Jacksonville wants a piece of the container-port action

JACKSONVILLE, Fla. - Driving up to a new 158-acre private shipping terminal in this northern Florida metropolis, Rick Ferrin shares his familiar refrain: "Previous to my getting here, Jacksonville was doing cars and Puerto Rico."

That's how it was when Ferrin left his last job as engineering director at the prosperous Port of Oakland, Calif., in 1997 to become executive director of the much smaller Jacksonville Port Authority, known as JaxPort.

At the time, he recognized that his East Coast foray would put him at a 'solid second-tier port,' one that ranked No. 2 in the country after the Port of New York and New Jersey for handling automobile shipments.

But JaxPort had little else to brag about. It had no Asian carriers calling at its docks, and nearly 80 percent of its business consisted of shipments to and from Puerto Rico.

A little more than a decade later, the JaxPort is emerging as a potentially formidable East Coast maritime player that gives stalwarts such as Charleston something new to worry about. Its newly opened shipping terminal, for instance, roughly doubles the number of containers it potentially could handle to 1.6 million annually. That's slightly less than the 1.7 million that came across S.C. State Ports Authority docks during the 2008 fiscal year.

Pat Barber, owner of Superior Transportation, said he always recognized Jacksonville as "a sleeping giant." The port's location, easily accessible from both Miami and Atlanta, along with its network of interstates and its strength in rail, warehousing and distribution centers, raise its maritime value.

"That's why I tell everyone not to become so focused on what Savannah has done," Barber said. "Jacksonville is the one we really need to be looking at."

Indeed, the taxpayer-funded waterfront operation at JaxPort now boasts an increasingly diverse business portfolio and a sense of buoyancy in otherwise rough seas for the shipping industry.

And Ferrin makes no secret of his port's success strategy. When taking the helm in Jacksonville, he set four goals: finding and acquiring property, designing and building terminals, maintaining existing facilities and equipment and marketing the agency. He said he plans to keep growing from here.

"You don't need any competitive disadvantage in this business," Ferrin said during a recent interview. "It's a really tight business, and we're all trying to steal each other's cargo."

Model ports

Ferrin said he saw major potential in Florida's first coast when he moved there a decade ago.

While the Port of Charleston boasts a naturally deep harbor, Jacksonville has its own logistical advantages. It's where three interstate highways converge - I-10, I-75 and I-95. And it's where trucks and trains "don't have to go north to go west," said Nancy Rubin, JaxPort's communications director.

"Sixty percent of the U.S. population can reach us in 24 hours by truck," Rubin said.

Another advantage, in Ferrin's view, is the JaxPort operating model, which is markedly different from Charleston's.

While the SPA owns and operates its terminals, JaxPort uses the so-called landlord-tenant system. Ferrin likens it to the Burger King motto: "Have it your way."

As landlord, JaxPort maintains equipment and provides security for its properties. It employs about 160 people, plus a few others through contracts. The SPA, in comparison, has 570 employees.

Ferrin said the newly opened private terminal in his city otherwise might have gone to Savannah, a mutual rival for both Jacksonville and Charleston, had it not been for his agency's business model.

He acknowledged that JaxPort, which reported about $40 million in operating revenue in its 2007 fiscal year, would likely earn more money if his agency was run like the SPA. Ferrin said he stands behind the landlord model.

"We like it that way, and our tenants like it that way," he said.

In South Carolina, where container volume has been slipping, the issue over private industry's role in running publicly owned ports is now re-emerging as a major issue both on the waterfront and in the General Assembly.

The push by lawmakers to revisit the SPA's hands-on business model intensified in October, when Maersk Line, the world's largest container carrier and the Port of Charleston's biggest customer, disclosed its intentions to move its business elsewhere over cost issues.

"Big leagues"

Jacksonville's efforts to diversify its port business by attracting more container lines isn't new, but the strategy appears to be bearing fruit.

JaxPort officials began courting Asian carriers as soon as Ferrin joined the agency. Eventually, a marketing representative set up shop in Seoul, South Korea, to do the same. Even Mayor John Peyton has made goodwill trips to drum up port business in Japan, South Korea, Scandinavia and Brazil.

The effort seems to have paid off.

Japan's TraPac, a subsidiary of Mitsui O.S.K. Lines, broke ground at Jacksonville's Dames Point in 2005. The $230 million terminal opened last month

with the capacity to handle the equivalent of 800,000 20-foot-long shipping containers each year. The facility is projected to generate an estimated $1 billion for the local economy each year and directly employ 5,600 workers.

Speaking at a grand opening announcement, Ferrin crowed that the completion of the TraPac project "signals JaxPort's move into the big leagues of international trade."

JaxPort said the extra capacity came after it posted a 4 percent increase in its container volume, as new business began calling on an existing terminal. Whether TraPac profitably can utilize all of that new space remains in question, especially as rival ports, including Charleston's, rush to expand at a time when shippers and shipping lines alike retrench.

More privately financed container capacity is on the way in Jacksonville, now the nation's 12th largest container port. South Korean steamship line Hanjin plans to invest $300 million to build a 90-acre terminal at TraPac's northern end by 2012.

"TraPac put us on the map and Hanjin takes us to the next level," Ferrin said in announcing the deal Dec. 10.

When both new terminals are operational, JaxPort will have tripled its container capacity. And cars and cargo from Puerto Rico will only be the half of it.

Reach Allyson Bird at 937-5594 or abird@postandcourier.com.