2015 Hampton Roads Maritime & International Trade Guide

2015 HAMPTON ROADS

& International Trade Guide

INSIDE:Growing capacity at the portBreak and break-bulk cargoConstruction of the Elizabeth River Tunnels Building the next generation of port workers

Looking Looking aheadahead

ANNIVERSARY

Port plans for the future

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2 A publication of Virginia Business magazine

A PUBLICATION OF VIRGINIA BUSINESS MAGAZINE

www.VirginiaBusiness.com

Investing in the port’s futureThe Port of Virginia continues to handle record levels of cargo

and is now doing so from a stronger financial position. Virginia Port Authority Executive Director John Reinhart has made great strides in improving the port’s bottom line during his first year leading the port. This should give the port better resources to invest in itself.

Global trade predictions show the number of containers mov-ing through the port’s marine terminals is likely to continue to surge over the next few decades. Ocean carriers are attracted to Virginia’s deep channels and strategic rail connections to the Midwest.

However, these volumes are taxing the port’s terminals, with congestion causing major delays for motor carriers servicing the port. With its finances in order and port on the brink of major growth, now is the time for Virginia’s maritime community to come together and invest in expanding its capacity.

We invite you to use the 2015 Hampton Roads Maritime and International Trade Guide to learn more about Virginia’s maritime industries. It is a valuable reference source on major companies providing services to the port community. This guide includes information from the Virginia Port Authority, the Virginia Maritime Association and the Hampton Roads Economic Development Alli-ance. We thank them for their assistance.

— Bernie Niemeier

4 Port plans for the future

by Jessica Sabbath

11 News roundup by Jessica Sabbath

14 Break and break-

bulk cargoes offer opportunities

by Joan Tupponce

17 Elizabeth River Tunnels project to alleviate congestion

by Beth Cooper

20 Creating a mega region by Richard Foster

24 Building the next generation of

workers by Veronica Garabelli

27 2015 forecast for ocean shipping

Commentary by Mike Coleman, CV International Group

31 Exporting resources by Jessica Sabbath

32 New CEO to take over at Norfolk Southern

by Jessica Sabbath 32 Norfolk airport

continues to renovate and refurbish

by Jessica Sabbath

33 Relieving congestion for motor carriers

by Jessica Sabbath

34 FTZs can help reduce exporting costs

by Jessica Sabbath

References 28 Port stats 30 2014 Trade overview 32 Air cargo/passengers 34 Foreign Trade Zone #20 35 Maritime lawyers 36 International firms

A note from the publisherA note from the publisher

C O N T E N T S

VIRGINIA BUSINESS PUBLICATIONS LLC

A portfolio company of Virginia Capital Partners LLC

Frederick L. Russell Jr., chairman

President & Publisher Bernard A. Niemeier

Editor Robert C. Powell III

Managing Editor Paula C. Squires

Special Projects Editor Jessica Sabbath

Special Projects Asst. Editor Veronica Garabelli

Contributing Writers Mike Coleman

Beth Cooper

Richard Foster

Joan Tupponce

Art Director Adrienne R. Watson

Contributing Photographer Mark Rhodes

Production Manager Kevin L. Dick

Circulation Manager Karen Chenault

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News and features

2015 HAMPTON ROADS

& International Trade Guide

ANNIVERSARY

Cover photo courtesy Port of Virginia

WHAT’S NeW Norfolk is an ever-evolving city,

striving to become the most dynamic and authentic urban waterfront

community in America.

Find out more here:

» norfolkdevelopment.com

Photo creditPhoto courtesy Port of Virginia

COVER STORY:


With finances in order, port plans for the future

by Jessica Sabbath

Looking aheadLooking ahead

With cargo containers stacked five high, the Port of Virginia’s facilities are being maxed out with the influx of record cargo volumes moving through its marine terminals.

“Today at 1.4 million contain-ers [per year], we’re using 90 per-cent of our capacity, so we’re ab ove optimum,” John Reinhart, CEO and executive director of the Virginia Port Authority, told a group of mari-time community executives gathered in Norfolk for his annual State of the Port address in March. “If you take a very conservative flow of the cargo, we will be over 2 million containers in 2024. That’s on a conservative growth plan, so we need to match that with [investment in our] facilities.”

And the Port of Virginia appears poised to continue that growth well

into the future. Virginia’s naturally deep harbor already is attracting Post-Panamax vessels that can come in and out of the port fully loaded. The port’s terminals could see even more of these ships after the expan-sion of the Panama Canal is com-pleted in early 2016.

Service from two Class 1 rail-roads also is making Virginia an ideal place to unload cargo headed to the Midwest.

“The port’s going to have to expand,” says John Milliken, chair-man of the Virginia Port Authority Board of Commissioners. “In round numbers, we think by the 2040s we’re going to need to have the capacity to handle 7 million TEUs [20-foot equivalent units]. That’s almost triple what we’re doing now.”

