by Mike Sharkey
Staff Writer
They say in order to win a war you must win the small battles. If that’s true, then chalk one up for Brunswick. The quickly-growing port just 90 miles up the coast scored a major coup recently when Volvo opted to consolidate its shipping business in the Southeast by shifting 30,000 cars a year from Jaxport to Brunswick. The decision didn’t stun Jaxport executive director Rick Ferrin, but it did help reinforce his belief that the battle for business between Jaxport and the Georgia Ports Authority is real.
The Volvo decision allows Wallenius Wilhelmsen, the shipping line that carries Volvos, to make one stop instead of two.
“They were making a dual call. Wallenius Wilhelmsen brings Land Rovers, Volvos and Jaguars over from Europe,” explained Ferrin. “They were dropping the Land Rovers and Jaguars in Brunswick and bringing the Volvos to Jacksonville. By cutting out Jacksonville, they save a lot of money.”
While the $500,000 Jaxport lost annually as a result of the Volvo decision isn’t the end of the world, it does mark a small victory for the GPA, which Ferrin says, is doing everything in its power to wrestle as much shipping business from Jaxport as possible. Much of the credit, Ferrin is quick to point out, goes to the GPA and the foresight it showed years ago when its leaders developed a solid business plan and stuck to it.
“The competition is very real. I know most of the senior staff there and they know us,” said Ferrin, adding that the relationship between the two entities is very cordial, but also very business-like. “But, I will tell you the competition for business is very real.”
Like many business and commerce issues, money is at the crux of the matter. When the GPA was formed in 1945, there were only two ports — Savannah and Brunswick — in the entire state of Georgia. Because Georgia’s coastline is only about 100 miles long, those two cities are still Georgia’s only ports of call. Subsequently, the state funding allocated for Georgia’s ports is divided in half and distributed to Brunswick and Savannah for everything from new facilities to marketing.
Compare that to Jaxport, which must compete for state funding with 13 other major ports of call (there are approximately 1,000 miles of Florida coastline). All of them want a portion of the fiscal pie and many have their own port authorities, which can further complicate the funding process for individual ports.
“Because there are only two ports in Georgia, there is a Georgia Ports Authority. So when it comes to state funding, they only write one bill,” said Robert Peek, the manager of public relations at Jaxport.
While funding is a major issue for Jaxport, getting and retaining business is a matter of logistics and facilities. Volvo’s decision was one of consolidation, not a reflection of what Jaxport doesn’t have or can’t provide. The statistics prove that Jaxport has — and can — hold its own with virtually any port in the country. By handling 580,000 vehicles last year, Jaxport was second only to the Port Authority of New York and New Jersey in the vehicle cargo business. Jaxport also handles cargo containers, bulk, break-bulk and liquid bulk. All of those goods combined meant Jaxport handled 6.7 million tons of cargo last year. And the breakdown between imports and exports was almost perfect.
“Last year we had 3.5 million tons imported and 3.2 million tons exported. That’s 52 percent in and 48 percent out,” said Peek. “It’s a great ratio because it means we’re not leveraged too much on either side.”
Both Brunswick and Savannah enjoy eerily similar breakdowns although Savannah’s numbers nearly quintuple Brunswick’s. For the 2001 fiscal year, GPA figures show that Savannah handled just over 10 million tons of cargo while Brunswick handled about 2.5 million tons. Both ports claim a nearly perfect 50/50 ratio in terms of imports and exports.
Diane Strickland, the manager of communications and external affairs for the GPA, said Savannah and Brunswick are quickly becoming preferred ports of call for several reasons: geography, available land and berths with the 50/50 import/export ratio serving as almost a bonus.
“That, too, is a major advantage,” said Strickland. “Shippers know they can bring in goods while exporting goods out of the same port.”
Brunswick is quickly becoming an automobile importing hotbed because of several factors. Car manufacturers like Volvo and Porsche are opting for the Colonel’s Island Terminal in Brunswick because of its 1,700 acres, three international auto processing plants and three berths.
“A majority of that terminal is divided to handle automobiles and machinery,” said Strickland. “Because of the three processing facilities on-site and berths, we are very different from other ports and have more to offer. And, we have ample room for growth.”
Up the coast in Savannah, a majority of the 10 million tons of commodities handled revolves around container, general cargo and bulk shipping.
