20-foot containers.

That increase would push Jacksonville into the top tier of ports both nationally and on the East Coast, putting it in the same arena as Savannah, which handled 1.7 million 20-foot containers last year. The additional business, when fully ramped up, would also create 3,200 to 3,400 additional jobs, both at the port and in related industries.

The arrival of such a company could also spur future development in the area.

As well as the area adding warehouse space for larger companies, the port has considered building a shared distribution center, which would allow smaller companies to lease space in a larger complex.

"If you begin to get multiple-use distribution centers going, then you can bring more users into the port. The opportunities will develop as facilities develop here," said McAfee, the board member. "Good businessmen always interested in doing business."

And once one eastern-oriented shipping line sets up shop here, it's likely that others will follow.

"I just got a call this morning, from another carrier" who is looking at Jacksonville, Schleicher said. "Three years ago, these people didn't know much about Jacksonville. Now, every time a decision is made, Jacksonville's name is brought up."

Having one shipping line that makes the jump into a new port builds credibility, said consultant Breazeale. "You have to get one carrier to put their toe in water and say 'I'm going to go there,'" he said. "At that point in the game, they'll find themselves getting other carriers."

For now, though, the port will just continue to wait and negotiate, hoping to get that first carrier signed up.

"This could be the single best thing to happen to the port since its inception," Ferrin said.

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Trade with China Will Mean Millions for First Coast

By Melissa Ross

First Coast News

JACKSONVILLE -- As Jaxport prepares to sign a deal with an as-yet-unnamed Chinese carrier, local business owners are also looking to increase their trade with the Far East.

Several dozen of them attended "Asia Now" Tuesday, a Chamber of Commerce event providing advice and information on trade with Asian countries.

"A rapidly growing economy is sucking in imports from around the world and I'd like Jacksonville to take advantage of those growth opportunities," said speaker Craig Allen, who's with the U.S. Embassy in China.

Meantime, the Jaxport deal would bring 3,200 jobs and millions in revenue to the area, says executive director Rick Ferrin.

'There's a tremendous potential for increased employment in Jacksonville in all sectors of the economy."

Ferrin says the deal would bring Jaxport to the volume levels of Charleston, S.C., and Savannah, GA, increasing container shipments by 50%.

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Port plans to announce deal with Asian shipping line

Tony Quesada

The Jacksonville Port Authority hopes to announce by the end of April an agreement with the first ocean shipping company to connect the First Coast directly to the Far East.

Roy Schleicher, senior director of trade development and marketing for the port authority, said the authority is finalizing financial terms with a Japanese shipping company with plans to introduce multiple routes to Asia, including ports in China and Japan. Schleicher said the carrier, which the authority is not yet naming in deference to the company's wishes to make a big announcement, will eventually move 400,000 containers through Jacksonville, more than twice the number the port moves now.

"We will surpass Miami," Schleicher said. "This will put us up there with the big boys."

When done, the agreement will call for the shipping company to operate out of a terminal to be built at Dames Point, between the port authority's cruise ship terminal and bulk handling terminal. The company will start operating on about 120 acres and is expected to rapidly expand to about 140 acres before growing to a maximum of about 200 acres, Schleicher said.

Schleicher said the Far East service won't begin for about two years, which is how long he expects it will take to build a new terminal.

While the Asian service is a long-term project, the agreement has developed exceptionally quickly. Although Schleicher said he knew company officials from his job at another port, those officials had not visited Jacksonville until October 2004.

"It's unique for someone in this industry to move this quickly," he said.

Schleicher said he had expected Evergreen Group, a Taiwanese company, to be the first carrier to have Asian service from Jacksonville. In June 2004, a contingent of port authority officials visited shipping executives in several Asian countries, but those contacts have yet to yield an agreement.

"With the others, things are progressing slowly, though they are progressing," Schleicher

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"We will surpass Miami," Schleicher said. "This will put us up there with the big boys."

Whoa, that's awesome. Miami is such an international city, and we'd surpass their port trade to Asia?

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That is how I understood it as well Lakelander.

Just some random Port comparison figures, I am just that type of guy.. Like to see the numbers. Data from:marad.dot.gov - pdf file

Containerized Cargo in 2003 plus ranking (International Trade as I understand it)

Miami moved ~764,000 TEUs (#11)

Jacksonville moved ~113,000 TEUs (#20) (400,000 would really help us here for volume - if it was immediate it would move us to #12)

For comparison:

Savanna moved ~1,124,000 TEUs (#5)

Long Beach moved ~4,664,000 TEUs (#1)

(TEU = Twenty foot equivalent unit)

More breakdown, including domestic information here: JaxPort

POM - pdf file

Total Foreign Cargo by port (Bulk, Tanker, Container): (2003) no ranking as neither are in the top 25

Imports- Import Data by region

Jacksonville 9,262,510,650 Kilograms - $8,901,072,668

Miami 4,163,702,203 Kilograms - $9,784,583,477

Exports- Export Data by region

Jacksonville 870,934,995 Kilograms - $2,333,652,072

Miami 2,197,841,231 Kilograms - $6,825,897,954

And just for laughs:

Cruise (4th quarter 2004) Source marad.dot.gov

Miami 439,700 passengers 171 cruses (#1)

For Lauderdale 379,400 passengers 206 crusies (#2)

Jacksonville 34,500 passengers (#12)

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Port pushing for dredging project

Money is in place but authority needs OK from the government before starting the work.

By TIMOTHY J. GIBBONS, The Times-Union

The Jacksonville Port Authority is pushing ahead with plans to dredge about five more miles of the St. Johns River, attempting three different ways to get permission to start the already-funded project.

Port executives met with government officials in Washington, D.C., late last week, discussing ways to get approval for the dredging, which would deepen the river to 41 feet on a part of the channel that starts near Dames Point and extends upriver to the port's Talleyrand Terminal.

Click Here for the rest of the article.

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It sounds like it will be a sure way to entise the cruise ships to dock downtown versus Blount Island. A deeper wider channel will support the boat traffic increase.

I loved seeing the cruise ships downtown!

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