Port officials say that to handle the influx of cargo, the port commu-nity will need to work together with

the state and federal governments to make the necessary investments to accommodate current and future growth. “We are operating at, near or above our capacity,” Reinhart said during his State of the Port address. “If we want to grow the port there are certain things we need to do as a community, as a port authority, as a commonwealth.”

Turning a profitA better balance sheet should

allow the port to further reinvest in itself.

Reinhart took over leadership of the port in February 2014 at a time when port officials were touting record cargo volumes but losing mil-lions at the same time. When Rein-hart arrived, the port had posted six years of operating losses totaling $102.4 million.

The port’s bottom line quickly improved after Reinhart came on

2015 Hampton Roads MARITIME & INTERNATIONAL TRADE Guide 5

Looking ahead

board. For the first eight months of fiscal year 2015 (or July 2014 through February 2015), total profit was $4.6 million, compared with a $16.6 million loss during the same period a year earlier.

Milliken says the positive swing in financing is critical to the port’s financial future. “I think the first pri-ority was to establish in the eyes of the larger worldwide maritime com-munity that we are a financially stable port that they could rely on for the long term to do business with,” says Milliken. “Now we’ve got to grow the port, and we’re able to do that because our finances are better.”

Milliken was one of five new com-missioners appointed in 2014. Soon after Gov. Terry McAuliffe was inau-gurated in 2014, he replaced almost half of the port board, citing the port’s poor financial performance.

“We’re pleased with the direction the port’s going,” says Virginia Transportation Secre-tary Aubrey Layne. “John and his team arrested the significant losses. We understand there are going to be ups and downs, but we think they are headed in the right direction.”

Congestion at the terminalsIn many ways, the Virginia Port

Authority, which runs the state’s marine terminals, has become a vic-tim of its own success. Virginia’s ter-minals have seen more and more containers coming in and out of the port, including those aboard mas-sive Post-Panamax vessels that bring a lot of volume all at once.

In 2014, the port’s marine termi-

nals were handling an average of 1,228 rail moves each day and 2,378 truck moves per day. The port handled 2.4 million TEUs (with most containers measuring two TEUs) in calendar year 2014, an increase of 7.6 percent over 2013.

When port officials tally the num-ber of paid loads serviced at its termi-nals, the Port of Virginia grew faster than all other East Coast ports since the end of the Great Recession. The Port of Virginia’s volume of paid cargo grew 34 percent between fis-cals years 2009 and 2014. During the same time period, Savannah’s traffic volume grew 27 percent, Charleston,

6 A publication of Virginia Business magazine Photos courtesy Port of Virginia

cover story

S.C.’s grew 24 percent and the Port of New York/New Jersey volume grew 15 percent.

All this growth has created back-ups at the port’s marine facilities, leav-ing truckers waiting hours to drop off or pick up their loads. Ed O’Callaghan owns Audax Transportation, an agent of Century Express with 35 motor car-riers who service marine terminals at the Port of Virginia. In 2013, his trucks could move an average of 3.9 con-tainers per day at the port’s terminals. That dropped to two containers last year and 1.4 in the first seven weeks of 2015. “What frustrates the trucking companies and the dispatchers the most is the congestion is unpredict-able on what day or what terminal will have the backup,” he says.

Earlier this year, congestion prob-lems were compounded when the Port of Virginia received cargo that had been diverted from the West Coast during labor disputes, and a series of winter storms shut the port down for four days in February.

But port officials cite a lack of planning for the long-term conges-tion issues. Many contend the previ-ous administration was too distracted to invest properly in the port when the state received unsolicited bids in

2012 to privatize the port’s operations. That was the second round of private bids port leadership had to consider in three years.

“[The former state leaders] were being pushed by the ill-conceived thought that we would be better off as a private port than a state-run port,” says Frank Borum, president of the Tidewater Motor Truck Association. “The state procrastinated in trying to make a decision whether to change operating arms of the port or to main-tain the current situation, and I think it hampered the current situation quite a bit.”

O’Callaghan is among a group of motor carriers meeting with the VPA’s board of commissioners to consider ways to relieve the terminal conges-tion. “Our voices are starting to be heard, but it’s imperative that they get on track right away,” says O’Callaghan. “Congestion is not only causing frus-tration, it’s causing revenue loss.”

Short-term solutionsPort officials are undertaking

a variety of measures to mitigate congestion.

Those measures range from equipment purchases to plans to remove empty containers left

at the port that get in the way of operations.

Equipment purchases include new yard hustlers in its rail opera-tions, top loaders and 400 truck chassis that are being added to the terminals.

The port has implemented a program to encourage ocean car-riers to remove empty containers on the port’s terminals. In addition, the port has expanded its operat-ing hours to handle the increased volume and is paying not only the overtime for the port employees but also for the U.S. Customs and Bor-der Protection employees required to work extra hours.