Strickland agreed with Peek’s assessment that the GPA’s ability to address a focused demand on state-backed financial resources is a major advantage for the Georgia ports.
“In terms of the governor, whoever it may be, we receive a tremendous amount of support,” said Strickland. “They know we generate about 80,000 or more jobs. We create tax benefits and revenue. We are an important part of the state budget and planning process.”
Need more evidence that Brunswick and Savannah are breathing down the necks of other eastern seaboard ports?
“Seven years ago we were the 11th largest container port in the country,” said Strickland. “As of January, we were the fifth largest.”
As to how to stop the bleeding at Jaxport, Ferrin and Peek agree that the answer lies in future diversity and an aggressive marketing strategy.
“Our tonnage has been up every year between 1990 and 2000. We set a new record every year,” said Peek, adding that 2001 failed to continue that trend as a direct result of the Sept. 11 terrorist attacks and ensuing economic downturn. “Most of our trade is in Latin America and and that’s a great market. But, what we really want to do is diversify into Asia, Europe and Africa.
“We want to be diversified within our [trade] categories and diversified all over the world.”
In addition to actively pursuing a diversified trade business, Ferrin said a key to taking Jaxport to the next level of international shipping activity is the development of a major distribution center either on or near Jaxport property or at Cecil Field. Once that’s done, and Ferrin says it will happen, Jaxport can become a port of call for such distributors as BJ’s, Wal-Mart, Kmart or Home Depot.
“It is a major initiative and we are working very hard on it,” said Ferrin, adding he has one staff member dedicated solely to bringing a major distribution center to Jacksonville. “We are working with the Chamber and I feel it [the center] is a key, a critical element to growing our container traffic.
“Savannah has had continued growth, about 10 percent last year, which is the highest in the country. That is unprecedented. Ports like Los Angeles, Long Beach and Oakland are in the dumpster right now. They are in negative double digits in growth.”
Another factor Ferrin is counting on to abet the growth of Jaxport is the local transportation infrastructure. With two major highways and three railroads cutting swaths through Jacksonville — and a third major highway 75 miles away —Jaxport has the ability to unload and move cargo quickly.
“We can have cargo to half the country in 24 hours time,” said Ferrin.
Ferrin has lofty, but realistic, growth expectations. It would not be unreasonable, he said, to see Jaxport more than double its annual tonnage by the end of the decade. In fact, Ferrin is more optimistic than that. Once the Dames Point Terminal is brought on line and a distribution center is built, the possibilities become almost limitless.
“As soon as we bring Dames Point on line we will be able to do another three tons,” said Ferrin. “We may have a fourth auto processing plant at the Blount Island terminal that would handle another 140,000 cars a year. I can see us doing over 13 million tons in about six years.”
As Jaxport grows, so will the local economy. Ferrin said some recently published figures pertaining to Jaxport and its local economic impact were outdated.
“They were from a study that is about 10 years old,” said Ferrin. “We are about to do another study that will show there are 17,000 to 20,000 jobs directly connected to Jaxport with an annual payroll of about one billion dollars. If we double our tonnage I don’t know if we double those figures. It’s not a direct proportion. But, I could see 30,000 jobs directly related to Jaxport that will generate income well in excess of a billion and a half dollars.”
For Ferrin, every day is a relentless pursuit of new business. With Savannah and Brunswick quickly becoming major players in the shipping industry, Ferrin and his staff can’t afford to take a deep breath without planning ahead.
“This is never-ending. There is no sitting back and relaxing in this business,” said Ferrin. “If the port is not expanding, the port is dying. This is a battle I fight every day. This is what my staff and I do every day.
“Jaxport is an enabler of commerce. The trick is to do it in a fashion so that I can pay my bills and not rely on the taxpayers and incentives.
“When I talked to the mayor [John Delaney] about Jaxport, he said he wanted to see as much activity as possible but he doesn’t want me back every year with my hands out wanting a big check. That means we have to run effectively and efficiently and generate our own finances. It’s important that I’m mindful of bringing good jobs to Jacksonville. In order to that, I’ve got to be able to compete against a state with two ports whose entire focus is on those two ports.
“Brunswick and Savannah were very far sighted when they chose years ago to go after the Asian market. We now find ourselves playing catch up. They are not playing a lot dirty tricks; it is fair competition.”