The Port of Virginia offers big advantages to steamship lines and shippers on multiple levels. It offers access to the large mid Atlantic market and a region between Hampton Roads and Richmond that some would like to see merged into a “mega region” to make it one of the top markets in the United States. The port provides connections to major worldwide markets. For those shipping via rail, the port offers connections as far away as Detroit and Chicago. Rail makes up 34 percent of all cargo that arrives and departs the port, the largest percentage of any seaport on the US East Coast. Truck traffic accounts for 62 percent; barge, 4 percent. Virginia Ports Authority (VPA) data for Calendar Year 2013 indicates the port’s markets down for containerized cargo as: 40.7 percent, Asia; 34.3 percent, Europe; 12.0 percent, sub Indian Continent and Middle East, and 8.3 percent, South America. A huge plus for the seaport is the Port of Virginia’s deep 50-foot water and no overhead limitations. This makes the port ready to accommodate the massive 1,400 foot long post Panamax ships that will be coming when the Panama Canal expansion is finally completed in what appears now to be 2016. Ports along the East Coast are competing for their share of the business with one of the deciding factors for steamship operators being deep water to accommodate their ships. An added fact in the Port of Virginia’s favor is it is the only US East Coast seaport with Congressional authorization for a 55-foot channel. Escalating Volumes August was a record-setter in terms of cargo volume handled. Joe Harris, VPA spokesman, told this AJOT reporter that he expects September also to be a strong month. “I would not be surprised if we eclipsed the August record,” he said. In fact, VPA officials see the consistent month-to-month increases in cargo as putting the port on pace for an historic year. In August, the port handled 214,355 TEUS and set its all-time high for TEU volume handled in a single month. The mark eclipsed the old record — just set in July — by 6,584 TEUs. August TEU volume is an 8.1 percent increase when compared with the same month last year. In a year-to-date comparison (January – August 2014 vs. the same period in 2013) the port is tracking a 6.9 percent increase: 1,558,781 TEUs vs. 1,457,742 TEUs. For the fiscal year that ended June 30, the Port of Virginia handled more than 2.3 million TEUs. Norfolk International Terminals (NIT) and Virginia International Gateway (VIG), the former APM Terminals, accounted for almost that entire total. Trade is balanced. From January to August 2014 export loads totaled 686,071 TEUs; import loads, 661,883 TEUs. Empties totaled 210,827 TEUs. Operating Issues Despite increases in traffic, the port remains plagued by a deficit of $137 million in losses over the last six fiscal years. That’s nearly $2 million in monthly operating losses.VPA figures indicate that the port ended FY 2014 with a $17.1-million operating deficit. In the last five of the last six months since John F. Reinhart, VPA CEO and executive director, came on board in February 2014 the port has generated an operating profit. August figures indicate a profit of $2.2 million—an increase of 168 percent over August 2013 figures. In the first two months of FY 2015 (July- August), the port’s combined operating income has been $4.20 million, a 91.3 percent increase when compared with the same period in FY 2014. Strong volumes and modest profitability have been earmarked as part of Reinhart’s goals for the port. Solving the port’s troubled finances is a top priority for Reinhart, who took his position after leaving Maersk Line Limited as CEO. “By no means are we declaring ‘victory;’ we have to become consistent in our delivery of service across the board and we are not yet there,” he said in a statement. We are moving in the right direction, and we are working to achieve the operational rhythm that translates into the high-level delivery of service that we’re seeking and that our stakeholders expect.” Under Reinhart’s leadership, efforts are underway to improve the delivery of service and cargo flow while controlling costs. “We’re continuing to implement constructive changes to better serve our customers and stakeholders,” Reinhart said. Action Points Since February, the port is taking a number of deliberate steps aimed at improving overall cargo velocity. These include a significant investment in technology and conveyance equipment, the reworking of manpower allocations, reactivated mothballed equipment, extended hours at gates and empty yards, reactivated an older, shuttered facility and when and where needed, set-up various express-type lanes to expedite bobtails, chassis-only and/or empty containers. “Additionally, we have reached out to some of our most important stakeholders and asked for their help in addressing our challenges,” Harris said. Specifically, on March 5, VPA created the Motor Carrier Task Force to help the port find ways to improve truck throughput. That task force is composed of representatives from the motor carrier community, service providers, the ILA, ocean carriers, shippers and US Customs and Border Protection. In addition, on May 26, 32 “yard hustlers” were leased and delivered to NIT to optimize rail operations. “These pieces of equipment allow for more efficient use of straddle carriers against the live gates,” Harris said. On June 20, VPA officials also unveiled its new Navis N4 operating system at its Norfolk terminal (NIT), which allows terminal workers to keep track of container cargo and volume coming in and out of the port. “The N4 terminal operating system is the industry’s most advanced technology and it replaces a 25-year-old legacy system,” Harris reported. “Right now we are fine tuning it for efficiencies it can provide.” The benefit of the N4 operating system is that it allows for better operational visibility; equipment utilization in the yard; efficiency with gate processes; event monitoring; and inventory management. Other recent actions include the reopening Portsmouth Marine Terminal (PMT) on September 15 and the implementation of an automated gate at NIT on September 30. PMT Reopened Harris explains to AJOT that PMT had been shuttered for almost four years and was closed “because we migrated all the cargo at PMT over to Virginia International Gateway (then APM Terminal) when we leased that facility in 2010.” VPA spent $7.5 million to get the facility reopened. “The biggest benefit to reopening PMT is this modest container-on-chassis operation will provide a measure of relief in the short-term to the gates at both Norfolk International Terminals and Virginia International Gateway,” Harris said. “ Our ceiling at that facility is 100,000 containers annually.” The first ship to call on the reopened PMT was the MSC Panama. “We think we are going migrate three other services over to PMT,” Harris revealed. Although Harris commented that he was