In the fall of 2014, the Port of Vir-ginia spent $7 million to reopen its Portsmouth Marine Terminal (PMT) to container traffic. PMT had been closed to container traffic since 2011, after the VPA began its lease of what was then APM Terminals in Portsmouth (now known as VIG). The port continues to move equip-ment over to PMT to handle ships calling there.

The port also is planning to start an appointment system for trucks at the Norfolk International Termi-nals (NIT) this June. The rollout will

Top loader?

The Port of Virginia is starting an appointment system for motor carriers at Norfolk International

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be slow, says Joe Harris, spokesman for the Port of Virginia. “The idea is to create consistency in the flow of traffic through the terminal, so every hour you know you’re going to have ‘X’ number of trucks at the gate.”

In the next two years, a couple of projects should improve efficien-cies at the port.

By June, the port hopes to com-plete the leveling and paving of five acres at Virginia International Gate-way that will be designated for rail containers. “It reduces the stack density [of containers], and it ensures there aren’t two rail boxes on top of yours,” says Harris. “It will add to the efficiency of the terminals.”

Another major project is the cre-ation of a new intermodal gate at Norfolk International Terminals. This project will replace the existing truck gates with a 22-lane, semi-auto-mated North Gate Complex. This should speed the entry of trucks into the terminals.

The VPA received a $15 million TIGER (Transportation Investment Generating Economic Recovery) grant from the U.S. Department of Transportation to cover about half the cost of the project. The VPA is paying for the rest. The port hopes to break ground this summer on the project, which is expected to take about 16 months to complete.

The North Gate Complex will tie into the Interstate 564 connec-tor, which will provide a high-speed highway connection from I-564 to Norfolk International Terminals and the Norfolk Naval Station. This will keep trucks off of Hampton Boule-vard and improve access to the ter-minals. Construction on the $169 million project is expected to begin this fall.

The port and maritime commu-nity continue to try to work together to come up with other solutions. In the fall, port officials and represen-tatives of the Virginia Maritime Asso-ciation, which represents more than 400 companies involved in Virgin-ia’s maritime industry, met in a “Port Productivity Summit” to brainstorm together.

Major capital requirementsUltimately, major

investment is needed to grow the port and its capacity. “On a con-servative basis, in the next 10 years, capi-tal requirements will approach $1.54 billion [not including] the cost of expansion of VIG,” Reinhart said at his annual address. “$2 billion is what will be needed to support the growth that’s coming into the Port of Virginia.”

That number includes the mod-ernization of the NIT and the deep-ening of the Norfolk channel to 55 feet and the Southern Branch of the Elizabeth River to 45 feet. “This is where we start leaving our compe-tition behind,” says Art Moye, exec-utive vice president of the Virginia Maritime Association.“We have a green light [from the U.S. Army Corps of Engineers.] It would take two decades for any competition to catch up.” (For more information on

that project, see page 13).But the port’s two major expan-

sion opportunities are in Ports-mouth. The port is five years into a 20-year lease of VIG, which can cur-rently handle 1 million TEUs annu-ally. The terminal has expansion room to be doubled.

Last year, APM Terminals sold its state-of-the-art terminal to a partnership including infrastructure investment firm Alinda Capital Part-ners and Universities Superannua-tion Scheme Ltd., a pension fund based in the United Kingdom.

The port commis-sioners have begun dis cussions with VIG’s new owners about the ex pansion, which is expected to cost [an estimated $350 million].“We’ve had several rounds of discussions with the new owners about VIG 2,” says Milliken. “We need their ‘ok’ to do that, and we’d be interested in some addi-

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tional investment from them and to see whether we can extend the lease.”

The VPA has leased VIG for five years now. To make a major invest-ment, the port would want to extend the 20-year lease to ensure invest-ment in the facility makes sense. “These conversations are progressing

well,” says Milliken. “That’s the impor-tant longer term next step.”

The VPA also is looking at extend-ing its current five-year lease of the Port of Richmond and providing some additional investment in that facil-ity. “It’s a very attractive alternative to trucking up [I-64], and a lot of our customers see that as having some

potential,” says Milliken. Currently a barge service travels

between Hampton Roads and Rich-mond three times a week, handling about 4 percent of the port’s cargo.

Further out on the horizon is the construction of Craney Island, which already has federal approval. The future terminal would double the entire port’s container capacity when fully built out. Construction of the land mass has begun, with about eight years to go before completion. Construction of the terminal would take about two to three years.

“It’s time to invest and continue the reinvention that we started last February,” Reinhart said when he con-cluded his address to the maritime community in March. “We’re stewards of the tomorrow. We’re doing the best we can. We fail you some days, but I guarantee you we are moving in the right direction, and we’ll get there. With your help and your support we will become the preferred port on the East Coast of the United States.”

