2010 Plan Recommendations Position the Port of Virginia for Success in the 21st Century

The Port of Virginia is among the largest and most successful ports on the East Coast. Virginia Ports, which are owned and operated by the Virginia Port Authority, trade with more than 100 nations and account for an estimated 116,000 jobs throughout Virginia.

The Ports success is due to its ability to react to market conditions and maintain a strong mix of cargo, and a management philosophy of providing customers with modern facilities, responsive service and efficient operations.

Maintaining market share among competing ports on the U.S. East Coast is an ongoing challenge. To plan for future opportunities the Virginia Port Authority commissioned a team of maritime experts to assess the marketing, operations and facilities of the Port of Virginia and recommend improvements to position the Port for success in the next century. The VPA 2010 Plan is the result of this work.

Plan Execution

The VPA 2010 Plan was conducted by the consultant team of Vickerman, Zachery, Miller along with Mercer Management Consulting, Inc.; R.K. Johns Associates; Snead Associates; O.R. George and Associates, Inc.; and Leeper, Cambridge and Campbell Associates, Inc. It was completed in June 1995.

The team of maritime experts led by VZM followed two criteria in producing the plan - existing port-wide cargo handling capability must be maximized before developing new or improved facilities, and the plan must be market-driven with a balance between forecasted growth and cargo levels the Port can handle.

Each of the VPAs three marine terminals in Hampton Roads Norfolk International Terminals, Portsmouth Marine Terminal and Newport News Marine Terminal and the Virginia Inland Port in Front Royal, VA were studied.

Plan Findings

The study found that the Port of Virginia has experienced substantial cargo growth that has been successfully accommodated up to the mid-1990s by continually increasing efficiency of Port operations.

According to the VZM team, the Port has significant potential for continued growth. The study forecasts a possible 250 percent increase in containerized cargo by the year 2010, of which intermodal volume will increase 300 percent. Breakbulk cargo could increase by up to 200 percent. (The Port handled 9.1 million tons of general cargo in 1995, with 8.3 million tons of containerized cargo and 768,000 tons of breakbulk cargo passing over its docks.)

To attract the more than 16 million tons of general cargo forecasted for Virginia Ports by the year 2010, the plan identified more than $334.8 million in significant improvements to existing facilities and construction of new facilities in order to accommodate the potential cargo growth.

I, for one, believe these projections are conservative, said A. Russell Kirk, VPA Board chairman.

We must remain committed to taking advantage of the tremendous opportunities and growth outlined in the 2010 Plan, recognizing that investment and capital improvement projects in the Port are essential to meet the need of our customers growth.

Recommendations for each of the VPA terminals, with a focus on the expansion of NIT and the need for expanded onterminal intermodal rail access, is included in the plan.

The 2010 Plan also recommends addressing portwide issues that may affect potential development. These issues include:

"Allowing multiple rail carriers access to all VPA facilities. Multiple rail carriers would enhance competitive pricing and service options.

"The effect of vessel sharing agreements. The study found that partners in vessel sharing agreements maximize space by filling one ship to capacity with one or more carriers cargo rather than each partner sailing different ships not loaded to capacity. Carriers in these agreements may reduce the number of calls to a port or quit calling on certain ports altogether.

Tonnage levels for Virginia Ports may increase if lines under such agreements consolidate their business at the Port of Virginia and the Port must be able to handle the increase in business.

Port of Virginia Ideal for Container Traffic

Containerized cargo volume is nearly eight times greater than noncontainerized cargo volume at the VPA terminals.

The leadership of the VPA and its operating company, Virginia International Terminals, Inc., and their partnership with labor have been the key to attracting and keeping business from most of the worlds major container lines calling on the U.S. Atlantic Coast.

Container lines calling on the Port of Virginia can take advantage of deep water and room for increasingly larger vessels. Steamship lines benefit from direct access to Norfolk Southern or CSX rail systems and efficient, costcompetitive intermodal rail access to major inland markets.

And, the VPA, along with VIT and labor, continue to offer flexible, tailored services to the everchanging combination of container line customers. This flexibility is crucial to retaining current customers and attracting additional customers.

Over the years we have attracted most of the major lines because of our service, competitive rates, geography, labor climate, access to Norfolk Southern rail services and good motor carrier support. Once the major lines came here and then started rationalizing services through consortiums our position was solidified. We expect that to continue, said Richard N. Knapp, VIT assistant general manager.

According to the plan, an additional container facility will be needed by approximately the years 1997 and 2000 to handle the forecasted increase in container tonnage. (The four VPA facilities handled a combined total of 1,070,000 TEUs last year.) Currently, an intermodal container transfer facility, or rail yard, is being constructed at NIT to handle short-term needs. The facility, scheduled to be completed by June 1996, will increase capacity by 50 percent. The 2010 Plan calls for yet another facility at NIT to handle projected growth. Both NIT facilities will handle the intermodal needs of all of the VPA marine terminals.

The study also calls for improvements before the year 2005 to handle projected breakbulk cargoes. Portwide breakbulk capacity for VPA facilities is estimated to be more than 850,000 tons per year.

We must remain committed to taking advantage of the tremendous opportunities and growth outlined in the 2010 Plan, recognizing that investment and capital improvement projects in the Port are essential to meet the needs of our customers growth. A. Russell Kirk, VPA Board chairman.