That will likely have some short-term effects on Jacksonville, where companies like Crowley Maritime Corp. and Sea Star Line LLC handle the majority of Puerto Rico's cargo. Nevertheless, Jacksonville Port Authority CEO Brian Taylor said he was confident Puerto Rico would remain an important component of the port and Jacksonville's business.
A long-term market requires long-term investment,” Taylor said during a phone interview with the Business Journal. “We'll continue to do the things we need to do to ensure the infrastructure there ensures a long-term position in the market.”
Even with Taylor reaffirming the port's support of Puerto Rican trade, he added that the island's struggles are indicative of the need for other strategic plans.“What's happening now is one of those other signals that says we need to ensure we're always diversifying our business,” he said. “That's what our strategic plan tells us we need to do: Grow and diversify. Short-term blips like this signal you need to do what you said you want to do, and that is diversify your risk and business.”
Part of the concern comes not only from news of Puerto Rico's struggles, but also because one carrier has failed in the market already. Last year, Horizon Lines Inc. was forced to discontinue its service when it was unable to compete in the trade lane.
“Some would say in the past there was an oversupply of capacity in the Puerto Rico market, which led to the demise of one of the carriers,” Taylor said. “Today it would appear that the trade is much more balanced for demand and supply.”
He added that he didn't believe the debt issue would be enough to disrupt the current shippers in the market.
“Even if there were a short-term reduction in volume,” he said, “there's enough of a balance in demand and supply that we would not see the likelihood of any other carriers leaving or exiting.”
The problem in Puerto Rico is so severe, the situation is already drawing comparisons to that of Greece. The governor of Puerto Rico, Alejandro García Padilla, has said that the debt is simply “not payable.”
Even so, Taylor said that not long ago, the United States had its own economic issues, the worst since the 1930s.
“There will be short-term challenges related to Puerto Rico,” he said. “But we'll work through those, along with our partners. It won't stop us in the long term.”
It's not just the port that plans to stand by Puerto Rico. Both Crowley and Sea Star Line released statements to the Business Journal reaffirming plans to continue sailing between the island and Jacksonville.
“Sea Star Line does not foresee the situation in Puerto Rico shutting down our operations as we provide goods to the 3.5 million citizens that live on the island. Sea Star Line is committed to the island for the long term and looks forward to introducing the Marlin Class vessels later this year,” Tim Nolan, president of Sea Star Line, said in a statement.
Crowley spokesman Mark Miller noted that not only has the company spent significant investment on Puerto Rico — including new container cranes and a new San Juan terminal — but also the company believes it has a role to play in aiding the state.
“Where the future health of the Puerto Rico economy is concerned, we believe we are part of the solution,” Miller wrote in an email. “It is important to remember that the needs of the Puerto Rico people for things like groceries, medicines and personal care products, furniture and fixtures, building materials, vehicles, department store merchandise, etc., are going to remain despite the government’s financial difficulties. And Crowley will be there now and in the future to serve our customers and ensure these goods get to market.”
Jensen Werley Crowley, Sea Star Line, Jaxport plan to stick with Puerto Rico despite $72 billion debt - Jacksonville Business Journal
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