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VIT signs 10-Year, half-billion dollar deal with shipping consortium
The Virginia Port Authority [VPA] announced that its operating company, Virginia International Terminals, Inc. [VIT], has signed its largest customer to a 10-year contract valued at more than $500 million.The customer, a shipping consortium composed of five carriers, was created after two consortiums CKY and HU joined forces. The consortium, now called CKYHU, includes the following carriers: COSCO, “K” Line, Yang Ming, Hanjin Shipping Inc. and United Arab Shipping Co.
“This cements our relationship with 100 percent of our customers for the next decade,” said Jerry A. Bridges, the VPA’s executive director. “The reason we have been able to bring these ship lines to agree to these long-term deals is because of the service VIT delivers and because of the room we have for growth. We know there is more business out there and we intend to go and get it.”
CKY had an agreement with VIT and that was incorporated into the 10-year consortium agreement with HU. Joe Dorto, VIT’s president and chief executive officer, said the negotiations with HU were ongoing for nearly two years. The expansion of the north berth at Norfolk International Terminals and reconfiguration of the terminal’s Central Rail Yard were important factors during the negotiation.
“Operational efficiencies are being created at NIT with the addition of three new Suez-class cranes. A central rail yard that will be served by highly-efficient shuttle carriers and double-stack rail service to the Midwest’s most important markets were both factors in the negotiations,” Dorto said. “The important thing to remember is that our work is not done just because we have signed all of our customers to long-term contracts. We’ll continue to work with these customers to get them to expand their presence here. We have the capacity, the facilities and the natural assets and that is a good formula for growth.”
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