Opinion

Massive ships highlight new era at the Port of Virginia

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Print this page John G. Milliken, chairman of board of commissioners, Port of Virginia
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A new era of international trade is underway on the U.S. East Coast, and the Port of Virginia is well-positioned to cement its position as the mid-Atlantic’s true global gateway.

In early May, the port welcomed the COSCO Development, the largest containership to ever come to the East Coast. A few weeks later an even larger vessel, the OOCL France, eclipsed the COSCO Development’s record. And so the big ship era at the Port of Virginia is underway.

These two ships are the first of a new generation of ultra-large container vessels to come to the East Coast. These mammoth ships are fitting symbols of the important role that international commerce and trade play in the Virginia and the national economy.

These containers carry the tangible products of our economy. Our nation’s ports are the heart of a complex transportation system, as cargo flows in and out of our ports by ship, rail, truck and barge to points across the country and around the world. According to the American Association of Port Authorities, seaport cargo activity supports the employment of more than 23 million people in the United States. Seaport-related jobs provide for $1.2 billion in personal income and local consumption. For every $1 billion exports shipped through U.S. seaports, 15,000 jobs are created.

The OOCL France can carry 13,200 TEUs (twenty-foot equivalent unit, industry-speak as a way of measuring the number of containers). A typical container seen on a railcar or the highway is 40 feet long, or two TEUs. The widening of the Panama Canal and consolidation in the worldwide shipping industry have led to ships of increasing size. Seven years ago, the average ship calling on The Port of Virginia, or on any of East Coast port, was approximately 4,000 TEUs,

The COSCO Development and the OOCL France are the first of many similar size ships making weekly stops in Virginia. This frequency of service and the cost savings that come with larger ships make it more advantageous for businesses with products to market to choose Virginia as a place to locate that business, thereby bringing new jobs to the commonwealth.

A 2014 study done by The College of William and Mary estimated that one out of every nine jobs in Virginia is related to activity at Virginia’s ports, equating to $17.5 billion in wages. Nearly half (47 percent) of the port’s business in 2016 was the export of Virginia-made-or-grown products, equating to jobs for Virginians and goods for the world. The study further showed that annual exports of 4.5 million tons of Virginia-made products had an estimated value of $10.9 billion.

A couple of examples make the point. STIHL Inc., a producer of handheld outdoor power equipment has its largest manufacturing operation in Virginia Beach to take advantage of the port. That facility manufactures for the U.S. market but a larger share of its revenues come from exports through Virginia’s port to worldwide markets. Newell-Rubbermaid, has a manufacturing/distribution facility located near the Virginia Inland Port in Front Royal. It uses the direct rail connection to the port’s waterside terminals to import raw material and parts to manufacture and assemble products that are both exported and sold domestically.

In addition, agricultural products from every part of the commonwealth move through the port to worldwide markets – making Virginia the second-largest ag-exporter on the East Coast.

Virginians benefit from the port because of the ease with which they have access to imported items made around the world and sold in local stores. Some of our clothes, our furniture and our children’s toys are made elsewhere, at least in part, and shipped in volume by sea through the Port of Virginia to a distribution center, often also located in Virginia, and then to a nearby store. This sophisticated, high-volume logistics chain helps keep costs down and provides a variety of affordable products that would not otherwise be available.

The Port of Virginia is an independent public body whose governing board is appointed by the governor. Though a state agency, it seeks to operate like a business, not to make a profit, but to focus its energies and invest its resources in economic development and the creation of jobs.

With larger and larger ships dominating international trade, the ports board has approved a plan of growth to increase its annual TEU capacity from its current 2.5 million to roughly 4 million by 2020 through investing more than $670 million to expand its two largest terminals. This expansion assures shippers that their products, whether destined for worldwide markets or down the street, can be handled efficiently and at a reasonable cost over the long term.

Too often trade is seen as a one-way deal with boxes coming from faraway lands. The reality is far different. For a Virginia manufacturer or farmer, the port is the gateway to growing international markets. And this new era brings additional opportunity to share American-made goods around the world, creating jobs, generating revenue and encouraging further investment on our soil.




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