Rick Ferrin joined the Jacksonville Port Authority in 1997, four years before it split from the Jacksonville Aviation Authority. At the time, Ferrin — who had come from the Port of Oakland — says Jacksonville’s port was a “second-tier” but the potential was obvious. When the two independent agencies split in 2001, Ferrin was named executive director and inherited a port that was generating about $24 million annually.
Today, after a late August reorganization, Ferrin is CEO of the one of the fastest-growing ports in the nation, one he says will be in the top three on the East Coast within a few years.
Friday, Ferrin sat down with the editorial staff of the Daily Record to talk about everything from getting through the recession to the cruise business to speaking to high school students.
How is business?
Business is OK. It’s not as good as we hoped it would be. When the Trapac Terminal opened, we thought 6-7 ships a week would call at that terminal. It’s been more like three-and-a-half. The good news is that we have those three. Our container volume in June of 2008 was about 500,000. This June it was about 550,000. I can’t think of any other port that is up. Automobiles are down. Last year, we moved about 675,000 cars (and other heavy equipment). This year, we will be lucky to move 500,000.
We are starting to see what I believe is the bottom in trading with South America and Central America.
What about the Hanjin Terminal?
We sent out an RFP (request for proposal) and qualified three teams of architects and engineers. We will meet next week (this week) to clarify (the requirements) and they will come back with a proposal for us. It looks like we will have a written proposal by the end of October and qualify someone by the end of November. It will go to our Board in December. The design and permitting process will take about 18 months and it will take 18-21 months to construct. It will open maybe as early as December of 2012, but probably the first quarter of 2013.
How did you get into the port business?
Really, because I was in the Army Corps of Engineers for 20 years. I was assigned to the Panama Canal and was the last U.S. Army Corps engineer in Panama in 1980. After that, I became fascinated with maritime and maritime construction. I wanted to know what made ships work and the logistics. When I went back to the Corps, I was the Deputy Commander of the South Pacific Division and the headquarters was in San Francisco. I have a master’s in soil mechanics, which is called dirt.
After retiring from the Corps, Ferrin then went to work for the State of California and the Port of Oakland. Eventually, he got a call from a headhunter who wanted to know if he was interested in the job of vice president of maritime in Jacksonville.
Speaking of port expansion, how many and what kind of jobs will be created?
The Hanjin and Trapac terminals are very similar in terms of job creation. Each will create about 5,700 new jobs. They will each create about $1 billion a year in positive economic impact. Most of those jobs are going to be local. Those jobs will be filled by people who are already involved or will become involved in some facet of the logistics chain. That means forklift drivers, stevedores, mechanics, people who will work on the tugboats and the trains and people who will drive the trucks and work in warehousing operations. Those are the direct jobs that relate to the processing of cargo.
Then you have the indirect jobs as well which support the industry. We’re getting away from calling the jobs direct and indirect and induced because the line that differentiates between the jobs has become a little blurry — at least that’s what the economists have determined. What the economists call them now are “port-related jobs.”
The entire harbor including JaxPort and the private terminals creates about 66,000 regional port-related jobs with an impact of about $19 billion right now. That’s up dramatically over the last five five or six years. In Jacksonville alone there are 23,000 port-related jobs, which is pretty significant.
How will those jobs compare salary-wise to the state and local average and will the higher-paying jobs be in management?
When you talk about all the jobs that are available at the port, a lot of the jobs don’t require a college education. For people who are simply not bound for college these are good-paying jobs. The average pay for somebody working at a terminal is about $45,000 a year. That’s for a high school graduate. The local average is about $29,000.
Are these jobs with the Port Authority or private sector jobs?
Only about 150 people work for the Port Authority. That’s the business model that was selected years ago. Jacksonville is a landlord port and I think that works very well. The problem with being an operating port is that you have a tremendous amount of overhead. That means if you’re not moving a whole lot of cargo you can get to be very upside down in your numbers.
Also, with an operating port there is also always the criticism that you’re using taxpayers’ money in the public sector to compete with the private sector. If you’re getting tax money you can cut prices to compete unfairly with the private sector. That’s something we avoid.
We are more like an agent for the (port’s) facilities. We are an enabler of commerce. We go out and raise the money, we design, build and maintain the facilities and most important we market the facilities.
When you were being recruited to come to Jacksonville what was your first impression of the opportunity?
I saw a port that had more potential than probably any port in the country. All it needed was some guidance and some leadership. The opportunities were amazing. Jacksonville had a list of critical ingredients that were already here that I didn’t;t see in other ports.
Number one, there was land that could be developed. The port had purchased most all of Dames Point. A large portion was purchased from JEA and the Culverhouse trust.
We were very close to having a dredging project together to take us to a (shipping channel) depth of 41 or 42 feet.
There was also tremendous support for the port. The (former Mayor John) Delaney administration supported the port. The City Council supported the port. The Duval legislative delegation supported the port and there was tremendous support in Washington (D.C.). It looked to me like Jacksonville was a port that was going to succeed.
Another important factor was that Jacksonville had bondability, the ability to go out and get more money. It’s also in a state that’s in the habit of giving ports money. That’s a habit I’d like to see increased.
How is the cruise industry?
