Jacksonville
has proclaimed itself “America’s Logistics Center”. Almost every local public official and
politician has cited the Jacksonville Port Authority (herein Jaxport) as a
regional economic engine for job growth. Over $1 billion dollars in public
funds is being sought to dredge and deepen the St Johns River in order to allow
the largest container vessels to reach Jaxport terminals and expand this sector
of our local economy.
In
spite of the attention directed to the port as a source of economic expansion
for Jacksonville, most residents have little knowledge of what is involved in a
local economy revolving around a container shipping port, the logistics
industries, and the movement of goods. Most if not all of the information the
public receives about the port is produced and disseminated by Jaxport, local
businesses, the chamber of commerce, and stakeholders that may benefit directly
from the expansion of the port. What is absent is an independent critical
analysis of the port economy.
One
objective of The Ports Project at the University of North Florida is to raise community
awareness about the proposed Jaxport development strategy so that citizens can
participate more effectively in decisions about the future economic direction
of their community. Democratic citizenship and community engagement in public
affairs requires information and knowledge. This is especially important when large
sums of taxpayer money are being requested to support and expand the port
infrastructure. If the proposed projects move forward as proponents hope, there
are additional costs to be considered along with the widely touted benefits.
It
is important to situate the local port logistics sector in the context of the
larger global economy. Jaxport is just
one node among many in this larger global system of production, transportation,
distribution, and consumption. The primary objective of this system is to move
goods from the point of production to the point of consumption as quickly and
cheaply as possible. These commodity supply chains are often driven by large
retailers (e.g. Wal-Mart, Target, Home Depot, The Gap) who subcontract with
manufacturers in less developed countries (China being the leading source). The
goods are then moved to retailers and consumers using interacting modes of
transportation (“intermodalism”) involving truck, container ship, rail, and
air.
If
the major players in this system can locate nodes that allow for the cheaper or
swifter movement of goods to their final destination, they will choose these
locations as entry points into national consumer markets. It is within this system that Jacksonville
and Jaxport hope to gain a foothold and become a major national port and
logistics center.
Presently, there is intense competition among
East coast ports for an anticipated increase in the volume of cargo that will
result when the Panama Canal is expanded in 2014. This will allow the largest
container vessels -- crossing the Pacific Ocean from Asia -- to reach the East
coast. Currently, much of the Asian cargo entering the US has been through West
coast ports – namely Los Angeles and Long Beach – with containers placed on
rail cars and moved across the country to the East coast. This is known as the
“land bridge” method. When the Panama Canal expansion is completed, the largest
ships can take what is referred to as the “all-water” route through the Panama
Canal and up to East coast ports and markets. Jaxport, with its new container
terminals, is one potentially viable gateway for this cargo.
But
here’s the hitch. The St Johns River channel is too shallow to accommodate the
big “post-Panamax” container vessels that require a draught of 50 feet. Thus the
river must be deepened from its current depth of 40 feet to something approximating
50 feet. This involves a huge public infrastructure project that must be
approved by the Army Corp of Engineers and funded by Congress. The estimated
cost is $1 billion.
People
who have studied such “mega-projects” come to the following conclusion: those
advocating approval and funding will invariably overestimate the benefits and
underestimate the costs of the project.
The
St Johns deepening project is no exception. In terms of benefits, the greatest
emphasis is placed on the number of jobs that depend upon the port. But the
figure consistently used by Jaxport and public officials – 65,000 – is
overstated, based on my analysis of their data, by about 42,000. So the more
accurate figure is closer to 22,000 jobs that directly or indirectly depend
upon the port – not an insignificant contribution to the local economy.
Similarly,
it has been claimed that port-related jobs provide an average salary of
$42,000. But based on my independent analysis of the logistics occupational
profile the figure is closer to $30,000. This does include some high paying
jobs such as Ship Engineers, Logisticians, and unionized Longshore Workers. But
the vast majority of jobs would be concentrated in the warehouse/distribution
sector which provides low wage work with a heavy reliance on temporary workers.
