INSIGHTREALTY GROUP, Inc.

 

Shipper, port strike major deal

South Korean steamship line plans $360 million container terminal.

 

By TIMOTHY J. GIBBONS, The Times-Union

 

The Jacksonville Port Authority signed a deal early today that paves the way for a second Asian steamship line to set up shop in Jacksonville.

South Korean company Hanjin Shipping Co. Ltd. agreed to a memorandum of understanding in Seoul about 5 p.m. local time (4 a.m. in Jacksonville). The agreement - signed by the company, the Port Authority and the mayor - takes the first step toward developing a $360 million container terminal in Jacksonville.

"Today's agreement with Hanjin underscores Jacksonville's new role in global trade," Rick Ferrin, executive director of the Port Authority, said in a statement about the deal. "With this historic signing, not one but two major players in the international shipping arena have given notice in a big way that Jaxport is the place to be."

Jacksonville broke into the ranks of major ports when it signed a deal in 2005 with Japanese steamship line Mitsui O.S.K. Lines Ltd., which plans to open its East Coast hub at the end of 2008.

Hanjin sees Jacksonville in a similar light: Its 170-acre terminal, slated to open in 2011, would be the Korean company's first operation on the East Coast, joining facilities it has in Long Beach and Oakland, Calif., and Seattle. It would have the capacity to handle the equivalent of 1 million 20-foot-long cargo containers, or 7.5 million tons of cargo, a year.

At full capacity, that would be slightly larger throughput than the terminal being built at Dames Point for Mitsui O.S.K. Lines Ltd, which could handle about 800,000 20-foot-containers a year when it's fully built. Combined with the 768,239 containers the port handled in 2006, both terminals operating at full capacity would make Jacksonville the fourth-largest port in the nation.

The memo does not state where the terminal would be located, but the port has been trying to buy riverfront land for over a year. Among the most likely sites is a plot of land along Heckscher Drive owned by Zion Jacksonville Limited Partnership for which the port has been intensely - and so far unsuccessfully - negotiating.

Port officials have been saying that another Asian steamship line was on the way since mid-2005, when it struck a deal with Mitsui, achieving the authority's long-held goal to set up container trade between the First Coast and Asia.

Historically, Jacksonville's maritime trade has looked south, to Latin America and the Caribbean, with Asian trade largely confined to the imported autos that glimmer in rows at Blount Island. Asian container trade, though, has a much more significant economic impact, with the large metal boxes filled with Chinese goods spinning off thousands of jobs.

Attracting Mitsui's attention made it likely that other companies would be on their way as well, port officials said.

Hanjin went on the record with its interest more than a year ago. In a letter to the Port Authority marketing department, the company said "over the past years we have come to learn of Jacksonville's importance and strategic location in the South Atlantic." Ultimately, the letter said, the company would want to operate a 150-acre to 200-acre terminal.

The Korean company is that country's largest carrier, moving more than 100 million tons of cargo annually all over the world. It also brings with it the strength of an alliance with a Japanese, Chinese, Taiwanese and German steamship line, the largest alliance of that type in the industry.

Over the past several years, the East Coast has become a more inviting place for steamship lines to call, with interest initially piqued by a strike by longshoremen on the West Coast five years ago. Now, a jump in the cost of land-based transportation and demand from big-box retailers who have established distribution centers up and down the Eastern Seaboard has turned that interest into action.

 

 

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