‘A Deeper Channel Floats All Boats’:
The Port Economy as Urban Growth Engine
David Jaffee
Department of Sociology and Anthropology
University of North Florida
Jacksonville, FL 32224
Ph: 904-620-2215
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Author Biography
David Jaffee is Professor of Sociology at the University of North Florida. His areas of research and writing include social and economic development, political economy, organizations, and higher education. He is author of two books Levels of Socio-Economic Development Theory (Praeger) and Organizational Theory: Tension and Change (McGraw-Hill). Recent published articles include “Labor and the Geographic Reorganization of Container Shipping in the United States” in Growth and Change and “TheGeneral Education Initiative in Hong Kong: Organized Contradictions and Emerging Tensions” in Higher Education.
Abstract
This paper analyzes one particular type of urban growth strategy revolving around the port logistics economy in Jacksonville Florida. Led by the Jacksonville Port Authority (JAXPORT), the business community and city officials identified the maritime port as a leading engine of urban and regional growth. This case study will serve to highlight some of the ways in which the growth machine model and associated forms of “boosterism” represent a powerful and compelling framework for understanding urban development as well as the limitations revealed when applied to a development strategy based on distribution and goods-moving – as opposed to production, consumption, and goods-producing – and driven by the forces of globalization and the rise of logistics. More specifically, the demands of this sector for large-scale publicly financed infrastructure and the attendant uncertainties of success due to inter-port competition and the vagaries of commodity flows, pose unique challenges for this development strategy.
The analysis of urban political economy has been shaped heavily by the insights of the growth machine model (Molotch, 1976; Logan & Molotch, 1987) that posits the power and influence of land-based elites in advancing a pro-growth agenda. As urban areas develop plans for economic expansion, and advance particular strategies for local and regional economic development, they are supported by elite coalitions and promoted through the rhetoric of universal economic interest and civic boosterism. This paper analyzes various dynamics of an urban development strategy in the context of the recent growth agenda advanced in support of the Jacksonville (Florida) Port Authority (herein referred to as JAXPORT). This case study will serve to highlight and illuminate some of the ways in which this model and associated forms of “boosterism” (Cronon, 1991; Elfin & Wysong, 1990; Lessof, 2008; Boyle, 1999) represent a powerful and compelling framework for understanding urban development as well as limitations when the urban regional development strategy is tied to the goods-moving port logistics sector requiring public investment in transportation infrastructure (Erie, 2004)
Introduction and Background: Growth Machines and Port Economies
There are two widely usedperspectives that have informed the analysis of the process and dynamics of urban economic development initiatives. First is the growth machine model (Molotch, 1976; Logan & Molotch, 1987). The ability of the meta-theme of growth to mobilize and bind local elites is based primarily on the material interests of those who own land and commercial properties, and the prospect that growth will enhance the exchange-value of these assets. These interests contribute to the political mobilization of elites who seek to influence local government on fiscal and regulatory matters related to stimulating growth and land use policy. As a consequence,many other local urban actors and constituencies may also benefit from growth due to the resources that flow from an increasing population, income stream, and tax base. This model includes an equally critical dialectical element fueled by the “countercoalitions” that can emerge as growth infringes upon and threatens both the use values and the potential exchange values of urban spaces and suburban neighborhoods (Logan & Molotch, 1987). The mobilization of countercoalitions can thwart efforts of local elites to impose their land use preferences on the local population.
The second closely related aspect of this model builds upon the growth imperative as a form of civic boosterism that can serve to unify the community, mobilize public opinion, and shape identities of place. In this view, the ability of local elites to advance the growth imperative, and particular associated development projects, requires a range of strategies and tactics that serve both to convince the local population of the goodness of the growth plans as well as shape the larger image of the city and region in a manner that is consonant with the intended development. Boyle (1999, p. 55) has described these “efforts made by local elites to refashion collective emotion and consciousness within cities in order to legitimate political projects that function primarily in their interests” as “Urban Propaganda Projects”. While the term “booster” was originally used to describe land speculators in the American frontier during the nineteenth century (Cronon 1991),today it refers to any type of “promotion of regional economic growth” (Eflin and Wysong, 1990), and associated strategies or tactics (Gold & Ward, 1994). Boosterism has been the subject of studies of Sunbelt regions and cities such as Corpus Christi, Texas (Lessof, 2008), and Tampa, Florida (Eflin and Wysong, 1990) that have attempted to promote redevelopment, a new regional identity, as well as expand the tax base through tourism and particular forms of commerce.
This analysis considers the ways in which the local port economy is supported and promoted not only by the power of local and national economic interests competing for the provision of scarce resources but also through public legitimacy campaigns designed to mobilize public opinion and define the collective identity of the region.
