Florida port is increasingly attracting autos and other wheeled cargo from overseas

The Port of Jacksonville is something of a bellwether for North America’s ro-ro business. Not too long ago, the Port of Jacksonville held bragging rights as the largest vehicle export port in the nation. But as changes come about in the conditions of international trade, so does the mix of roll on-roll off (ro-ro) cargoes at JAXPORT.
As the United States dollar has gained strength in recent years, U.S. exporters find it more difficult to sell overseas while imports become more attractive. That, combined with historically low oil prices, is reflected in the kinds of ro-ro cargoes being handled at the Port of Jacksonville.

“The cargo mix has changed a little in the last year,” said Frank Camp, sales and marketing director at the Port of Jacksonville. “As new customers have come and other economic factors weigh in, we have seen the volume of exports being balanced out by an increase in imports.”

Besides the effect of the value of the dollar at the macro level, low oil prices have meant that lucrative overseas markets, such as those in the Middle East and West Africa, which are dependent upon the sale of petroleum, have less buying power. Low oil prices also translate into relatively lower gasoline prices and that, in combination with the strong dollar, has been reflected in an increase in imports of larger and more expensive passenger vehicles such as SUVs.

“Exports have fallen off somewhat,” added Camp. “Some traditional export markets have cooled off but exports are not down dramatically.”

Most of the growing import business involves passenger vehicles, many from Europe and Asia, but a growing number from Mexico, which has attracted investments from just about every automaker internationally. Camp expects imports from Mexico to be a growing segment of JAXPORT’s ro-ro business.

US Southeast Market

In recent months, Porsche Cars North America, Inc. (PCNA) announced its selection of JAXPORT as its port of entry for new Porsche vehicles bound for dealers in the Southeastern United States. “Porsche conducted an extensive bid process and found JAXPORT and the selected processing company, AMPORTS, offered the optimum combination of efficiency, quality, and service,” said Howard Chang, vehicle logistics manager for PCNA.

This development followed on the heels of the announcement in February 2015 that Volkswagen Group of America would move its import facility for cars and SUVs, and its Southeast U.S. distribution operations, to Jacksonville. The Volkswagen business created 100 jobs at the vehicle processor AMPORTS and generated a capital investment of $3 million.

A renovated plant is being used to receive and process new Volkswagen, Audi, and Bentley vehicles. Volkswagen, Audi, and Bentley are transporting around 100,000 cars per year to Jacksonville.

Jacksonville’s attraction of the Porsche business soon after Volkswagen was no coincidence. Porsche vehicles travel on the same vessels as Audi, Bentley, and Volkswagen vehicles bound for the region.

On the export side, other than autos, Jacksonville still sees a good deal of heavy equipment, much of it manufactured in the Southeast, on their way to export markets. These include excavators, bulldozers, forklifts, and cranes, both rubber-tired and steel-tracked. Camp has also noticed that ro-ro carriers are increasingly carrying non-ro-ro types of cargoes out of the port of Jacksonville.

JAXPORT boasts three different terminals—Blount Island, Dames Point, and Talleyrand—all of which receive ro-ro cargo and all of which have active rail service to the dock. Blount Island is the largest of the terminals and receives the largest number of ro-ro vessels.

A newly-completed rail terminal, which as its name suggests, will be involved primarily in transferring containers to and from JAXPORT’s Dames Point terminal, may, in the future, also enhance the port’s ro-ro services at that location. Opened in April 2016, the first cargo move at the Intermodal Container Transfer Facility (ICTF) involved a high-level military training exercise, and included both containers and ro-ro equipment.

“The ICTF is probably not going to see a tremendous amount of ro-ro, although the first movement of cargo included ro-ro,” said Camp. “The interesting thing about the facility is that the rail line runs along some land that the port has available for expansion and which is looking now to be an auto terminal,” said Camp. “As a benefit of constructing the container transfer facility will have active rail near the new auto terminal.”

Expanded Panama Canal Impact

Camp expects that the expanded Panama Canal, scheduled to be inaugurated on June 26, will have an impact on the size of vessels that ro-ro carriers will be ordering. “I think the ro-ro carriers are looking at vessel size almost in the same way the container guys do,” he said, “to take advantage of economies of scale and lower the cost per unit of cargo they carry. Some carriers are already building larger ro-ro ships. They are not necessarily longer or deeper, because they still have to go to draft-constrained ports, but they are certainly wider.”

As far as Latin America is concerned, Camp sees “Mexico and everyone else.” The economies of most of Latin America outside of Mexico are challenged at the moment and aren’t playing a big roll in JAXPORT’s ro-ro business.

But Mexico looms large in the present and future of the Port of Jacksonville. Last year, 10 percent of JAXPORT’s ro-ro volume were vehicles originating south of the border. Camp expects the port to be in a good position to handle the growing volume of auto shipments coming out of Mexico.

“Ocean cargo out of Mexico will grow,” Camp predicted. “Rail is still primary but rail can handle only so much.”

As for the future, Camp expects Jacksonville’s ro-ro business to continue to grow. “Between the port authority, the auto processors, trucking companies, and ocean carriers, we have developed quite an infrastructure and expertise in ro-ro,” he said. “We have a huge piece of property at the port where we are looking to expand, so I don’t see any reasons why ro-ro should not grow in the future. It is one of the mainstays of our cargo mix.”