Jaxport Finance

JAXPORT — Financial Profile

Jacksonville Port Authority

Florida's Largest Landlord Port — Revenue Bond Credit Analysis

Introduction

Jacksonville Port Authority (JAXPORT) is Florida's largest port by cargo volume and represents a unique credit story in the US port system. Unlike operator ports (e.g., Port of Miami, Port of Tampa Bay) that directly handle cargo, JAXPORT operates as a landlord port—it owns and maintains terminal infrastructure while private operators (SSA Marine, Enstructure, AMPORTS, Southeast Toyota Distributors) lease space and perform cargo handling. This structural design transfers operational risk to private tenants while JAXPORT collects stable, contractual revenue from long-term leases and per-unit (per-TEU, per-vehicle, per-ton) charges.

With FY2024 operating revenue of $70.0 million and outstanding revenue bonds of ~$129.8 million, JAXPORT maintains an investment-grade credit rating (Moody's A2 Stable, Fitch A Stable). The port's diversified revenue base—containers, vehicles, break-bulk cargo, cruise, and military shipments—reduces reliance on any single commodity. Completion of the 47-foot harbor deepening project and ongoing $238.7M container terminal modernization position JAXPORT for sustained growth in the competitive East Coast container market.

Entity Overview

Jacksonville Port Authority (JAXPORT) is an independent special district created under Florida law, governed by a 7-member board of directors serving unpaid, four-year terms. The board comprises three directors appointed by the Governor of Florida and four appointed by the Mayor of Jacksonville. Eric Green has served as CEO since his appointment in September 2017.

JAXPORT operates as a revenue-supported enterprise with no reliance on local tax dollars. All debt is secured by a first lien on net revenues from port operations.

Operational Performance

FY2024 Results: JAXPORT achieved record total operating revenue of $70.0 million, a 7% increase from $65.7 million in FY2023. Operating revenues are drawn from multiple cargo lines and terminal services:

JAXPORT's economic footprint extends throughout Florida and the Southeast. The port generates an estimated $44 billion in annual economic impact across the state and supports 228,100 jobs.

The Landlord Model: Risk Transfer and Structural Advantages

JAXPORT's defining structural feature is its landlord port model. Unlike operator ports that directly manage cargo-handling equipment, labor, and commercial operations, JAXPORT owns terminal infrastructure and real estate while private operators lease space and perform all cargo handling and vessel loading/unloading.

Operational Model: Private operators (SSA Marine, Enstructure/Wallenius Wilhelmsen, AMPORTS, Southeast Toyota Distributors) lease terminal space under long-term agreements and collect cargo handling revenue. JAXPORT's revenue derives from:

• Terminal lease payments (fixed annual or per-square-foot charges)
• Per-unit cargo charges (per TEU for containers, per vehicle, per ton for break-bulk)
• Dockage and wharfage fees (vessel berthing and cargo mooring)
• Crane rental and equipment fees
• Cruise passenger facility fees

Risk Transfer Advantages: By delegating cargo handling to private tenants, JAXPORT eliminates exposure to labor disputes, equipment obsolescence, and operational inefficiency. Private operators absorb wage inflation, union contract risk, cargo liability, and the cost of maintaining state-of-the-art cranes and material handlers. JAXPORT's role is to maintain channel depth, dock infrastructure, and terminal real estate—capital-intensive but operationally simpler. This structure makes JAXPORT's credit quality less dependent on operational management and more dependent on its ability to maintain long-term lease agreements and infrastructure investment.

Terminal Infrastructure & Capacity

JAXPORT operates three primary marine terminals:

Blount Island Marine Terminal

The flagship facility: 754 acres, 47-foot depth, the largest vehicle import/export center in the United States. Blount Island hosts four vehicle processors (AMPORTS, Enstructure/Wallenius Wilhelmsen, Southeast Toyota Distributors, and other operators), with 175+ acres dedicated to vehicle storage and 344,000 square feet of processing facilities. The recently deepened 47-foot channel enables post-Panamax containerships to call simultaneously with vehicle carriers.

Dames Point Marine Terminal

Acquired outright by JAXPORT in November 2023, this 158-acre facility hosts a container terminal and an intermodal container transfer facility (ICTF), critical for inland connectivity to Southeast rail and trucking markets.

Talleyrand Marine Terminal

Handles general cargo, break-bulk, and serves as a secondary ICTF location. Talleyrand provides flexibility for non-containerized imports and project cargo.

Bond Structure & Debt Profile

JAXPORT's capital structure reflects conservative debt management appropriate to the landlord port model:

JAXPORT's debt is senior-lien on all net revenues from port operations. The port pledges revenues from terminal leases, cargo charges, and ancillary services. Because JAXPORT operates as a landlord and does not directly absorb operational losses, debt service is protected by contractual revenue streams rather than operational margin.

