Much of what it will take for the Port of Jacksonville to realize its goal of becoming a top East Coast port is out of the port’s hands.
A ban on federal earmarks and a slow-moving U.S Army Corps of Engineers are combining to push back the Jacksonville Port Authority’s plans to fix a major navigational problem and deepen the port channel in preparation for completion of the new expanded Panama Canal locks.
Since making a splash years ago by gaining pledges from Asian shipping lines Hanjin and MOL to build two terminals, Jacksonville’s container trade has grown steadily, but the business hasn’t soared as anticipated.
“We’re stuck in neutral because of the inaction of Congress and the corps (on the national) level,” Jaxport CEO Paul Anderson said.
Mile Point, a tidal problem preventing large container ships from calling at port docks nearly two-thirds of the day, hampers the port’s growth, particularly at MOL’s $230 million terminal.
The opening of Hanjin’s $300 million terminal is more than three years behind schedule and dependent on the port getting a deeper channel, which Jaxport expects by late 2018.
Anderson is confident local and state funding will pay for the $37.6 million fix to the navigational problem, but getting authorization through the traditional legislative vehicle, the Water Resources Development Act, may take until 2013.
MOL’s East Coast terminal hub has handled about 15 percent of its 800,000 20-foot equivalent container capacity since coming online amid the international trade slump in 2009. The terminal has had to turn away cargo because of draft restrictions caused by Mile Point, said Dennis Kelly, regional vice president and general manager of TraPac, an MOL subsidiary.
MOL “is supporting and pushing the terminal. Growth has been slow but steady,” Kelly said. “With Florida’s demographic of 18 (million) to 19 million people, MOL is totally committed to the terminal for the long-term.”
Anderson said Hanjin remains committed to making Jacksonville its East Coast hub via a 1 million-TEU terminal, despite the South Korean’s shipping company’s recent financial woes and the slow growth at MOL’s terminal. Hanjin wasn’t available for comment.
Jaxport hopes to deepen its channel from 40 feet to at least 46 feet, with a cost of about $600 million.
In addition to fixing its navigational hurdle and deepening the channel, the port needs to get on-dock or near-dock rail access to the new container terminals. Jaxport and CSX Transportation are applying for about $25 million in TIGER grants for a roughly $40 million intermodal container terminal.
It’s unlikely Norfolk Southern will have access to the planned intermodal terminal, and this may reduce the Asian terminals’ attractiveness to shippers. However, NS said it would keep its drayage rates competitive.
Providing Asian shippers with better intermodal access is key to Jaxport’s goal of becoming the preferred Southeast gateway. Realizing it will never surpass its main competitor, Savannah, in container handling, Jaxport is selling itself as an alternative to shippers looking for cheaper and faster service than the Southeast port juggernaut can provide.
Although it wrestled the top Florida container port title from Miami in recent years, Jacksonville’s TEU growth lags Savannah’s double-digit annual growth.
Jaxport expects to handle nearly 900,000 TEUs this year, up about 5 percent from 2010, despite a decline in core Puerto Rican trade business, said Roy Schleicher, Jaxport’s executive vice president. The port’s South American service is growing, giving Asian shipping lines further incentive to use Jacksonville as a north-south and east-west hub.
Including the roughly 200,000 TEUs handled by Crowley on non-port authority property, cargo totals are expected to reach 1.1 million TEUs for the entire port in 2011.
Jacksonville continues to see growth in its less glamorous but more profitable vehicle handling, with a 15 percent increase in traffic expected this year, Schleicher said. That should keep Jacksonville in the No. 2 U.S. auto handler slot behind New York-New Jersey, though vehicle handling will be down from 2008.
Anderson insists Miami’s ability to handle post-Panamax ships years before Jacksonville won’t hurt the Northeast Florida port. Shippers sending cargo into the Midwest and Southeast will still prefer to offload in Jacksonville, instead of trucking or railing goods from deeper south in Miami.
Schleicher said there would be enough container growth related to the Panama Canal expansion for all Southeast ports to benefit.