By Savannah Morning News

10/12/07

The Jacksonville Port Authority plans to sign a deal next week with a major shipping line that wants to build a massive port facility along the St. Johns River, people familiar with the negotiations said Thursday.

Combined with the terminal now being built at Dames Point, such a project could push Jacksonville into the top tier of Eastern ports, creating thousands of jobs and transforming the city's role in the global supply chain.

Port officials refused to discuss details of the deal, citing concerns that premature disclosure of the shipping line's name could jeopardize negotiations.

Three people familiar with negotiations, though, say that Executive Director Rick Ferrin plans to sign a Memorandum of Understanding with a steamship company while on a trip to Asia next week.

Ferrin and other port officials, as well as Mayor John Peyton, will be in Japan for a meeting of the Japan-U.S. Southeast Association, an organization headed by Jacksonville businessman Tom Petway.

Negotiations over the detailed memorandum have been going on for months as the company and the port hammered out specifics. Signing is not certain, noted one person familiar with the process, although there appears to be no major disagreements still outstanding. Also, an actual contract - which the memo sets the stage for - would need to be agreed to before work on the project began.

"It's clear that additional capacity will be required to handle the volume of cargo projected to be headed to the East Coast in the next decade," said Robert Morris, spokesman for Georgia Ports Authority.

"Although we don't know any of the specifics, it will be interesting to watch as this develops," he said.

The second-largest container port on the East Coast and widely considered to be the fastest-growing port in the country, Georgia Ports handled 2.34 million 20-foot containers in Fiscal Year 2007, which ended June 30. Georgia's port, the fourth largest in the country, averages about 15 percent growth a year and is on track to handle some 6.5 million containers by 2017.

Jacksonville port officials say their new facility would bring to Jacksonville a volume of business similar to what's expected from Mitsui O.S.K. Lines Ltd. When that shipping line, whose terminal is under construction at Dames Point, opens at the end of 2008, it will establish the first major direct connection between the First Coast and Asia.
Once it ramps up, that terminal is expected to handle the equivalent of 400,000 to 800,000 20-foot-long containers each year. Two terminals of that size, combined with the 768,239 containers the port handled last year, would make Jacksonville the second- or third-largest port on the East Coast.

"It's going to put us on the map," said Daniel Teague, vice president of International Longshoremen's Association Clerks and Checkers Local 1593. Longshoremen with that union handle the paperwork associated with shipments.

"It's going to double the size of (the Port of) Jacksonville. We have been anticipating something of this nature."

Both that union and International Longshoremen's Association Local 1408, whose workers actually load and unload ships, have ramped up training programs in the past two years, aiming to have trained workers available as deals are announced.

Like the Mitsui terminal, a new facility would create about 5,000 jobs in the area, including 1,800 jobs directly at the port, plus up to another 3,800 in related industries, such as trucking, welding supply jobs and more.

Several hurdles would, however, have to be dealt with before a terminal - expected to be about 170 acres - could rise from the ground. Chief among them: acquisition of the property for such a project.

The port authority has been negotiating with a handful of landowners for the past year for several large tracts of land but has not yet struck a deal with any of them. Among the possibilities is a 100-acre tract owned by the U.S. Navy that the port has suggested leasing, and a 120-acre parcel owned by Zion Jacksonville Limited Partnership.

Because port officials would not discuss details of the deal, it's unclear how long building a terminal would take once land is acquired. The Mitsui terminal, however, will open up about three and a half years after that deal was announced.

Mitsui's arrival in Jacksonville was expected to stimulate more interest in the area by large shipping lines, who have been eyeing East Coast ports as the megaports on the West Coast grow increasingly congested. A number of larger players have expressed interest in the port over the past 18 months, with both South Korean company Hanjin Shipping and Japanese company NYK Lines sending the authority letters indicating they would like to set up shop in Jacksonville if space was available.