not sure what services they are, he revealed that VPA is currently talking to them about how their positions at PMT would look. “We will take some smaller services from NIT and Virginia International Gateway (VIG) and fill those slots at PMT,” he said. “That will give us some breathing room. PMT will act as, in the short term, pressure release valve.” NIT and VIG are bumping up against full capacity. Unrelated to container traffic, for two months this spring, the terminal was used to stage Chrysler vehicles for an auto logistics company that was exporting the cars to China and South Korea. “Over the course of those two months, in excess of 65,000 automobiles were processed and exported from PMT,” Harris said. While the company is no longer engaged in this activity at PMT, Harris revealed that VPA officials believe there is a strong chance the car business will return. “This was a very good test,” he said. “The feedback from the company is that we passed with flying colors.” While automobiles are not big business at the Port of Virginia, some are currently handled out of Newport News. In FY 2014, the Port handled 34,254 automobiles. Currently, VPA officials see PMT as being a mixed-use facility. “The container operation that we have there right now is small,” remarked Harris. “Its footprint is about 30 acres. The terminal is in excess of 280 acres.” Harris explains that currently a small portion—about 4 acres is being used by a construction company for the layout of materials for the downtown tunnel project. “We will get that back,” he said. Meanwhile, VPA has had much interest in the terminal for container, ro-ro, automobile, bulk and break bulk business. “We don’t think PMT will be solely a container terminal,” he emphasizes. “It will take some time for plans to unfold. It has potential with 42-45 feet of water. It is a viable facility with rail on terminal, although we need to refurnish the rail.” “Reopening the berth at PMT to container operations is the first phase of a larger plan to establish the terminal as a multi-use facility and improve service to our customers,” Reinhart said. Reinhart reports that the reopened terminal will relieve container congestion at the NIT and the Virginia International Gateway. Truckers have long complained about congestion at the two terminals. That congestion is the result of the terminals operating above capacity. NIT Improvements On November, 30 NIT will see the phased-in implementation and enforcement of an appointment system for motor carriers that will regulate the flow of trucks into NIT and eliminate the “rush hour” effect by spreading gate moves more evenly during the day. “The appointment system will allow operations to better forecast for, and allocate assets on a daily basis,” Harris added. The appointment system also will be folded into the N4 terminal operating system and provide the ability to plan assets in accordance with appointments. According to Harris, a date for full enforcement, functionality and integration of the appointment system has not been pinpointed. “There will first need to be a measure of education and training on both sides of this project,” he said. VPA will also construct a new $31 million semi-automated motor carrier gate complex on the North Gate at NIT with the help of a $15 million Transportation Investment Generating Economic Recovery (TIGER) grant from the US Department of Transportation (USDOT). VPA is contributing $16 million toward the gate complex. The complex will have a direct link to the planned Interstate 564 Intermodal Connector, a critical stretch of highway that will connect I-564 to NIT and Norfolk Naval Station. The link will be built in parallel to the North Gate project. “Having the link to I-564 will take more than 740 truck trips a day off of local roads and give motor carriers direct Interstate access,” Harris said. The automated gate also will allow motor carriers quicker entry into the terminals. The technology automatically identifies containers, chassis, and license plates associated with equipment and enables automatic gate processing functions. “This technology will transform the gate into a quicker and free-flowing process and lead to reduced queuing and subsequent reductions in idling and emissions,” Harris said. Additional projects include the use of Differential Global Positioning System (DGPS) for implementation at NIT in December. DGPS is an enhancement to Global Positioning System that provides improved location accuracy for containers in the yard, meaning straddle carrier operators will spend less time “chasing” containers in the stack and more time used moving containers to and from awaiting trucks. Additional Measures Several additional measures have also taken place at VPA since February 10. These include new supervisory staffing at all operating areas (gate, transfer zone and rail operations), additional straddle carriers to serve expanded operations, increased frequency of maintenance of straddle carriers and other equipment to reduce downtime, the return of equipment that was in “mothball” status, the daily repositioning of chassis (including weekends) to balance chassis on yards and in the terminals, collaboration between ocean carriers and the port to add more chassis to the pool, the extension of empty yard hours to match terminal hours on weekends, and a program implemented in March to reduce the number of dead-lined chassis at the in-gate. VPA Inland Connections Meanwhile, the port is working to make greater use of its inland capabilities: The Port of Richmond (POR), which is located 95 miles inland on Virginia’s James River, and Virginia Inland Port (VIP), which is located in Front Royal. “POR is a shallow-draft barge port that provides its users a way to avoid I-64 and save a four-to-five hour roundtrip turn to Hampton Roads by using the 64 Express barge,” said Harris. The service, which is subsidized by the federal government, makes three calls a week. The port has regular weekly barge service to Baltimore as well, via Columbia Coastal. In fiscal 2014, the port handled 50,033 barge containers vs. 53,514 in fiscal 2013, a decline of 6.5 percent. Harris explains that the reason for the decline was due to a lot of diverted cargo that came to Virginia as a result of Super Storm Sandy last year. But Harris reveals that more shippers are exploring the use of barge. “Barge is a growing segment,” he said. “For this year, we are expecting solid barge numbers. It’s a product we offer that is unique.” ZIM and MSC offer a bill of lading all the way to the Port of Richmond. VIP is a traditional intermodal ramp that allows users to take advantage of on-dock, double-stack service to the marine terminals. On a fiscal-year basis, VIP containers were up 11.9 percent when compared with fiscal 2013: 35,305 vs. 31,537. “Both POR and VIP, and the Baltimore barge help to take pressure off the gates at the port’s marine terminals,” Harris explained.