Jacksonville grabs greater slice of Asian imports

Jacksonville grabs greater slice of Asian imports

After two straight fiscal years of double-digit Asia import growth and gaining market share from Southeast competitors, the Port of Jacksonville is optimistic more is on the way thanks to improved intermodal access to the Midwest and guaranteed trans-Pacific services from the next phase of alliances.

Jacksonville just posted its healthiest fiscal year on record with container traffic up roughly 6 percent year-over-year for the 12 months ending Sept. 30. Asian imports, the fastest-growing segment of the port’s business, achieved 19 percent year-over-year growth, according to port officials.

Jacksonville’s share of the US Asian import market in the Southeast has also been making gains, according to analysis of data from PIERS, a sister product of JOC.com within IHS Markit. In the first nine months of 2016, Jaxport held 6.42 percent of that market, up from 5.52 percent in 2015 and 6.21 percent in 2014 — reflecting a more linear progression, less impacted than other ports by Asian cargo diversions during the 2014-15 West Coast port crisis.

Despite those gains, Savannah, Virginia, and Charleston still dominate the Southeast for Asian imports, enjoying roughly three times the number of Asian services as the Northeast Florida port, which has only four.

Those more robust Asian service offerings lead to larger control of Asian volume moving through the Southeast. Savannah, the busiest port in the region, controlled 46.22 percent over the Asian import market in the Southeast in the past nine-month period; Virginia, 22.37 percent; Charleston, 14.3 percent; and Miami, 7.55 percent. 

That breakdown mirrors the market share totals for total US imports in the first nine months of 2016, during which Jacksonville held 6.45 percent share of the total import market in the Southeast, compared with Savannah’s 32.1 percent, Virginia’s 24.7 percent, and Charleston’s 19.4 percent. 

Jacksonville is playing catch-up to those larger Southeast port for Asian business, having only entered the trans-Pacific trade in 2009. The port realizes it won’t be a mega-hub of the likes of Savannah, but it still sees potential to better service its regional penetration and reach into the Midwest. 

“Now, we are competing with ports like Savannah that had been there for a long, long time,” said Roy Schleicher, chief commercial officer at the Jacksonville Port Authority. 

The strength of Jacksonville’s land connections — via CSX Transportation and Norfolk Southern Railway lines, as well as interstates 95 and 10 — helps with that transition, said Dennis Kelly, regional vice president and general manager at Jacksonville’s TraPac Container terminal. The highly-automated facility alongside the port’s Blount Island Marine Terminal handle the totality of the port’s Asian trade.

 “Cost effective trucking, affordable land for development, access to rail, an available and well-trained workforce, and excellent highway connections, which all lead to our ability to deliver for our customers" are all playing a part in atracting shippers to Jacksonville already, Kelly told JOC.com.

A new $30 million intermodal container transfer facility, which opened adjacent to TraPac’s terminal earlier this month, will only strengthen Jacksonville’s connections to the US hinterland. Rail that connects to CSX’s main line there now allows for two unit trains to run from the facility each day and reach Chicago in two to three days. Additionally, an NS line is only a 20-minute truck dray from the TraPac terminal with comparable transit times to the Windy City.

Jacksonville is also preserving and strengthening its water connections to attract and retain Asian business. Today, the TraPac and Blount Island terminals share four Asian services a week between the two of them.

There have been some service rearrangements, Schleicher said, but those haven’t affected capacity. “The G6 Alliance dropped out one service and brought in bigger vessels, but we didn’t lose any capacity. They just traded out two small ships for one big ship." 

There may be future service rearrangements too, as the world’s shipping alliances redraw their lines heading into 2017. It remains unclear if Japan’s Mitsui O.S.K. Lines, the parent company of TraPac and a member of THE Alliance, will add a service. It’s also unclear how the merger of “K” Line, MOL, and NYK will affect TraPac in Jacksonville.

What is clear is the planned deepening of the Jacksonville harbor is aimed at not only keeping those services, but attracting new services, larger ships via an expanded Panama Canal and the substantial cargo discharges they both promise.

Jacksonville’s harbor in the St. Johns River can already accommodate the post-Panamax vessels with capacity for 14,000 twenty-foot-equivalent units now transiting the expanded canal — like the MOL Northern Juvenile, an 8,800-TEU ship. Those vessels, though, cannot be fully loaded until the harbor is deepened from 40 feet to 47 feet.

Schleicher said the port is making progress on the four-to-five-year project to deepen the St. Johns River, on pace with the harbor deepening project up in Savannah.

“Maybe second quarter next year we could have some shovels in the ground, or rather shovels in the river,” Schleicher said.

Miami and Virginia already boast 50-foot harbors capable of receiving ultra-large container ships. The Savannah Harbor Expansion Project, which is already underway and expected to be completed by 2020, will deepen the waterway there to 49 feet at low tide and 56 feet at high tide. Charleston, too, aims to deepening its harbor to 52 feet by 2020. 

Schleicher added, however, that deep waters are just part of the puzzle. “Everybody talks about deep water, every port does need deep water. But, we offer many other advantages and many more opportunities to customers.” 

When every port has deepwater harbors in less than a decade, he said, it’s going to be Jacksonville’s ample capacity, intermodal connections, and comparable transit and dwell times that will give it the advantage over Southeast competitors.

Contact Reynolds Hutchins at reynolds.hutchins@ihsmarkit.com and follow him on Twitter: @Hutchins_JOC.