Exec: TraPac in good position once economy turns around

Slump has forced the company to scale back its cargo estimates.

Talk about tough timing.

Dennis Kelly spent three years overseeing development of the TraPac terminal, turning about 160 acres of Jacksonville riverfront into one of the most technologically advanced cargo terminals on the East Coast.

Kelly, regional vice president for TraPac, then moved into the new office just as international shipping headed into the stiff headwinds of a global economic storm.

The slump in trade has forced Kelly and TraPac to greatly scale back estimates for how much Asian-based cargo would pass through Jacksonville in this first year of operation.

But Kelly said today in a speech to The Economic Roundtable of Jacksonville that Jacksonville remains in strong position to capitalize on trade from Asia after the economy recovers.

“We’re probably going to see a decline for a while because of the economy, but it’s going to come back,” he said at the Davis College of Business at Jacksonville University.

He said it’s difficult to forecast when that turnaround will occur, but 2009 is shaping up as a tough year. Kelly said TraPac originally expected to move 120,000 to 140,000 cargo containers of all sizes in the first year at Jacksonville. He said the number will probably be 40,000 to 50,000 containers.

Before joining TraPac in 2006, Kelly worked 31 years for Dole Fresh Fruit Co. at port operations on the West Coast, East Coast, Gulf Coast and Caribbean. He moved to TraPac in January 2006.

TraPac, based in the United States, is a subsidiary of Mitsui O.S.K. Lines of Japan. TraPac also has terminals on the West Coast for Asian trade. Jacksonville is its first on the East Coast.

Kelly said the Dames Point area, which is where TraPac’s terminal is located west of the Dames Point bridge, needs a railroad connection that goes on the dock or near to it. He said the railroad extension “is critical for us to the get the full potential” of Jacksonville for capturing international cargo.

He said the TraPac terminal caters to cargo that is shipped by truck to the regional market of North Florida and Georgia. He said the rail connection would enable cargo to move quickly from ships to trains. With that link in place, shippers could deliver to markets in the Midwest faster by unloading in Jacksonville than they would by sailing farther up the East Coast to other ports, he said.

Kelly said the second component Jacksonville’s port needs is a deeper channel to handle the bigger ships that will come calling on the East Coast after the Panama Canal is enlarged.

Toward that end, he said TraPac decided it wouldn’t try to block Hanjin Shipping of Korea from being able to use the riverfront land where the Jacksonville Port Authority currently has its cruise terminal. Kelly said TraPac’s contract with JaxPort gave the company right of first refusal on that land if it stops being used as a cruise terminal. Even though Hanjin Shipping is a rival of Mitsui O.S.K., Kelly said having both companies operating in Jacksonville will strengthen the case “for deeper water, and that’s something that we really need.”

JaxPort officials have said it would cost $500 million to deepen the channel, though the amount will depend on how much dredging is done.

Kelly said Jacksonville will face competition from other East Coast ports also in the hunt for federal funding on channel dredging.

“It’s going to be interesting to see who gets it and when,” he said.

 

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