64 Express brings container traffi c between Norfolk and the Port of Richmond three times a week.

2015 Hampton Roads MARITIME & INTERNATIONAL TRADE Guide 11Top: Photo courtesy Port of VirginiaBottom: Photo courtesy Huntington Ingalls Industries

ROUNDUP: News from and around the port

Port has $60 billion impact, study saysThe Port of Virginia contributed $60.3

billion to Virginia’s economy in fiscal year 2013, according to a study by

the College of William & Mary’s Mason School of Business.

The study, p reviously done for fiscal year 2006, shows the port’s impact growing along with its increased cargo volume.

The 36-page study considered the port’s direct and indirect impact during its 2013 fiscal year, which ran from July 1, 2012 to June 30, 2013.

From 2006 to 2013, the study found:• The port’s economic impact in the

commonwealth grew 47 percent to $60.3 billion in 2013, compared with $41.1 billion in fiscal year 2006;

• Port-related employment grew 9 percent to 374,646 jobs, up from 343,001 jobs in 2006. The number of jobs accounted for 9.4 percent of Virginia’s resident workforce;

• Tax collections from port activity grew 17 percent to $1.4 billion from $1.2 billion in 2006 (including corpo-rate and individual taxes, general sales taxes and local property taxes);

• Employee compensation grew 30 percent to $17.5 bil-lion from $13.5 billion.

“The findings of this work emphasize the importance

of The Port of Virginia and further underscore why a healthy port is critical to so many sectors of the economy as we go forward,” John F. Reinhart, the Virginia Port Authority’s CEO and executive director, said in a statement.

The study found that the port’s contribution to gross state product (GSP) was $30.5 billion, equal to about 6.8 percent of the estimated $448.8 billion total GSP in fiscal year 2013.

The study considered how the port affects Virginia’s economy in three ways: the transportation of

export and import cargo; the export of goods made in Vir-ginia; and the processing and distribution of imports retained in the commonwealth.

The study took into account only the activity of Virginia’s state-owned facilities.

The Virginia Maritime Association is in the early stages of commissioning a study that would take into account the eco-nomic impact of Virginia’s entire port industry. For example, there are about 1,000 ship calls each year made to terminals in Hampton Roads that are not run through state-owned facili-ties. The study could help lawmakers better understand the entire impact of the region’s maritime community.

BAE Systems Ship Repair plans to acquire Norfolk-based Marine Hydraulics International Inc.

Shipbuilding and repair still going strong

Despite the looming threat of sequestration, the Hampton Roads’ shipbuilding and ship

repair industries have fared well under the current federal budget.

“Our workload has been very steady and very full,” says Bill Crow, president of the Virginia Ship Repair Association. “This is a robust ship repair year.”

Congress and the president reached agreement on a spending plan for fiscal year 2015 in late Decem-ber. The budget lasts through Oct. 1.

The current spending plan main-tains a fleet of 11 aircraft carriers, which is good news for the region. Newport News-based Huntington Ingalls Indus-tries Inc. is the country’s only builder of nuclear-powered aircraft carriers.

At press time, Huntington Ingalls was expected in early April to receive a contract to build the second aircraft carrier in the Virginia-class fleet, the USS John F. Kennedy. The shipbuilder is scheduled to deliver the first in that class, the USS Gerald R. Ford, in 2016.

The federal budget included prep-arations for the mid-life overhaul of the USS George Washington and the pur-chase of two Virginia-class submarines in 2015.

So far, federal budgets also have kept intact operations and mainte-nance for Navy ships, the key driver for the region’s ship repair industry. “All of Navy maintenance has been funded to slightly over 100 percent,” says Crow,

who says the Navy even added work to take care of a backlog of maintenance issues.

The Virginia Ship Repair Associa-tion is working with its federal partners to avoid potential cuts under seques-tration in 2016. Under sequestration, federal defense cuts will total $50 bil-lion in 2016 unless Congress and the White House can agree on ways to keep the federal budget capped.

If the Defense Department faced those required cuts, the Navy could face a tight budget.

“We are the strength behind the fleet,” Crow says of ship repairers in the region. “And yes, the concern is that our ship repairers need to put food on the table, but most important is the readiness of the U.S. Navy and their ships.

“These people have an enor-mous amount of pride in what they do. They keep these ships maintained and at maximum readiness, and they are modernized throughout their life span.”

Huntington Ingalls Industries is the sole builder of nuclear-powered aircraft carriers.

Stories by Jessica Sabbath

The economic impact of the Port of Virginia grew 47 percent between 2006 and 2013.

12 A publication of Virginia Business magazine File photo

roundup

Offshore wind research project to provide valuable lessons

Dominion Virginia Power is work-ing on parallel projects to make offshore wind power a reality off

of Virginia’s coast.The Richmond-based power

company is leading a team that will design, install and operate two 6-megawatt wind turbines that will be located 24 nautical miles off the coast of Virginia Beach.

