Head of Virginia terminals says port’s assets help it keep customers

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Joe Dorto, president and CEO of Virginia International Terminals Inc. (VIT), has spent nearly three decades shaping the growth at the ports in Hampton Roads. He spent 10 years in sales and operational positions with Sea-Land Service Inc. before joining the Virginia Port Authority in 1979 as director of trade development. After seven years of positions primarily in port marketing, he began working for VIT, the operating arm of the Virginia Port Authority, in 1986.

Special Projects Editor Jessica Sabbath talked with Dorto about the port’s assets, the weak economy, labor relations and the new executive director of the Port of Virginia. Following is an edited transcript.

Virginia Business: What Port of Virginia assets helped secure the recent signing of the 10-year, $500 million contract with a group of five shipping lines?

Dorto: Well, I think the first thing is that the shipping lines that come here know that we’ve got the deepest water of any port on the East Coast. So they can build ships as big as they want to, and we’ve got the capability of handling them. And when they look to the future, they want to know how much land you have to continue to grow … Of course with the
APM Terminal being built, and with Craney Island coming online in 2017, they know that we will have the capacity necessary to go well into the future.

And with the success we’ve had in attracting distribution centers to Virginia, they see that as an anchor, and that tells them that those people are going to continue to be here, and they’ll continue to grow as well. So I think we’ve got those three things going for us. The vessels are sure they can get in here in draft conditions, the room to expand and
the continued growth of our business, which is not just in distribution centers, but our local cargo and the rail service.

VB: Was there any concern that you might lose business to APM Terminals?

Dorto: Well, of course. APM Terminals is a global competitor. They’ve got terminals all over the world. They’re owned by Maersk line which is the largest steamship line in the world, and they’ve got the capability of things we can’t offer. They can offer sharing on their vessels, use of their terminals worldwide, and I think it was a credit to our company
that we were able to get that [contract] even in the light of the fact that APM was going after it.

VB: Is APM’s decision to locate here still regarded as good for the port as a whole?

Dorto: Given the choice of having APM or not having APM, we would rather have APM. APM is a big player. And they bring with them Maersk line. If the decision had been made to build that terminal someplace else, they would have taken Maersk line out of the port, and the port would have suffered as a result of that. They also offer the bridge opportunity to
give us capacity between our terminals and the building of Craney Island.

What I’d like to see is a joint effort between the VPA, VIT and APM to go after business that is outside of what we have today. It doesn’t do us any good if APM takes our business, and we go back and take it back. What we need to do is focus on business that is not here today, and that includes Maersk business that’s not here today, and try to come up with a plan to attract that business here.

…When I started here in 1979, the terminals were all privately run. We competed against each other and got nowhere. We just continuously took business from each other, and the port wasn’t growing. At the same time Charleston, Savannah and Baltimore were cleaning our clock by going after business that was here. And I think we need to deploy the same strategy that we did back then, which was to go after business that’s outside of the Port of Hampton Roads.

VB: Is there a short-term effect of the weak economy?

Dorto: Absolutely. The month of June was down by 6,000 containers. That’s the first time since 2002 that we haven’t had a month that’s beaten the previous month last year. So I think the economy is definitely down, and we’re usually six months behind a bad economy ... And I think we will certainly start to see that for the rest of this year and probably next
year. [VIT’s] forecast for growth is only about 1.5 percent.

VB: The port hasn’t had the same labor relations problems here as on the West Coast. Why not?

Dorto: I think that the basic difference between this port and any other port is the relationship we have with labor. Before we air our dirty laundry outside publicly, we meet and try to resolve the issues. Whether you’re on the labor side or the management side, it really boils down to just common sense and what’s in the best interest of the total port. I
don’t think in the time I’ve been here, which is almost 30 years, that we’d ever made a commitment that we haven’t kept. And I’ve never seen them say they’ll do something, and then turn around and not do it …We’ve got a strong shipping association; local ship lines and stevedores, and terminal operators in this port have been here for a long time. And the
leadership of Ed Brown in the ILA [International Longshoremen’s Association] has been very steady,  so you’re talking about a relationship with people that’s been built over the last 20 or 25 years and that helps a lot.

VB: The General Assembly is studying privatization of the port. Do you think that would be beneficial?

Dorto: The General Assembly and the state of Virginia have to make a decision at the end of the day on what it is in the best interest of the state. Is it economic spinoff, which is what we create here, or is it money to fix the road problems?  My personal view is you don’t sell your best assets to solve your problems. I think that you have to find a way to keep those assets because long term they’re going to pay dividends. The port is responsible today for 340,000 jobs in the state of Virginia, which is 10 percent of the work force, and part of our job here is to make enough money to be independent. We don’t get any general fund support, but at the same time use the revenue that we generate to attract more business. Private industry is going to look at making a profit … the people who would be most interested in buying us would be these equity guys, and a lot of that equity money is foreign investment …. It’s in my personal views that it’s in the best interest of the state of Virginia to keep the operation the way it is.

VB: Tell us about the leadership style of Virginia Port Authority Executive Director Jerry Bridges. Any major differences compared with his predecessor, Bobby Bray?

Dorto: Both of them have a good handle on how to deal with the politics, and that’s the most important piece of that job. We don’t have controversy, we don’t have our names in the newspapers all the time on issues we don’t want to be involved with. Bridges is more outgoing, and Bray was more of a kind of behind-the-scenes person, but both of them
were effective in dealing with the political side.

…Bridges has experience from the West Coast which is something that adds to our arsenal. We know how they think out there and what’s coming. He led us down the environmental path, and I think we’re probably the leading port on the East Coast to get involved and be more concerned about the environment. Quality control and environmental issues are things that he’s brought in and established his own brand of managing by doing that.

I think the timing was good. Bobby Bray took us through a very difficult time of port unification. He was able to get us the money to build these terminals to make them what they are today, and now we really need a guy to take us into the future and get the same kind of thing done at Craney Island … As far as I know, the same people that were here are still here and still doing their job the way they did before. It’s not like he came in here and made a lot of changes. He’s enhanced what was already a good working operation. 

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