Author Topic: JAXPORT on the brink of international stardom!  (Read 891 times)


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JAXPORT on the brink of international stardom!
« on: May 31, 2010, 09:05:00 AM »

Hanjin - Cosco Oceania.

Yep, has to happen, rock through the Suez and JAXPORT is the first thing out of the box on the East Coast of the USA. Bloomberg has this to say about it:

The Port of Jacksonville’s newest weekly shipping service is notable not only for where it calls — booming Southeast Asia — but also for where it doesn’t, trade analysts say.

That the service starting in mid-May via the Suez Canal doesn’t call on any ports between Southeast Asia and the East Coast of North America is a “strong statement on how robust trade [operators] believe it is or will be,” said Peter Tirschwell, an international trade analyst.

“This is a very good sign,” said Dennis Kelly, regional vice president and general manager of TraPac Inc., which is owned by Mitsui O.S.K Lines Ltd. “This hopefully shows that the [economy] is turning around.”

Mitsui, along with its alliance partner K-Line, will call on TraPac’s container terminal at Dames Point after calling on Cai Mep, Vietnam; Shekou, China; Hong Kong; Yantian, China; and Singapore.

Shortly after TraPac’s terminal opened in early 2009, the international trade slump hit, dramatically reducing expectations of how much cargo it would handle. Before the slump, the terminal was expected to have about five weekly services, but with the new Southeast Asian service it will have four.

TraPac’s business decreased slightly in the first quarter of the year and Kelly expects business to begin picking up in June, but he declined to say how much handling was down. The amount of container tonnage handled by the Jacksonville Port Authority’s customers and tenants increased about 12 percent in February to nearly 180,000 tons, compared with the same period a year ago.

Mitsui appears to have weathered the trade slump well. The Japanese company reported $107 million in net income in fiscal 2009, which ended March 31. The reported net income was double its projection, and Mitsui expects to have nearly $1.4 billion in net income by fiscal 2015, according to Bloomberg News.

Mitsui’s shipping partners APL and Hyundai Merchant Marine can also place shipments on the service, increasing the number of customers that have access to the ships.

The service is different from many other North America-Southeast Asia shipping lanes via the Suez Canal because it doesn’t call on Mediterranean and Middle East ports along the way. Shipping companies often call on such ports to increase their access to cargo, but each additional port call makes it harder to keep to their shipping schedule, said Tirschwell, senior vice president for strategy at UBM Global Trade, a media and intelligence company specializing in trade and transportation.

“The thing to watch is whether they add ports of calls,” Tirschwell said. “That would suggest they’re not getting the volumes they anticipated.”

Since the service calls on Southeast Asian ports, it’s faster for the service to go through the Suez Canal than the soon-to-be expanded Panama Canal. Ships departing Asian ports north of Hanoi, Vietnam, have the shortest route to the East Coast using the Panama Canal, but ships departing ports south of that are better off passing through the Suez Canal.

Which U.S. and foreign ports are included in the service speaks well of Jacksonville’s growing role in Asian container trade, said Roy Schleicher, the authority’s chief commercial officer. First, all the North American ports aside from Halifax, Nova Scotia, are “powerhouses” with well-established Asian service.

“Two years ago we didn’t have” any Asian container service, Schleicher said. “Now we’ve got eight carriers to Asia.”

There are powerhouse ports on the Asian side of the service, too. Singapore has the world’s largest port and South Asian countries, such as Vietnam and Sri Lanka, are gaining clout as rising labor costs in China push manufacturing southward, Tirschwell said.

Schleicher said Asian imports could include coffee and apparel from Vietnam; crude and finished rubber from Singapore; and general goods from those ports and Chinese ports of call.

“If you walk into K-Mart or Walmart, the [imported general goods] are nearly everything but the food products,” he said.

Schleicher said exports coming through Jacksonville could be lumber, wood products, high-performance fibers and citrus. The service through the Suez Canal includes two Mitsui ships and seven K-Line ships, which each have a capacity of about 5,500 TEUs, or twenty-foot-equivalent container units.

Kelly said the shipping lines are considering bringing in larger ships with a capacity of up to 6,000 TEUs. Ships with a larger-than-5,500-TEU capacity could run into trouble getting through the Panama Canal, so the path through the Suez Canal makes sense for larger ships that are expected to be cargo-heavy, Schleicher said.

Suez and Panama canal officials say they don’t compete, but for certain markets they do, said Robert West, a Halcrow Inc. principal specializing in trade and transportation. That competition will drive down the rates they charge, making calling on East Coast ports even more attractive.

Read more: Southeast Asian trade route brings Jacksonville port uptick - Jacksonville Business Journal

And some people wonder why we are known as "The Port of Gold!"