The Virginia Offshore Wind Technology Advancement Project (VOWTAP) should provide valuable lessons and experience for Domin-ion’s potential wind energy commer-cial development adjacent to the research area.

In fall 2013, Dominion was awarded the lease of about 113,000 acres off the coast of Virginia for com-mercial wind energy development.

“We will gain experience on a smaller scale with the research proj-ect and then apply those lessons to a larger-scale project to derive efficien-cies and economies that we can pass on to our customers,” says Robert Hare, Dominion’s wind energy devel-opment manager.

Those lessons include everything from the permitting and approval process to the installation and opera-tion of the turbines. The research also should help the company determine if offshore wind can be produced

economically. “If we can find a way to do it

more efficiently with two [turbines] then when we have 100, we can pass those efficiencies on,” Hare says.

VOWTAP reached a major mile-stone in March when Virginia was awarded a federal wind energy lease for the area where the two turbines will be installed. Virginia became the first state in the nation to receive such a lease from the United States Bureau of Ocean Energy Manage-ment (BOEM).

Virginia’s Department of Mines, Minerals and Energy (DMME) has designated Dominion as the lease operator on the project. The energy company is leading the project with a team that includes DMME, wind turbine manufacturer Alstom Power, engineering firm KBR, Keystone Engi-neering, the National Renewable Energy Laboratory, the Virginia Tech Advanced Research Institute, New-port News Shipbuilding and environ-mental consultant Tetra Tech.

The team’s current focus is obtain-ing the permits and approvals required for the project. “With a large compli-cated project there are many develop-ment processes that [are required,]” says Hare.

The team also is conducting a vari-ety of engineering projects that will

help it prepare for its regulatory filing with the State Corporation Commis-sion later this year. In that filing Domin-ion will include the estimated cost of the project.

The company was one of three last year to receive a competitive award of up to $47 million from the Department of Energy to go toward design and construction of the turbines. Dominion already had received $4 million in fed-eral funds to undertake initial engineer-ing, design and permitting processes.

The project is expected to be built in 2017. Construction would include the installation of two foundations, placement of the turbines, installation of the interconnection cables between the turbines and the installation of the distribution cable, which will run under-neath the dunes to the shore in Camp Pendleton. In addition to the permit-ting and regulatory approval process, Dominion currently is selecting an engi-neering and construction contractor that would finish the design and instal-lation of the turbines. The awardee will be announced before Dominion’s SCC filing.

After the project, Dominion will provide select data to external stake-holders as well as apply the results to its offshore wind development.

If all goes smoothly, it could be about a decade before construction of the first phase of commercial offshore wind development. “To complete the appropriate permitting and regulatory approval processes, we have identified in our Integrated Resource Plan that the first block of commercial offshore wind turbines could be operational by 2025,” says Hare.

Maritime executives in Hampton Roads believe the development of off-shore wind power could be a major economic boon to the region. Eco-nomic development officials say Hamp-ton Roads could be a key player in the supply chain of offshore wind develop-ment, from the manufacturing of wind turbines to the building and maintain-ing the massive ships required to trans-port the turbines.

Dominion Virginia Power is leading a team that will design, install and test two 6-megawatt wind turbines.

2015 Hampton Roads MARITIME & INTERNATIONAL TRADE Guide 13Graphic by Lori Absher, courtesy Virginia Maritime Association

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55’ in 5: VMA pushes efforts to deepen channel

Ports up and down the East Coast are racing to match the Port of Hampton Roads’ depth advan-

tage. Meanwhile, the Virginia maritime community is pushing to go even deeper.

The Virginia Maritime Association(VMA) has launched a campaign to dredge the Norfolk channel from 50 feet to 55 feet and the Southern Branch of the Elizabeth River from 40 feet to 45 feet.

The “55’ in 5” campaign aims to have the dredging project begin by 2020.

Deepening the waterways would provide ma jor benefits to the port. Today’s largest ships require a 50-foot depth when fully loaded, and ships are likely only to get bigger. Today, Virginia is the only port on the East Coast capa-ble of handling these massive ships when fully laden. (The Port of Baltimore has a 50-foot depth at one berth.)

“Increasingly, ships are requiring every bit of that 50 feet,” says David White, vice president of the Virginia Maritime Association. “[These large ships] have to come in with the tide. As we see a greater percentage requiring it, scheduling becomes an issue.”

In addition, most ships export-ing coal require 50-foot depths. “It’s important to have access to the global market,” says White.

The U.S. Army Corps of Engineers first approved the project in 1986, and the state and Corps are splitting the cost of a $6 million re-evaluation study needed. That study, currently being conducted, will take three years to complete.

The next step is to obtain a $2 million commitment (divided evenly between the state and federal govern-ment) for the project design and engi-neering. The VMA’s goal is to begin phased construction by 2020. The cost of the project is expected to be $244 million.

