NORFOLK
The Virginia Port Authority's terminal operating company has signed a coalition of ocean carriers to a 10-year deal worth more than $500 million.
The authority announced Tuesday that Virginia International Terminals Inc. reached the deal with the CKYHU consortium, made up of the Cosco, "K" Line, Yang Ming, Hanjin and United Arab Shipping lines. That group is VIT's largest customer.
With this deal, about 97 percent of VIT's business is locked into 10-year deals.
"I don't think there's any port on the East Coast that has 10-year contracts and that has that many contracts locked up," said Joseph A. Dorto, VIT's chief executive and general manager.
VIT has been pursuing such deals to guarantee revenue and to prevent business from defecting to the $450 million terminal opened in Portsmouth last year by APM Terminals. However, one major shipping line, Evergreen, recently announced that it was shifting one of its services from a VIT terminal to APM's operation.
The deal with CKYHU was signed late last week and dates re troactively to May 1, Dorto said. It had been in the works for almost two years.
It guarantees the movement of about 160,000 shipping containers annually through Norfolk International Terminals, the authority's largest facility. But Dorto said the group already is moving about 250,000 containers a year through VIT's terminals, about one-quarter of the total volume.
Dorto said Jerry A. Bridges, the state-controlled authority's executive director, played a key role in landing the deal. So did the physical improvements that the Port Authority is making to the Norfolk terminal, such as a larger berth and a larger rail yard for moving cargo containers.
Even with this deal, Bridges said the authority remains hungry for more business.
"We know there is more business out there and we intend to go and get it," Bridges said in a statement.
Gregory Richards, (757) 446-2599, gregory.richards@pilotonline.com
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We'd be better of without them?
Yeah... We'd be better of without them. What about all the people that work in distribution centers, Logistics companies, Truck Drivers, Ship Repair, Longshoreman, Port repair worker, Welders, and all kinds of other people that have jobs because of that port... I guess we'd be better off with out them to, huh? My dads worked at norfolk termial for 36 year and becauce of that place we'd be better off without, I have a good home to live in.
Billions and Billions
I keep hearing how the port is generating all this money, yet no one can present hard data on where this money is. The port itself only generates 72 million a year in operating revenue, and because of their expansion debt it would be operating at a loss without taxpayer support. Yet the partnership wants more taxpayer money to pay for billions in road improvements to facilitate more trucks from the port. If there are billions being produced because of the port, I would think the state could afford to pay for the ports roads.
100,000 workers and their families might disagree with you
An independent study conducted for the Va Port Authority by the College of William & Mary found that in FY2005-6, the VPA-owned terminals alone had direct and indirect economic impact in Hampton Roads to the tune of $12.3 billion in revenue plus $4.1 billion in compensation to 100,244 workers. This doesn't even include the new Maersk terminal, private terminals up and down the Elizabeth River, merchant shipments to the military or shipyard trade. Even an aircraft carrier sitting at the pier spends roughly $25,000 a day on electricity and land services.
An industry contributing $16+ BILLION a year to the region is hardly unimportant.
State General Fund gets the money - Tidewater gets the bill!
Yup, the General Fund gets all of the revenue from the state-owned port. Yet here we have the port lobby and the Chamber of Commerce business lobby workig to push the General Assembly and the Governor to have only us locals pay over $6.5 Billion dollars to build their $4.4B T-connector 3rd Crossing and a $2.1B "new" 6-lane RT 460 to Petersburg. Such a deal! You see, the port is planning to clog our highways with thousands of additional trucks EVERYDAY, and stick us with the tab to pay for more highway capacity. Face it, the port expansion is a net loss for those of us that live in Tidewater.
Too bad
that Hampton Roads gets none of this revenue. Instead it all goes to Richmond to be spent on non-transportation items that aren't even local. It is also too bad that our pathetic representatives cannot or will not do anything to pressure the General Assembly to reinvest some of this money in infrastructure that generates it. So who cares what the VIT, PMT or any of the other port entity accomplishes. We'd be better of without them!
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