Port of Virginia is an economic engine
Published 10:25 pm Tuesday, November 11, 2008
Logistic, distribution and warehousing centers are a targeted business sector that Franklin and Southampton must take advantage of for new economic growth.
Clearly, the Port of Virginia, located in our Hampton Roads region, is the engine driving this potential growth. In order to provide an overall perspective, let’s first look at an overview of the port, the impact on Virginia’s economy and how the port’s future can be our future.
When someone says the “Port of Virginia” they are really talking about all of the port terminals that provide an opportunity for goods to be imported or exported. There are five major port facilities in Virginia: the Norfolk International Terminal, Portsmouth Marine Terminal, Newport News Marine Terminal, Virginia Inland Port and the privately owned and operated Maersk — A.P.M. Terminal. The majority of goods entering or exiting the Port of Virginia are usually shipped in 20-foot or 40-foot metal containers, the exception being the Newport News Terminal, which is a bulk transportation operation.
In order to understand how the port tracks its growth, a container is classified for reporting purposes as a “TEU” or 20- foot equivalent unit.
In fiscal year 2007 the Virginia ports had 2,055,864 TEU containers pass through their operations and in fiscal year 2008 there were 2,144,361 TEU containers, a 4.3 percent increase. Once the containers clear the customs process, 66 percent of them travel by truck and 31 percent travel by rail to the inland markets. Generally, most containers are delivered to warehousing and distribution centers that further break them down to individual shipments to either retail stores or manufacturing or assembly operations.
It may be interesting to note that Asian and Northern Europe countries make up over 60 percent of the import and export markets for the United States through the Virginia ports. What would you guess to be the leading products being imported? If you are sitting down in a chair as you read this, you should have guessed “furniture” as being the No. 1 commodity. Furniture is followed by auto parts, tobacco, beer and ale, and rubber.
Advantages of the Port of Virginia are many and include the following:
* A 50-foot channel depth — the deepest on the United States’ east coast allowing for large container ships to enter the port.
* No obstructions between the port and sea which would limit the size of ships.
* Receiving the “Gold Seal of Approval” from Maersk-A.P.M. Terminal which just completed a privately funded $500 million, 300 acre terminal located in Portsmouth which opened in September 2007.
* The Norfolk Southern Heartland Corridor — an intermodal rail transportation route between the port and inland ports of Columbus, Ohio, and Chicago.
* Craney Island Marine Terminal is being developed for the port’s future expansion. No other port on the east coast has the land to expand their operations to the extent of being able to add over 800 acres.
In 2006, the Virginia Port Authority commissioned the Mason School of Business at the College of William and Mary to conduct an overall economic impact for the Commonwealth. The economic findings are staggering in that the port supports 343,000 direct and indirect jobs, with an employee compensation level of $13.5 billion; has an overall total revenue figure of $41.1 billion; and provides local income, sales and real property tax of $1.2 billion.
We all can relate to the current worldwide economic downturn that has just about halted everything in its tracks. Generally, the short-term trends for world trade commodities are down as we move into 2009. However, the long-term projections continue to remain the same for port growth and the need for additional distribution and warehousing logistic centers. The Virginia Port Authority projects that an additional 20-60 million square feet of space will be needed by the year 2030. In the past three years, about 4 million square feet of new logistic space was built in the Hampton Roads area alone.
The majority of new logistics space will require larger tracts of land that are properly zoned for industrial purposes with utility infrastructure in place. Part of our economic development mission is to position the city and county to attract new investment which diversifies and increases their overall business tax base. The new tax base can stabilize the upward pressure on the residential and agricultural property tax bills for its citizens for the services they need.
Lastly, as a prime example, the county has committed to the development of the 230-acre Turner Industrial Site which is needed to attract logistic and distribution firms. This allows us to diversify our economy, boost tax revenues and provide good employment opportunities for those citizens who want to stay here but also for those citizens and family members who may have left Franklin and Southampton for other job opportunities to return here.