“The additional capacity gives us growth opportunities,” says Art Moye, executive vice president of the VMA. “This is where we start leaving ourcompetition behind.”

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14 A publication of Virginia Business magazine File photo

Outside the boxBreak-bulk and bulk cargo are key to the region’s economy by Joan Tupponce

Containerized cargo is a familiar site on the roads of Hampton Roads, with trucks bringing

shipping containers to and from the marine terminals of the state-owned Port of Virginia.

Less visible are products coming in and out of the region outside of containers, such as grain and wood pellets. These break and break-bulk cargos are an important but less well-known part of the economy of the Port of Hampton Roads, which encom-passes both the Port of Virginia and privately owned marine terminals.

“So much of it is unseen and may be even unknown by most of the pub-lic,” says Virginia Maritime Association executive vice president, Art Moye, of the cargo going in and out of Hamp-ton Roads.

Last year, the Port of Virginia recorded a record year with an increase in containerized cargo of 7.6 percent over 2013. But containerized cargo is just one type of cargo shipped in and out of Virginia waterways. “There are just under 3,000 commercial ships that come in and out of the port every year,” says David Host, chairman and CEO of Norfolk-based ship agents T. Parker Host Inc.

The containerized cargo moving through the Port of Virginia accounts for almost 2,000 of those each year, meaning about one-third of ships coming to and from the region are transporting non-containerized cargo.

Both bulk and break-bulk cargo historically have been important to the Port of Hampton Roads. Bulk cargo includes items such as coal and agricultural products. Break-bulk cargo ranges from rolls of paper to machinery. “They enhance the perfor-mance of the port, and they provide revenues, jobs and taxes,” Moye says of the two types of cargo. “Break-bulk commodities are very competitive.”

While The Port of Virginia does

handle break-bulk cargo at its New-port News Marine Terminal, that type of cargo isn’t currently as large a focus for the state-owned port. It is, how-ever, a potential growth area. “We know there is business to be had in that area,” says Joe Harris, spokesman for the Port of Virginia. “Break bulk is a dynamic cargo niche where they are looking for the fastest and most eco-nomical option.”

Presently, private terminals in the Port of Hampton Roads handle most of the bulk and break-bulk cargo that is exported and imported. There are more than 50 private terminals that “bring in cargos either for their own uses or for distribution to other manufacturers,” Host says. “We are the largest port on the East Coast if you are measuring in terms of total tons of all commodities including containers.”

The cargo traffic in the state benefits from two class 1 railroads — Norfolk Southern and CSX — that transport goods to the port as well as deep 50-foot channels, the deepest shipping channels on the East Coast.

The lack of “deep water ware-house availability creates many new

opportunities for growth in develop-ing new terminals on former industrial sites along the Southern branch of the Elizabeth River where most of the bulk and break-bulk cargos come in,” says Douglas Higginbotham, presi-dent of the maritime consulting firm Tidewater Global LLC in Chesapeake. “We want to continue to develop all the available areas along the South-ern branch to be able to handle an increased request for products that are imported and exported.”

T. Parker Host oversees much of the coal and other commodities shipped by bulk in and out of Virginia waterways. “Coal has been a staple here since 1880 both on the New-port News side and in Norfolk,” he says. “Coal movement is cyclical. It depends on world conditions.”

Historically most of the metal-lurgical coal, used in making steel, is exported to Europe and Brazil. How-ever there are potential for exports of coal to India. “Coal has always been a significant commodity in Hampton Roads, and I hope it always will be,” Host says.

One of the newest commodities to be exported are wood pellets. “They go to Europe, and they are used in utilities for burning,” Host says.

Bulk imports also add to the state’s economy. Imports include fertilizers and other minerals such as pumice stone from Greece. “That’s used in the construction industry,” Host says. “In another year you might see the import of cement coming into the port. The U.S. produces about 80 million tons of cement but when demand exceeds that it has to be imported. Also with the closure of coal-powered plants, we will not have fly ash that we need for road building and that will have to be imported.”

Agricultural exports, including forestry products, reached a new all-time high of more than $3.35 billion in

BREAKBULK

Break and break-bulk cargo, such as wood pellets, are an important part of the economy in Hampton Roads.


2014, making Virginia the second larg-est agricultural exporter on the East Coast. This is the fourth consecutive year that Virginia has set a new record level for agricultural exports.

“It’s been a great public-private partnership,” says the state’s Secretary of Agriculture and Forestry, Todd Hay-more. “We have an outstanding port system and a powerful infrastructure to move products.”

The state’s three top export markets in 2014 were China, Canada and Switzerland. The most dramatic increase was China, which went from approximately $140 million to $160 million in 2009-2010 to $691 million last year. “There has been a lot of effort and energy in growing the China market,” says Haymore.

