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Growth coming in trade with booming Brazil

Jacksonville Business Journal - by Mark Szakonyi Staff Writer

JACKSONVILLE -- One of the world's largest container shipping lines is adding another Brazilian port of call to tap into the country's booming economy.

Starting in mid-September, Hamburg Süd will add a weekly direct service from Jacksonville to the southern port of Navegantes, making it the fifth Brazilian port called on by the line, said Francis Larkin, Hamburg Süd senior vice president.

Hamburg Süd's increased service is only the beginning, as shipping carriers jockey to increase trade with the South American powerhouse, especially its southern region, which has experienced explosive growth in recent years.

Brazil is already Florida's No. 1 trading partner and Jacksonville's No. 2 trading partner, and insiders see even more potential growth, especially when it comes to imports. The main imports from Brazil are building materials, lumber, furniture, textiles and auto parts, with chemicals and raw materials being exported to Brazil. Ethanol, one of Brazil's largest exports, could also be added to the list.

Carriers, such as French CMA CGM, are expected to expand their service once the Mitsui O.S.K. Lines Ltd. terminal is completed in January 2009, said Raul Alfonso, director of container cargo in the Jacksonville Port Authority's trade development and marketing department.

The increased service could make Jacksonville the hub between north-to-south and east-to-west service connections. Mediterranean Shipping Co. also calls on Brazilian ports, but was not available for comment.

Increased service is a start, but Jacksonville needs a line straight to and from Brazilian ports, said Joshua Rodriggs, Jacksonville Port Authority manager of Latin American and intermodal sales. Hamburg Süd stops in five U.S. cities, including Baltimore and Charleston, S.C., before calling on Jacksonville.

Faster service

A direct line would provide faster service, making both sites more attractive for U.S. and Brazilian businesses. Rodriggs, who was born in Brazil, hopes to spur such a line with

his newly formed group, the Brazil-Jacksonville Alliance of Northeast Florida. The goal is to create a line from Jacksonville to southern Brazil, which is growing but is still easier to call on than busier ports.

The group's first step is to build a relationship with representatives in the Brazilian states of Paraná, Santa Catarina and Rio Grande do Sul. In February, Mayor John Peyton visited the latter. The alliance's focus is on Curitiba because it is the country's model city and economically aggressive. It has a strong intermodal system, an industrial park and dry ports.

"The saying is that, 'If something succeeds in Curitiba, it is bound to succeed in other parts of the country,' " Rodriggs said.

The next step is to get southern Brazilian companies together so that the alliance can tell shippers that there is a market for exports and imports. CSX Corp. (NYSE: CSX) is in talks with the authority on creating expedited rail service from Jacksonville to Chicago to handle refrigerated goods such as fruit from Brazil, said CSX spokesman Gary Sease.

Train shipments could also include ethanol, one of Brazil's major exports. Gate Biofuels Inc. is in talks with several Brazilian producers to import the fuel to its proposed 55 million-gallon terminal on Heckscher Drive, said Buzz Hoover, the company's president.

He said even with a 54 cents-per-gallon tariff, which wipes out the 51 cents-per-gallon blending credit, Brazilian producers are confident about an American market for their fuel. One reason for their confidence is that they're able to extract three times more fuel from sugar cane than American ethanol producers can get from corn.

Although the terminal won't be up and running for more than two years, Hoover expects other fuel terminals -- such as BP and Chevron -- to start importing Brazilian ethanol earlier.

 

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