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Hamburg Süd seeks bigger site


Jacksonville Business Journal - by Tony Quesada Staff Writer

JACKSONVILLE -- Hamburg Süd is working with the Jacksonville Port Authority on a memorandum of understanding for expanding the company's presence.

Hamburg Süd's ability to grow in Jacksonville is constrained on the roughly 35 acres it leases at the authority's Talleyrand Marine Terminal, where it handles its own ships and ships from Mediterranean Shipping Co.

The company moved 107,368 20-foot-equivalent units of containerized cargo through its terminal in 2007, compared with 90,800 in 2006, an 18.2 percent increase, according to data from the authority. Of that, Hamburg Süd's volume increased 53.8 percent from 37,716 TEUs in 2006 to 57,990 TEUS in 2007.

"It's pretty clear that we need to expand," said Juergen Pump, senior vice president of operations for Hamburg Süd North America Inc. "We will outgrow the Talleyrand terminal's capacity."

Ideally, the company would like to more than double, possibly triple, its footprint in Jacksonville, Pump said, noting the company's plans to put bigger ships into service.

"We're thinking more in the 100-acre range," Pump said from the company's North American headquarters in New Jersey. "If you do something like this, you want to plan for the future and not run out of space five years later."

Hamburg Süd's need for more space highlights the authority's need to acquire more land to accommodate existing tenants as well as new prospects such as Hanjin Shipping Company Ltd., which has a memorandum of understanding with the authority to develop a 170-acre container terminal.

While the authority is still working to acquire property big enough for Hanjin's plans, it expects a memorandum of understanding with Hamburg Süd to convey that its needs haven't been forgotten, said Roy Schleicher, authority senior director of trade development, marketing and customer service.

"The MOU we sent them to take a look at basically says if a piece of land becomes available that makes sense, we'll bring it to their attention," Schleicher said. "We have not narrowed down any particular property."

Although the authority doesn't have available land big enough for what Hamburg Süd envisions, it understands that its existing tenants' needs merit primary consideration, Schleicher said. "It's our duty and our honor to help them grow."

Strong growth in U.S. exports to Latin America has driven Hamburg Süd's expansion in Jacksonville, Pump said. Automotive parts are the fastest-growing export carried by the company.

Ships leaving Jacksonville go to Port Everglades before sailing to South America with stops in Venezuela, Uruguay, Brazil and Argentina.

"Our ships are pretty full going to South America," Pump said. "Based on forecasts, we would hope foreign trade will continue to grow."

With a bigger terminal, Hamburg Süd would consider adding Jacksonville to routes that call on Savannah, Ga., before sailing overseas, Pump said. Those routes include its U.S. East Coast-Europe and U.S. East Coast-Australia-New Zealand services.

The European service links Savannah and Philadelphia with Tilbury, England; Antwerp, Belgium; and Bremerhaven, Germany. The Australia-New Zealand service, which transits through the Panama Canal, stops in Cartagena, Colombia, before continuing to multiple ports in Australia and New Zealand.

Hamburg Süd would prefer its own local terminal. At its current site, the company also provides stevedoring through a third party for Mediterranean Shipping Co., which generates revenue that would be lost if Hamburg Süd were to operate from someone else's terminal.

The size of the property Hamburg Süd is interested in matches the property the authority acquired from Jax Maritime Partners LLC, about 30 acres, plus the adjacent 70 acres the authority is seeking to take by eminent domain from Keystone Coal Co. That property, which is about a mile north of the Talleyrand terminal, has also been mentioned as a possible site to lease to a coal company based on projections that such operations could generate sufficient revenue to help pay for harbor deepening.

Besides size, access to rail is vital to Hamburg Süd, Pump said. The company receives cargo containers from the Midwest via CSX Corp. (NYSE: CSX). "Jacksonville is our export gateway for the Midwest."

The soon-to-open TraPac Inc. terminal at Dames Point will not have rail access, although the authority hopes to build an intermodal container transfer facility nearby that could receive containers from Dames Point and the proposed Hanjin terminal between Broward Point and Drummond Point.

Keystone's property, meanwhile, has access to Norfolk Southern Corp. (NYSE: NSC) track.

If Hamburg Süd were to move from Talleyrand, it would make space available there for other companies. Authority officials have said repeatedly that it has prospective tenants that want to be on the port of Jacksonville if the authority had space to offer.

"Everybody realizes that the East Coast is going to continue to grow," Schleicher said.

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Revised: February 10, 2010 .

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