Lessons In Economics Economic Efficiency

1
Duval County Public SchoolsJacksonville, Florida
Economics Destination JAXPORT
2
Economic Efficiency
Written by Mary Chowenhill, Robert E. Lee High
School Patrick Curran, Jean Ribault Senior High
School Jacksonville, Florida April, 2006
3
Preview Questions

• What is a productive level of efficiency for the
  port?
• What type of business is JAXPORT?
• What types of competition does the port have?

4
Objectives

• To examine economic efficiency.
• To realize the point that economic efficiency is
  achieved.
• To learn what type of business JAXPORT is and why
  it is unique.

5
Goal

• To be able to explain economic efficiency as it
  relates to a business.

6
Key Terms

• Efficiency
• Capacity
• Marketplace
• Specialization

7
What is Economic Efficiency?

• Economic Efficiency is the wise use of available
  resources so that costs do not exceed benefits.

8
What is JAXPORT?

• The Jacksonville Port Authority (JAXPORT) is a
  maritime-focused independent government agency
  created by the Florida Legislature in 1963.
• Operating as a landlord, JAXPORT manages the
  upkeep, improvements and expansion of Port
  Authority facilities and coordinates their use by
  private companies.

9
What is JAXPORT?

• JAXPORT is governed by a seven-member Board of
  Directors. The Mayor of Jacksonville appoints
  four members and the Florida Governor appoints
  three members.
• JAXPORT operates like a business. Profits from
  JAXPORT are used to pay off long-term bonds that
  were issued for port upgrades.

10
Where is JAXPORT?

• The Jacksonville Port Authority is located on the
  St. Johns River.
• The Port has three cargo terminals
• Talleyrand Marine Terminal near downtown.
• Blount Island Marine Terminal, east of the Dames
  Point Bridge.
• Dames Point Marine Terminal, west of the Dames
  Point Bridge.

11
JAXPORT Facilities
JAXPORT Cruise Terminal
Dames Point Marine Terminal
Talleyrand Marine Terminal
Atlantic Ocean
Blount Island Marine Terminal
295
12
What does JAXPORT do?

• Each terminal has a different function
• Talleyrand handles
• Containers (Goods from computers to toys
  transported in a trailer)
• Break Bulk (Paper, chicken and steel)
• Liquid Bulk (Turpentine and corn syrup)

13
What does JAXPORT do?

• Blount Island loads and unloads
• Break Bulk
• Automobiles
• Any other type of roll on/roll off cargo
• Containers of food, electronics, furniture, etc.

14
What does JAXPORT do?

• Dames Point cargo includes
• Aggregate (Sand, gravel, etc.)
• In early 2008, the Dames Point Marine Terminal
  will start loading and unloading containers.

15
So why is it important that JAXPORT is efficient?

• JAXPORT is a public authority run like a
  business. They are in business to make a profit!
• Think of all the things that come through the
  port, like Toyota automobiles, along with many of
  the products that you use everyday

16
Economic Efficiency

• How can JAXPORT be economically efficient?

17
How can JAXPORT be efficient?

• One way for JAXPORT to be efficient is to figure
  out how many ships can berth at one time. The
  table on the right can help.
• Note The average ship is 700 feet long

18
So how do you figure capacity?

• Lets look at the Dames Point Marine Terminal
• Berthing Space1,200 linear feet
• Average Ship Size700 linear feet
• The Dames Point Marine Terminal can handle one
  ship at a time.
• The average stay for a ship is 12 hours.

19
So how do you figure capacity?

• Since the port is open 24 hours a day, 365 days a
  year, the capacity of the Dames Point Marine
  Terminal is figured like this
• Number of ships at one time..1
• PLUS ..Average stay...12 hours
• EQUALSNumber of ships in a day2
• TIMESNumber of days in a year...365
  
• EQUALSNumber of ships in a year..730
  
• But we all know that cant happen. Why?

20
Capacity

• To handle 720 ships a year, the Dames Point
  Marine Terminal must
• 1. Have another ship waiting to unload all the
  time AND
• 2. Have nothing at the port break down.
• Most economists consider a business efficient at
  80 of its capacity!

21
So when would JAXPORT be efficient?

• At the Dames Point Marine Terminal, JAXPORT would
  be efficient when they had 584 ships use that
  facility.
• 720 x .8 584
• 584 ships would be the Dames Point Marine
  Terminals maximum efficiency.

22
So how does JAXPORT make money?

• JAXPORT rents berthing space. When a ship berths
  to unload, they are charged a fee. This is how
  JAXPORT earns income.
• Lets say a 700-foot ship is docked for 10 hours.
  If JAXPORT were to charge 10.00 per linear foot
  for each hour the ship is docked...

23
So how does JAXPORT make money?

• Lets do the math
• 700 feet x 10 x 10 hours 70,000
• So JAXPORT has an income of 70,000 from one
  ship.
• But thats not their profit!
• Thats another lesson

24
Directions

• Read the Economic Efficiency Worksheet.
• Do the Assessment on page 2.
• After answering the Assessment on page 2, finish
  with the Assessment on page 3.
• You have 15 minutes!

25
Enrichment

• Look at JAXPORTs Website
• www.jaxport.com.
• List what information is available about JAXPORT
  on their Website and on the Internet.