The state has additionally seen increases in exports to Mexico and the United Kingdom. Virginia has dedicated trade representatives in all of the top export markets as well as in India and Russia. It also has a satellite office in Costa Rica. “We’ve gone from

one to 10 trade offices,” Haymore says. “The state has spent roughly $3 million on that. We know there have been [about] $750 million in new export deals facilitated by dialogue started from our initiatives, trade mis-sions and trade representatives. It’s something we are very proud of and want to build on.”

The goal is to grow exports even further. Regions being targeted include Southeast Asia (Vietnam, Malaysia, Singapore and the Philip-pines) and the Mediterranean and Northern Africa (Turkey, Morocco, Egypt, Tunisia, Saudi Arabia, Kuwait and Qatar).

Last year the state exported more than $300 million to Southeast Asia and more than $340 million in agri-cultural and forestry products to the Mediterranean and Northern Africa. “That is a large, lucrative area,” Hay-more says. “But it is a little more vola-tile and politically sensitive.”

The top agricultural and forestry product exports include everything

from soybeans, pork and unmanufac-tured leaf tobacco to corn, poultry and processed foods and beverages including wine.

“Exports are incredibly important for the local economy,” says Hay-more. The United States Depart-ment of Agriculture’s 2014 Effects of Trade on the U.S. Economy study says that every $1 of U.S. exports stimulates a $1.22 return to in-state support activities such as processing and shipping.

Looking at the future, the worldwide need for products and commodities will continue to grow. “Depending on what study you look at more than 80 percent of the world’s population lives outside of the U.S. Some studies show it as high as 90 percent,” Haymore says. “That’s a huge number of people we can service with our products.”

And the increase in agricul-tural exports should only mean more opportunities for the Port ofHampton Roads.

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2015 Hampton Roads MARITIME & INTERNATIONAL TRADE Guide 17Photos by Trevor Wrayton and D. Allen Covey, courtesy Virginia Department of Transportation

An engineering marvelElizabeth River Tunnels project to alleviate congested tunnels

by Beth Cooper

Enhanced productivity, acces-sibility and connectivity are on tap for Hampton Roads

com muters and businesses as the Elizabeth River Tunnels Project takes shape along the Norfolk and Portsmouth waterfronts.

The massive undertaking in -cludes construction of a new two-lane Midtown Tunnel, the rehab of the existing Midtown Tunnel and

the two tubes of the Downtown Tunnel and extension of the U.S. 58 Martin Luther King Jr. Freeway to Interstate 264.

Scheduled to open in Decem-ber 2016, the new Midtown Tunnel is the centerpiece of the $2.1 billion project. The state formed a public-private partnership — one of the largest in the U.S. — with Elizabeth River Crossings (ERC) to complete

the project. The Virginia Department of

Transportation owns and oversees the project, while ERC will oper-ate and maintain the infrastructure until 2070. ERC is a joint venture between Skanska Infrastructure Development of Washington, DC and Macquarie Group and Real Assets of Sydney, Australia, which was formed to design, build, main-

TUNNEL

Construction of the new tube of the Midtown Tunnel requires putting together 11, 16,000-ton concrete elements. (Inset: concrete element being towed from Sparrows Point Dock)


tunnel

tain and operate the 51 highway miles of infrastructure included in the tunnels project.

Carrying approximately 30,000 vehicles per day, including about 3,000 per hour during rush hour commutes, the nearly 53-year-old Midtown Tunnel has the dubious distinction of being the heavi-est traveled two-lane road east of the Mississippi. Add traffic going through the Downtown Tunnel, and more than 120,000 drivers use the tubes each day to cross the Eliza-beth River, resulting in congestion, increased fuel usage and lost time on the job.

According to the ERC, traffic congestion at the tunnels wastes more than 17 million gallons of fuel annually and three lost workdays per

driver per year. With the improved roadways, Hampton Roads could see a $170 million to $254 million annual increase in gross regional productivity. In addition, connectiv-ity between the cities would lead to greater military readiness, addi-tional access to trucks traveling to and from the Port of Virginia and reduced commute times. Motorists are expected to see reduced com-mutes by 30 minutes and save $66.3 million in annual fuel costs.

From a safety standpoint, the new tunnel will eliminate the har-rowing bi-directional traffic that motorists have put up with for years, with traffic in the new tunnel going east into Norfolk, while traffic traveling west into Portsmouth will use the existing Midtown Tunnel.

That will also increase capacity for emergency response vehicles as well as evacuation readiness.

Designed to stand the weight of a Nimitz-class aircraft carrier, the new tunnel is only the second in the U.S. to be built entirely of concrete as opposed to a traditional steel-shell. “The technology today is far superior to what was used in the existing tubes,” says Greg Woods-mall, ERC’s chief executive officer. With the concrete, the structure is easier to seal and less likely to develop leaks. At mid river, the bot-tom of the element reaches 95 feet below surface, while the road deck is 90 feet below, and the top of the tube is 65 feet below surface. Posi-tioning the tunnel below the river’s surface protects it and prevents it from interfering with ship traffic.

