JAXPORT extends lease with Trailer Bridge, boosting shipping to Puerto Rico
The Jacksonville Port Authority announced a pair of agreements Monday that will position it for revenue and container growth.
One was an 18-year contract renewal with Trailer Bridge Inc., a leading transporter of cargo to Puerto Rico. The other was an agreement for JAXPORT to pay 100% of the money needed to raise power lines above the St. Johns River, allowing larger vessels to pass.
The Trailer Bridge renewal, approved by JAXPORT's board of directors Monday, will see the company pay $2 million annually in rent. Trailer Bridge also agreed to a minimum annual guarantee that calls on the company to transport at least 500,000 short tons annually.
The Trailer Bridge agreement is slated to bring in $62 million in revenue over the life of the contract. The lease will begin in November 2023.
JAXPORT CEO Eric Green said he has focused on instilling annual guarantees in the contracts the authority has signed with ocean carriers and terminal operators during his tenure.
“What that does for us as a port is it gives us the opportunity to look into the future during the duration of those contracts on what the revenue will look like,” Green said. "We just ran a revenue dashboard on what they look like in the out years. It’s phenomenal. In 2025, our revenues will jump double digit (percent) from where they are today. That’s assured because of the restructuring of the contracts that we have done over the last year and a half.”
More than 85% of cargo that arrives in Puerto Rico comes from Jacksonville. Trailer Bridge is responsible for 22% of all cargo that arrives on the island.
Puerto Rico Ports Authority Executive Director Joel Pizá-Batiz said the challenge is creating sustainable economic growth that is more focused on internal trade to the island.
“Having the certainty that Trailer Bridge is going to operate from JAXPORT for 18 years – we gave them last year a contract for 20 years — that gives us a lot of commercial certainty of how we can plan for the future,” Pizá-Batiz told reporters. “The services that Trailer Bridge proves are roll-on/roll-off. (It’s) a lot of machinery, helicopters and important cargo that cannot move on containers. That’s important for us.”
Earlier in the meeting, the board of directors unanimously approved a memorandum of understanding that will lead to JAXPORT seeking funding for raising the Fulton Cut power lines that stretch over the St. Johns River.
JAXPORT and JEA have been in discussions since 2017 about the power lines. In May, a JEA study found raising the lines from 175 to 197 feet would cost between $33.4 and $54.4 million.
Nick Primrose, JAXPORT’s chief regulatory officer, said the project will be completed by 2026. He told the JAXPORT board of directors that JEA leadership has assured that the utility’s board will sign the memorandum.
“This is a commitment that will start immediately as JEA goes into procuring their engineering design services,” Primrose said. “To get that process going, we will go through about a six-month permitting process for Army Corps of Engineers, and then about a 2 1/2 or three-year build to do all the power lines.”
As constructed, the Fulton Cut lines allow vessels with as many as 10,000 containers to flow through Jacksonville harbor. Once the lines are raised to 197 feet, Jaxport officials state ships with as many as 14,000 containers will be able to flow along the river.