Both the Series 2008 and Series 2012 bonds are approaching or in the refinancing window. Management should monitor market conditions and consider opportunistic refinancing to extend debt maturity and lock in favorable rates if available.

Capital Program & Growth Investments

JAXPORT is undertaking several multi-year capital initiatives to strengthen competitive position and capacity:

Harbor Deepening Project (Completed May 2022)

JAXPORT completed deepening of the Jacksonville Harbor from 40 feet to 47 feet over an 11-mile corridor, a $420M total project funded by federal, state, city, JAXPORT, and SSA Atlantic contributions. The project was delivered seven months ahead of schedule, and the Army Corps of Engineers issued a $35M refund to project sponsors due to dredge bids coming in below budget. The 47-foot depth now matches or exceeds most East Coast competing ports and enables the largest post-Panamax containerships to call.

SSA Jacksonville International Gateway Terminal (In Progress)

SSA Marine is investing $129.7M while JAXPORT is investing $109M (total $238.7M) to build a new container terminal at Blount Island. The terminal will occupy 80 acres (expandable to 120), be equipped with three new 100-gauge super-post-Panamax container cranes, and enable simultaneous berthing of two large containerships. The 25-year agreement includes two optional 5-year renewals, ensuring long-term revenue visibility. Over the first 10 years, the terminal is projected to support 3,500 jobs.

New Auto Processing Facility (Under Construction)

JAXPORT is constructing an 88-acre dedicated auto processing facility; construction began in early 2023 with a target completion in late 2025. This facility will consolidate and modernize vehicle handling capacity, supporting growth in the vehicle trade and reducing congestion at Blount Island.

Container Terminal Modernization (Blount Island)

Modernization of existing container handling infrastructure at Blount Island is targeted for completion in April 2025, improving throughput and reducing terminal dwell times.

Credit Analysis: Strengths & Risks

Credit Strengths

• Diversified Revenue Mix: Containers (1.34M TEUs), vehicles (696,500 units), break-bulk, cruise, and military cargo reduce dependence on any single commodity. Container market weakness does not collapse the port's revenue.
• Long-Term Contracts: SSA Marine's 25-year gateway terminal agreement and multi-year auto processor commitments provide predictable lease revenue over decades, supporting stable debt service.
• Landlord Model Risk Transfer: Private operators absorb operational, labor, and technological risk. JAXPORT's job is infrastructure maintenance, not cargo handling—simpler and more stable.
• 47-Foot Channel: Deepening to 47 feet (completed May 2022) ensures competitive parity with Baltimore, Norfolk, and other major East Coast ports. Post-Panamax vessels can call at full draft.
• Conservative Debt Ratio: ~$129.8M debt against $70M annual operating revenue is modest. Debt service coverage is estimated at 1.8–2.0x, manageable and investment-grade appropriate.
• Vehicle Gateway Position: JAXPORT is the largest vehicle import/export center in the United States. Auto trade is growing and offers high per-unit revenue (vehicles generate $15M revenue on ~696,500 units, far higher per-unit than containers).
• Military Cargo Diversifier: DoD shipments (+30% in FY2024) provide a non-commercial revenue floor insensitive to container market cycles.
• Florida Gateway Function: Jacksonville serves as the primary gateway for Southeast US interior markets, with road and rail connectivity to Atlanta, Charlotte, and inland distribution centers.

Credit Risks

• Scale Limitation: $70M revenue is modest relative to large-hub ports like New York/New Jersey (~$3B+), Los Angeles (~$1.5B+), or even smaller rivals like Savannah. Credit improvement requires organic volume growth or successful execution of the SSA Marine and auto facility projects.
• Container Market Competition: Savannah (SCPA) is growing toward 9.5M annual TEUs and is actively competing for the same Southeast interior market that JAXPORT serves. If Savannah gains market share, JAXPORT's container revenue could plateau or decline.
• Auto Market Cyclicality: Vehicle trade is cyclical with consumer auto demand. A recession or shift to electric vehicles sourcing could reduce vehicle volumes and the revenue that auto operations depend on.
• Channel Depth Ceiling: 47 feet is competitive but not class-leading. Baltimore (50 feet), Virginia (50 feet), and Charleston (50+ feet) offer deeper water, which may attract mega-ship operators if their draft requirements increase.
• Cruise Terminal Limitations: JAXPORT's cruise facility is modest relative to PortMiami, Port Canaveral, and Port Tampa Bay. Growth in cruise revenue is slower than containers or vehicles.
• Aging Debt Series: The 2008 and 2012 bond series are approaching refinancing windows. Future refinancing may face higher rates; rising interest expense could pressure debt service coverage.

Related Articles