JAXPORT Reports Sunny Forecast

JAXPORT officials were all smiles Tuesday as they reported a record-setting 2019 and a funding win for the harbor-deepening project that remains two years ahead of schedule.

More than 450 people attended the sold-out State of the Port 2020 event in Jacksonville, Florida, hosted by the Propeller Club.

The deepening of the shipping channel to 47 feet from its current 40 feet now is expected to be completed in 2023. According to port officials, $394 million has been committed or pledged for the $484 million project.

JAXPORT announced last week that the federal government had allocated funds for the next phase of the deepening of the shipping channel. Of the total $93 million federal investment, more than $57.5 million is included in the U.S. Army Corps of Engineers' fiscal year 2020 work plan. The remaining more than $35.4 million is allocated in the president's 2021 fiscal year budget.

"You may have seen the news that the federal government has just awarded JAXPORT another $93 million for the harbor deepening. It's another milestone for the project, which is the first of its kind to include funding from a private business. This funding, along with support from state and local partners, helped keep the project two years ahead of schedule," said JAXPORT CEO Eric Green.

With the $93 million, the federal government's total contribution would be $192 million. The state of Florida has contributed $70 million so far and has an additional $46 million in the work plan for 2021. JAXPORT itself has put in $58 million. Private partner SSA has contributed $28 million.

Green said the "infusion of federal dollars comes on the heels of a big year for us." That big year included SSA Marine breaking ground on a $223 million container terminal slated to be completed about the same time as the deepening project. In November, the U.S. Department of Transportation awarded JAXPORT a $20 million grant to enable the facility to accommodate 425,000 more containers annually on the expanded footprint.

Upon completion of the deepening project, the SSA Jacksonville Container Terminal at Blount Island will feature a vessel turning basin and have the ability to accommodate two post-Panamax vessels simultaneously.

"It's an unprecedented private-public partnership to build the terminal of the future," Green said.

"We've also expanded space for our automobile processors," he continued. "Nearly 700,000 vehicles moved through the port last year, maintaining JAXPORT's status as the nation's second-busiest vehicle-handling port."

AMPORTS last year added more than 22 acres for future auto processing and storage at the Dames Point terminal, according to the port.

"We set several port records in 2019. It was our fourth-consecutive year of record container volumes," Green said. "JAXPORT remains Florida's largest container port today. We also set a port record for cargo revenue."

He added, "JAXPORT generates 138,000 jobs in Florida. Cargo moving through our port supports more than $31 billion in annual economic output for the region and the state."

Among other 2019 highlights:

FreightWaves' SONAR tracks weekly U.S. Customs imports at JAXPORT.

• The port handed more than 1.33 million twenty-foot equivalent units (TEUs), a 5% increase from 2018.
• A total of 10.9 million tons of cargo moved through the port, a 4% increase over fiscal year 2018.
• Asian trade increased 55% over the past five years.

JAXPORT is the top U.S. port for Puerto Rican trade, according to a video of 2019 highlights presented at State of the Port 2020.

"Puerto Rico is an important part of our business and that continues today. About 50% of our container business is with Puerto Rico, and our commitment to the island is very strong. We're the first port to be part of the American Maritime Partnership, which advocates for the Jones Act," Green said, noting that the "domestic maritime industry creates 66,000 jobs in Florida. Many of those jobs are right here in northeast Florida."

Also in 2019, JAXPORT "recorded one of our largest military moves in port history. Over the span of three weeks in the fall, 2,500 pieces of military equipment … moved through Blount Island bound for a training exercise in Europe. As one of the nation's 17 strategic seaports, we stand ready 24/7 to move equipment for the U.S. military for national defense, foreign humanitarian aid and disaster relief. We are the only port in Florida with this very important designation."

Green said the port is investing in the liquefied natural gas (LNG) market as well. "As use of LNG expands globally, there is an opportunity that exists for LNG as a fuel and as a cargo type to continue to grow along with JAXPORT's position as a world leader in this space."

JAXPORT Chief Financial Officer Beth McCague said, "Diversification of revenue is a very sound business principle and we live and die by that. … We have diversity in trade lanes, we have diversity in ocean carriers and of course we have diversity in cargo mix. This is important because it protects us in a downturn. For instance, when events happen beyond our control, whether it be tariffs, whether it be economic or natural disruption in a particular trade lane, the impact is not so terrible because our revenue is split over so many segments."

Green added, "Because we are diversified in trade lanes across Asia, in addition to having a strong foothold in Puerto Rico and some other emerging markets, we didn't take a major hit from tariffs" and in fact handled more containers in 2019 than ever before.

McCague said the port won't be sitting back now that its record-setting year is in the books.

"The last master plan the board produced was in 2014. What it did was to prepare the port to be the port of the future, to prepare for deepening. Most of the strategies had to do with building infrastructure so that we were ready when the deepening was completed. When we fast-forward to today and look back at that plan, you will see that most of those infrastructure projects have been completed or are well underway. So now we turn our attention to the next decade and how do we mobilize the resources that we have so that the port and our tenants can enjoy great success going forward," she said.

"We will continue to build our diversification model. That's high on the list, but this time we'll be looking at mostly what kind of technology can we use to increase efficiency. We're putting thought also into topics that are high on everyone's minds, things like social responsibility, the environment and, of course, good governance."

Green said JAXPORT is entering a new era.

"We are in the age of e-commerce — next-day and even same-day delivery. You're not going to wait a week for your Amazon package to arrive. Now more than ever, shippers are looking to move their operations closer to consumers. Our location makes us a natural fit and we have a plan in place to take advantage of this opportunity. Deepening our harbor and investing in our facilities and focusing on the areas where we can capture more of the market share, including Asia, Puerto Rico and others, we're doing everything we can to ensure more Florida cargo is routed through our port rather than ports to our north," Green said.

Rep. John Rutherford, R-Fla., said JAXPORT's "success has been fantastic" and envisions more to come. As "some of the supply chains decouple from China and move into Southeast Asia, we're going to see that business come through the Suez and come to our port."

Federal funding is key to that success, Rutherford said. "The president just put $93 million in his budget, and we're going to fight like the devil to keep that in there through appropriations."

Image Sourced from Pixabay