Ports Plug Businesses Into World
Shipping Facilities Support Commerce Around Virginia
Posted: April 28, 2015
By VIC BRADSHAW
Daily News-Record
HARRISONBURG — If you live in the Old Dominion, someone near you probably has a job because of the Port of Virginia.
John Reinhart, CEO and executive director of the Virginia Port Authority, said the state’s four ports in the Hampton Roads area, the Port of Richmond and the Virginia Inland Port in Front Royal affect commerce throughout the state to a degree that most people don’t realize.
“We provide a service to all the commonwealth,” he told members of the Rotary Club of Harrisonburg on Monday in the packed banquet hall at the Holiday Inn.
Whether it’s exporting products raised or made in Virginia or importing materials used by state companies, the port system plays a vital role in the state’s economy.
According to an economic impact study of fiscal year 2013 conducted by the Raymond A. Mason School of Business at William & Mary, the port supported nearly 375,000 jobs — 9.4 percent of the state’s workforce — and $17.5 billion in employee compensation in Virginia, $60.3 billion in spending and $1.4 billion in tax collections. Virginia products totaled 4.5 million tons and $10.9 billion in receipts, and the port factored into $30.5 billion, or 6.9 percent, of the gross state product.
Among the local companies that do business with the port are Perdue Farms, Pilgrim’s Pride, Merck & Co., Shenandoah Growers, Daikin Applied, Montebello Packaging, Pactiv, Intrapac, Bravo Wine Imports, Dascom Americas and the Interchange Group. Andros Foods North America, the Mount Jackson company that announced a $73 million expansion last week, cited access to the inland port as a contributing factor in its decision to invest in its Shenandoah County operations.
Hobey Bauhan, president of the Virginia Poultry Federation, said approximately $195 million in poultry products produced in the state were exported in 2014.
Turkey Knob Growers Inc., based in Timberville, also uses Virginia’s ports for international apple shipments.
Dawson Williams, the company’s director of export sales, said Turkey Knob sometimes takes apples to the inland port to be moved to the shipping terminals via rail and sometimes has them trucked directly to the terminals. Depending on which countries are receiving its fruit, it also ships through ports in Baltimore and Wilmington, Del., because some countries use shipping lines that aren’t Virginia port customers.
In an average year, he said, Turkey Knob exports about $750,000 worth of apples, with 30 percent to 40 percent passing through ports.
“Norfolk is certainly an important port to us,” Williams said. “There’s no question about it.”
Fiscal Turnaround
Before Reinhart took over in February 2014, the ports operated in the red. They racked up an average of $17 million in operating losses a year for the last six complete fiscal years.
Nine months into fiscal year 2015, the ports are showing a $6.2 million profit, Reinhart said, and its revenues are on track to exceed $400 million for the first time.
The organization has set monthly volume records 11 of the last 21 months, including an all-time high of 229 twenty-foot equivalent units, or TEUs, last month. It handled nearly 1.4 million total containers and 2.4 million TEUs in 2014, both records representing increases of more than 7.5 percent from 2013.
The Port of Virginia was the third busiest on the East Coast in 2014, trailing only New York and Savannah, Ga. Reinhart said he thinks it can move into the second spot considering its recent growth.
To prepare for that growth, the ports plan to spend more than $2 billion over the next 10 years to upgrade equipment and improve access. A fifth port terminal in the Hampton Roads area is planned, and the potential deepening of the shipping channel to 55 feet from 50 feet is to be studied at some of the terminals there.
“All we’re trying to do,” Reinhart said, “is to be your port and to be your stewards.”
Contact Vic Bradshaw at 574-6279 or [email protected]
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