Container cargo through JaxPort could triple by 2035. Nearly 14,000 new jobs could be created. The regional economic impact could top $850 million per year.
But before that can happen, $684.2 million must be spent to deepen JaxPort’s shipping channel. A bit less if the scope of the project is scaled back.
The first installment of that money needs to be on the table within a year or else JaxPort will fall off a timeline, an outcome that would affect market confidence.
“I don’t think we’re running out of time as we sit here today,” said JaxPort CEO Brian Taylor. “On the other hand, if we were to reach a point in time where our customers see we’re not moving and other ports are, then I think that’s the tipping point.”
With the federal government slow to spend money on infrastructure, state and local funding will likely play a larger role than normal in starting the deepening project on schedule.
JaxPort wants to dredge its shipping channel from 40 to 47 feet in order to accept larger container ships, which have overwhelmingly grown to drafts of 45 feet or more industry-wide.
Dredging JaxPort to 47 feet would create almost 14,000 new jobs by 2035, a 2013 port study said.
Research completed this summer by The Boston Consulting Group said the 2016 completion of the Panama Canal expansion will divert as many as 9 million East Asia containers per year from West Coast to East Coast ports by 2020.
That’s almost three times the number of containers handled by all of Florida ports combined and twice as many as JaxPort’s main competitors to the north, Savannah and Charleston, combined.
“It’s going to be more than any one port can handle,” Taylor said.
JaxPort’s call to deepen its shipping channel is an effort that’s stretched across the tenure of three port directors. It has sent a signal to the industry that the city wants to be a player in the growing Asian container trade.
Now, the port is eight to 12 months away from completing its final preparation — a partnership agreement with the U.S. Army Corps of Engineers.
After that, dredging begins and so does the need for serious funding.
JaxPort is in competition with Savannah and Charleston. All three cities are positioned to not only capture container cargo for its own area, but for transport to destinations inland — Atlanta, Nashville, Memphis and Chicago.
Charleston is seeking to dredge its shipping channel to 52 feet. Savannah has already received funding to begin its 47-foot deepening. The industry is watching what Jacksonville does.
“What JaxPort needs is to send some kind of signal to the market as to whether they’re actually going to get deeper water,” Mark Szakonyi, executive editor of the Washington D.C.-based Journal of Commerce. “And the only way to send that signal is to say, ‘We’ve secured this much funding.’”
In the past, the federal government funded a large share of deepening projects – in the case of JaxPort, that commitment is supposed to be $312.7 million.
But these days, federal funds are scarce.
Last year the federal government allocated only $27 million for dredging Savannah’s harbor, Taylor said. It’s a project, like JaxPort, with a roughly $700 million price tag.
Federal dollars can be influenced by two congressional actions, said Nick Martinelli, deputy chief of staff for U.S. Rep. Corrine Brown.
How much funding Congress appropriates to the Army Corps of Engineers’ budget, and how many new projects it authorizes the Corps to start next year.
Bills passed, but not yet reconciled, by the House and Senate this year authorize zero starts and four starts for 2016 Corps projects, respectively.
“We would like to see about 10,” Martinelli said. “There’s a huge backlog of Army Corps projects.”
With federal support falling short, states have been picking up the tab for infrastructure projects.
Georgia is doing so for Savannah, putting up $266 million for its deepening. Florida has done the same, fronting the cost of a channel deepening at PortMiami and a navigational fix at JaxPort’s Mile Point.
How Florida might pay for deepening at JaxPort is speculative, said Doug Wheeler, president and CEO of the Florida Ports Council.
But in the case of Miami’s dredging, now nearing completion, Gov. Rick Scott had directed the Florida Department of Transportation to allocate money from its work program that was freed up by cost savings from other projects.
Taylor said he hasn’t talked with Scott about a dollar amount, but does believe the state will offer “some solid support” for the project.
One of the state’s requirements, though, will be for Jacksonville to also have skin in the game, he said.
Mayor Lenny Curry has been publicly supportive of the project, Taylor said. But no funding source or dollar amount has been discussed.
“I think until he gets his budget approved for the year he’s not quite ready to sit down and figure that out,” Taylor said.
The city’s budget will be finalized by the end of the month.
Wheeler said there are a lot of tools a city can use, one of which is issuing bonds.
The funding won’t need to arrive all at once, said Taylor, since the project will proceed in three or four phases. But each phase will need to be fully funded in order to begin.
JaxPort has done well in the past with diverse lines of business, and it will continue to develop them, said Taylor, a 30-year shipping industry veteran. But in order to participate in the global container trade, for JaxPort, there is no Plan B.
“If we want to be in that business, we will have to deepen this harbor,” Taylor said.
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