(see the Port Project report “Jaxport as an Urban Growth Strategy: Community
Implications and Prospects” for the full analysis of the quantity and quality
of port-related jobs.).
An
associated claim is that channel deepening would not only sustain port-related
employment but expand the number of jobs based on additional cargo. The
experience of Savannah is instructive. The Army Corp recently granted preliminary
approval for the Savannah project to dredge and deepen its channel. As part of
the review process, the Corp also came to the striking conclusion that there
would be “no additional cargo volume through Savannah Harbor as a result of the
proposed harbor deepening”.
If
the deepening does not increase the quantity of cargo, it is unclear how the Savannah
project will increase the number of port-related jobs to any significant
degree. Therefore, with a cost to
taxpayers of $650 million, this dredging project would not appear to generate a
sufficient return on investment in the area of jobs. Instead, according to the Army
Corp report, the primary benefits will accrue to shipping companies, retailers,
and foreign manufacturers who will save $174 million in transportation costs
annually. Thus, the primary beneficiaries of this project are non-local
businesses and perhaps consumers, assuming the cost savings is passed on in
lower prices.
Before
Jacksonville and Jaxport begin the even more expensive St. Johns River
deepening project, the community should have an accurate picture of exactly
what the impact will be on the local economy and who will ultimately benefit.
This is vital not only because the project will use $1 billion of taxpayer
money, but also because the project will have a significant impact on one of
the most treasured features of the region – the lower St John River basin
(LSJRB).
As
stated in the annual State of The River Report: “The LSJRB in Northeast Florida
has long been recognized as a treasured watershed -- providing enormous
ecological, recreational, socioeconomic, and aesthetic benefits. However,
during recent years, it has also been recognized as a threatened watershed,
which is critically in need of resource conservation, water quality
improvement, and careful management.” One of the threats to the watershed is further
dredging and deepening.
The
Army Corp of Engineers will be conducting a comprehensive Environmental Impact
Study of the deepening project. At this
point, most observers believe one of the most significant effects will be
salinity encroachment into the river that will threaten and impact a variety of
river and estuarine species including marine mammals and plants.
More
specifically, the increased salinity would be expected to shift the
distribution of marine and estuarine species south (upstream) in the St. Johns
River while displacing the fresh water species that currently live in that zone
of the river. Aquatic or wetland species that cannot tolerate saline waters --
cypress, for example -- would be expected to die off as salinity
increases. A similar die off of
submerged aquatic vegetation, such as Tape Grass, which serves as food for
manatees and habitat for a variety of juvenile species of shrimp, crabs and
fish, would negatively impact those species as well. However, the degree of salinity increase that
may occur in the river is highly uncertain since rainfall, tidal cycle, storm
events and other river impacting situations are impossible to predict.
The
citizens of Northeast Florida should understand how this economic development
strategy will impact the larger natural environment, and the recreational and
economic activities that depend upon the river.
Almost
all forms of economic development involve tradeoffs – there are costs as well
as benefits. We may decide that the benefits outweigh the costs. But one can
only come to this determination with accurate information about both the costs
and the benefits.
The
port logistics sector currently plays an important role for the local economy.
There is the potential for the impact of this sector to increase significantly
in coming years. In order for the sector to have the most beneficial economic
impact, we should be discussing and pursuing those policies and practices that
will minimize costs and maximize benefits for the larger community. These
policies and practices should be based on and informed by the most accurate
data, the experience of larger ports, the existing research literature, and the
most socially and environmentally responsible practices of the industry.
Thank you for the information, I knew nothing about the intentions to deepen our river. Accurate calculations seems to be the only downfall about the JaxPort Project, other than that this seems to be a great way to help bring in more money for the Jacksonville community. Call me an environmentalist on the other hand, because I do care about what this development can do to our land. Will cheaper production lead to MORE pollution(of course) and environmental racism?
ReplyDeleteI needs to spend some time learning more or understanding more. Thanks for excellent information I was looking for this information.
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