In addition to these more familiar perspectives on urban growth strategy, one must also consider how the particular economic sector that is being promoted – in this case the port economy devoted to commodity transportation and distribution, rather than production or consumption -- shapes the application of the growth machine model and introduce several other factors in the analysis of the local political economy.The “port economy” is defined here as the constellation of economic activities that revolve around the transportation, logistics, and distribution of goods moving through a maritime port.
The growing significance of port economies over the past twenty years can be directly linked to the larger process of globalization and the dispersion of production, or the increasing distance between the point of production and the point of consumption (Bonacich & Wilson, 2009; Dicken, 1998). This is reflected in the well-established and growing literature on global commodity chains, global production networks, and global value chains (Gereffi & Korzeniewicz 1994; Henderson, et al., 2002; Coe, et al., 2004). Under a globalized production system, raw materials are extracted in one place, parts and components may be produced in another, manufacturing may take place in yet another, and final consumption still another. As the geographic space between interdependent activities in a commodity chain increases, transportation and logistics take on an increasingly vital role in the circulation and distribution of commodities.Not only operationally, but also financially, as there is continuous pressure to keep logistics and supply-chain costs as low as possible so that the comparative advantage gained from production in low cost nations is not lost in the transportation and distribution process. For the port economy, the primary focus is on “container logistics” which involves the intermodal movement of containerized finished and semi-finished goods from the nation of origin to the U.S. In this context, U.S. ports,and the urban areas and regions in proximity,serve as the spatial nodes through which global commodity/production chains flow via intermodal transportation to national wholesale and retail markets.
On the one hand, the port, as a node in global production networks, has increased in relevance and significance as a result of the spatial dispersion of production, the growing distance between production and consumption, and the subsequent need for transportation and logistics networks and gateways (Hesse & Rodrigue, 2004, 2006). On the other hand, the port economy itself engenders a spatially concentrated set of interdependent landside distribution activities, usually in urban settings (see Jacobs, Ducruet, & de Langen, 2010). Logistics related services are central to this concentrated activity, described by Bonacich and Wilson (2008:64) as “a special kind of industrial district, one geared to the process of international trade.” Rodrigue, Comtois, and Slack (2009) describe these areas as “freight distribution clusters where an array of distribution activities agglomerate” with the advantages of spatial proximity based on the factors of land, accessibility, infrastructure, planning and regulation, economies of agglomeration, and internal multiplying effects.
Within sociology generally, the greatest attention has been devoted to the processes of commodity production and consumption while there has been relative neglect of distribution and circulation (for notable recent exceptions see the work of Bonacich and Wilson, 2008; Bensman, 2008). Urban sociology has also tended to view cities as points of production and consumption, or centers for the agglomeration of high value services such as finance and information processing. However, the growing prominence of the goods-movement industries necessitates greater attention to cities as “terminals” (Hesse, 2008) or “gateways” (Notteboom & Rodrigue 2005) through which the flow of commodities is coordinated (Erie, 2004). The geographic expansion of the sphere of commodity circulation and distribution, linked logically to the spatial reorganization of production and consumption,points to the role of logistics as a potential growth strategy for cities and regions who seek to develop “logistics clusters” (see Sheffi, 2012).
Because container ship cargo coming from Asia, which makes up the vast majority of goods flooding into the US market, is “discretionary cargo” consisting largely of finished or semi-finished consumer goods, it is not linked or tied to any single geographic location. That is, it could as easily enter the ports of Los Angeles and Long Beach, though destined for the Midwest and the East coast (aka “landbridge”), instead of New York and New Jersey; similarly, cargo could be routed through the Panama Canal and into Jacksonville Florida or another East coast port to reach the same market. With cargo loaded into standardized shipping containers, and an intermodal truck and rail system capable of moving the containers rapidly throughout the United States, shippers and ocean carriers have a great deal of discretion over the port of call. This transformation in the nature of maritime cargo, and the loosening of the relationship between the port and its local economy and market, serve to intensify port competition which is now driven less by one’s particular geographic location than the port infrastructure, the costs of moving cargo, and the ability of the cargo to seamlessly move through an extended -- inter-organizationally and geographically -- supply chain (Fleming, 1989; Fleming & Baird, 1999; Notteboom, 2004; Jacobs, 2007).