Very healthy. Carnival is doing very well despite the recession. They had greater than double occupancy in August. The cruise terminal will be an issue by mid-2012. The property the temporary terminal is on is part of the Hanjin property. About a year before (Hanjin construction starts) we have to get serious and make a decision: do we stay in the cruise business or not?
When asked what the future of Jacksonville is in terms of business and the economy, a majority say the Port and its functions. Given the expectations, is it stressful on you? What’s it mean to know the public views the Port as a means to lead the way?
(on stress, laughing) No, no. (on leading the way) What we’ve been trying to do is get the message out that this Port is an incredible asset for Jacksonville. I think that Florida has been thinking its future is in tourism and expansion, but I don’t know if that’s going to continue. One of the things we’re so well suited for is to become a global gateway. I mean if you take a look at the railroads, the rivers, the facilities ... I’ll have two Post-Panamax terminals capable of carrying between 1.8 million and 2 million containers a year ready to go when the Panama Canal opens to Post-Panamax traffic. We’re ideally positioned for the Port and being a transportation hub to truly be the identity of Jacksonville.
With all the new jobs on the horizon, how are you getting the message out to the youth and community about the opportunities? How’s it going?
I talked to a group of 200-300 of high-schoolers this week at Ponte Vedra High. I didn’t know if they really got it, how much sunk in. Did they really understand this was a wonderful source of employment? Did they really care? I really didn’t know how I was being taken, how I was received. Most people I speak to are in their 30s, 40s, 50s, 60s .... their sense of humor is much different. Yesterday I spoke to a group at the cruise terminal ... some of the same high school students and college students and they were very receptive. One of the teachers who was at Ponte Vedra High the day before came to me and said, “Listen, it was fantastic. Don’t underestimate how much sunk in and how much was retained because we used it all afternoon.” I thought it was great. They’re getting the message. They’re from a port city that is going to be a global gateway.
What’s the latest on the Mile Point project?
(One mile inland from the Atlantic Ocean, the St. Johns River meets the Intracoastal Waterway. The southern flowing Intracoastal and the northern flowing St. Johns combine to provide very challenging tidal currents for cargo ships to navigate and the goal of the Mile Point project is to lessen the affect the current has on shipping. Currently, ships can pass the Intracoastal Waterway during two four-and-half-hour windows each day.)
The Army Corps. of Engineers is running a simulation to address the (tidal) current problem. What they have determined is that reconstruction of the current training walls is one way of doing it and has a price tag of about $60-65 million. So they are looking at a lower cost alternative, which would be widening that section of the river. Widening wouldn’t do anything, necessarily, to abate the current. What the widening would do is provide enough room for the ships to maneuver and compensate for the current. The channel is pretty narrow right there. We will know more at the end of (this) week.
Will it be easier or harder to find employees for the port once the terminals start using automated machinery? Will you be looking for button pushers or people with technological backgrounds?
We are going to need people with that technological background, but you are also going to have a lot that are button pushers. What you are really talking about when talk about automation is the movement of the cargo within the container yard.
How many people are being replaced by machinery? Not all that many. You are getting greater efficiency because you are moving cargo 24-hours a day and not having to pay overtime. It’s kind of a win-win because the automation is going to allow Hanjin, they are the ones who will be automated with the rail-mounted gantry container grid system, to move 800,000 containers on 90 acres as opposed to more traditional volume which would be somewhere close to 120 acres to get that kind of volume.
A former U.S. Ambassador to Bolivia recently stated that Cuba could be involved in trade with the U.S. in the near future. What is the Port’s outlook on Cuba?
Several of our tenants are in great position for that sort of thing because they have tremendous flexibility in the types of vessels that they use. Crowley (Maritime Corporation), for instance, runs a barge operation and the barge operation would be ideal for Cuba. Trailer Bridge runs a barge operation, as well. It’s the private tenants of the port that need to be working toward coordinating the opening of commerce with Cuba. Frankly, I don’t know if anything is going to happen until Fidel (Castro) dies. When the embargo is lifted, and I believe it’s a matter of time, I think we have a couple of tenants here at the Port Authority and also terminal operators, Crowley operates their own private terminal and Trailer Bridge is a tenant of the Port Authority, are ideally suited to make the trip and carry cargo to and from Cuba.
What about the relationship with local colleges?
It’s good, it’s very good. Florida State College at Jacksonville is also gearing up many of their programs to help create that gateway and attract students toward logistics. UNF has a program there in logistics that’s nationally accredited and renowned as one of the best. We’re very closely aligned with them ... I sit as a member of their steering committee. They’re frequent visitors to the Port. And I’ll tell you ... what I like about that group is that they’re very pragmatic. and they understand transportation and logistics, it’s not all theory to them. I want them to use us as an empirical laboratory, come down and take a look at what we’re doing then go back and show and teach the class.
What do you do besides run the Port?
I am a sucker for Porsches. I enjoy fishing inshore and offshore. If you like fishing, Jacksonville is a mecca. I don’t play golf, but I used to play racquetball, but I don’t anymore because I had a hip replaced. My wife (Prudential Network Realty President and CEO Linda Sherrer) and I love to travel. We just burned all of her American Express points on a trip to Europe. And, I love to cook.