Therefore, the analysis of the port economy as an engine of urban economic development may pose a different set of issues, challenges, and strategies than other forms of development. Accordingly, it may require a theoretical lens that incorporates the emergence and consolidation of neo-liberal styles of urban governance and development policy as well as the global forces that have fueled and reinforced these tendencies. More broadly, it is also likely to conform to the larger shift of sub-national governmental units -- such as cities, states, and counties – competing for and providing capital investment and thus playing less a “managerial” than an “entrepreneurial” role (Harvey, 1989). The former involved regulation, redistribution, and service provision whereas the latter entails neo-liberal supply-side oriented policies designed to attract, facilitate and subsidize capital investment and accumulation. As part of this larger shift toward neo-liberal economic policy at the international, national, and now local levels, recent trends in urban political economy have highlighted the growing significance of particular forms of public investment. Swyngedouw, Moulaert, and Rodrigues (2002) emphasize the importance of large-scale urban development projects (UDP) as part of the new urban policy (NUP). This form of urban governance privileges state-financed development projects driven by private–public partnerships but is restricted in scope to the imperatives of capital accumulation. Similarly, Brenner and Theodore (2002: 369-371) outline the creation of a new infrastructure for market-oriented economic growth, commodification, and the rule of capital. At the urban/local level the various strategies include new networked forms of local governance involving the establishment of public-private partnerships, the creation of privatized urban infrastructures designed to position cities within supranational capital flows, and the construction of large-scale megaprojects designed to attract investment and reconfigure land-use patterns. These emerging political-economic models of urban development will further inform the interpretation and analysis of the Jacksonville port economy.
The Case of Jacksonville Florida and JAXPORT
We can now place the case of Jacksonville in this larger context. Geographically, Jacksonville is located in the northeast corner of the state of Florida. The Jacksonville metropolitan area has a population of roughly 1.3 million. Downtown Jacksonville lies on the banks of the St. Johns River18 miles west of where the mouth flows into the Atlantic Ocean. The river serves as the channel for the JAXPORT marine terminals located at several points along its banks.
The Jacksonville Port Authority, also known as JAXPORT, dominates and determines the priorities of the Jacksonville port economy. JAXPORT is a government entity that operates as a private corporation. Local tax revenue is used for its operating expenses. As a “landlord port”,JAXPORTleases its land, terminals, and equipment to private maritime firms and this source of revenue supports expansion and maintenance of physical facilities and infrastructure.
In 2005 JAXPORT operated two major terminals; Talleyrand, located close to downtown Jacksonville, and Blount Island located closer to the mouth of the river. The cargo coming through these terminals was highly diversified among bulk, break-bulk, vehicles, and containers. The primary trade lane for JAXPORT was North-South with the Caribbean and Central and South America, and with the leading trading partner Puerto Rico (which does not qualify as “foreign” trade). The relatively low level of container traffic, coupled with the almost exclusive North-South trade lanes, made JAXPORT a relatively minor player in the U.S. port system.
A critical turning point for the Jacksonville port economy, and the emergence of the port as a major focal point for urban/regional economic development, came in 2005 when JAXPORTretained John C. Martin Associates to conduct a business and strategic analysis of the JAXPORTenterprise(Martin Associates, 2005). Martin Associates is the leading consulting firm for maritime ports in the United States; they conduct strategic plans and economic impact studies for many U.S. port authorities.The strategic plan included a comprehensive analysis of all aspects of the JAXPORT enterprise but, for the present purpose, the most critical component pertains to recommendations for expanding the port operation. The Martin report highlighted emerging opportunities for East coast ports generally and, in this plan, JAXPORT in particular.
At the time of the Martin Associates study (2005) there were three major factors fueling East coast port optimism. First, the high volume of containerized imports flooding into West coast ports, namely Los Angeles and Long Beach, was producing serious congestion problems for shippers and carriers. There were questions over whether the West coast ports could continue to effectively and efficiently absorb the projected increases in Asian imports. Second, the West coast had recently been the site of a costly labor dispute between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association in 2002 (Hall, 2004). The labor union representing East coast longshore workers – the International Longshoremen’s Association (ILA) – was regarded as less militant and politically radical than the ILWU (Jaffee, 2010). Therefore, the shipping industry was looking for additional and alternative ports through which to move their cargo. Third, and what would be a factor of growing importance in enhancing the potential role of East coast ports, the Panama Canal was planning to widen and deepen its locks (originally slated for completion in 2014) thus allowing the largest container vessels (known as “Post-Panamax” given their inability to traverse the canal due to width/depth restrictions) to travel directly to East and Gulf coast ports. Together, these developments were interpreted as representing a huge opportunity to capture additional containerized cargo as well as justifying the public and private investments in new and expanded port infrastructure. More specifically, Martin Associates recommended that, in order for Jacksonville to take advantage of these opportunities and move to the upper echelon of East Coast ports (with, for example, New York/New Jersey, Norfolk, or Savannah), it would have to, first and foremost, engage in the East-West Asian trade lanes and move many more containers.