The tunnel is actually 11, 16,000-ton, rectangular, sealed ele-ments, each the size of a football field. Since no dry dock in Hampton Roads large enough to meet the construction schedule was avail-able, the elements were built at Sparrows Point, Md., and individu-ally floated down the Chesapeake Bay to the Elizabeth River. About 1.2 million cubic yards of material in the river was dredged to provide a trench for the elements.

In a process that takes about 12 hours, a special barge submerges each element which is then con-nected to the adjacent tube by a hydraulic arm, forming a watertight seal. “Most of the technology (for the tunnel construction) was devel-oped in Europe,” notes Dallas Marlow, the project’s construction director. “Several European tunnel experts came over here to consult on the construction. It’s taken a tremendous amount of engineer-ing technology and know-how. We couldn’t risk being wrong.” Six of the 29-foot tall elements have been connected, with the final five slated to be submersed by September. By October, construction workers should be able to walk from one end of the new mile-long tunnel to the other.

Most of the technology used in construction of the tunnel was designed in Europe, according to the project’s construction director, Dallas Marlow (left). ERC CEO Greg Woodsmall says the tunnel’s concrete structure is superior to the existing tubes.

Photo by Mark Rhodes

2015 Hampton Roads MARITIME & INTERNATIONAL TRADE Guide 19Top: Photo courtesy Elizabeth River CrossingsBottom: Photo by Mark Rhodes

State-of-the-art features reflect input from local first responders and include a separate escape corridor, jet fans, a deluge system, fire sensors, fire alarms, extinguishers and hose connections, motorist aid phones, fireproofing and video monitoring. The new tunnel also boasts a 10-foot high drainage system designed to prevent flooding and protect one of the region’s major hurricane evacu-ation routes. “What we’ll have here is an island,” Marlow says. “All of Ghent will be under about two feet of water before we see water.” The need for that feature was driven home during Hurricane Sandy in 2012. “We almost lost the Midtown Tunnel,” Marlow notes. “The drain-age system backs up at an elevation of 6 and one-half feet. The water got up to seven feet. Water was rushing in, and we were frantically pumping it out. Luckily the river backed off at the last minute.”

The concrete used for the tubes and in the approaches to the tun-nel was designed to last 120 years. “We ran over 100 test batches of concrete for the tunnel tubes to ensure that they would meet the specifications and workability requirements,” Marlow notes.

Rehab work on the existing Midtown Tunnel will begin once the new tunnel opens, with ERC repair-ing leaks and tiles and installing a new ventilation system. Comple-tion is scheduled for May 2018. The Downtown Tunnel is already getting a much needed overhaul, with a repaved road bed and new lights, ventilation and traffic con-trol systems. Rehabbing the Mid-town Tunnel and both tubes of the Downtown Tunnel is projected to cost about $120 million.

Along with the new and reha-bilitated tunnels, contractors are extending U.S. 58 Martin Luther King Freeway from London Boule-vard to Interstate 264 with an inter-change at High Street. The state purchased 88 parcels to extend and elevate the freeway, leading to the dislocation of about 60 homes. On the Norfolk side, the interchange

is being modified at Brambleton Avenue and Hampton Boulevard.

And, while cranes and beams still dot the landscape, the project has already received accolades. Roads & Bridges magazine recently named it the No. 1 Road Project in North America for 2014. The trade publication, which honors the top 10 projects for successful naviga-tion of challenges, the scope of the work and regional impact, cited ERC for both constructing a new tunnel, and taking on the rehabili-

tation of the existing tunnels and extending the Martin Luther King Freeway Extension with minimal disruption to traffic.

Laurels aside, the ERC feels the eyes of millions of motorists, busi-nesses and public officials watching as it works to deliver the project on time. “We’re held to a constant standard,” Marlow says. “We have key performance indexes we have to meet or maintain. We have a job to do, and we’re taking revolution-ary risks.”

When construction is complete, the Midtown Tunnel will feature state-of-the-art features such as jet fans, a deluge system, fi re sensors, fi re alarms, extinguishers and motorist aid phones.

The Midtown Tunnel’s concrete elements were built in Sparrow Point, Md. and

fl oated 220 miles to the Elizabeth River.

20 A publication of Virginia Business magazine Photo by Mark Rhodes

Creating synergyBusiness execs want to create a Richmond-Hampton Roads mega region

by Richard Foster

At some point in the future, every Richmonder sporting those snappy RVA bumper

stickers may be swapping them out for ROVA stickers – for Richmond to the Oceanfront. That is, if Thomas R. Frantz has his way.

Chairman and CEO of Rich-mond-based law firm Williams Mul-len, Frantz is also a volunteer mem-ber of the Hampton Roads Business Roundtable and is one of the prime movers behind an effort to market Richmond and Hampton Roads as a single “mega region.”

“We’re trying to educate and weave the beginning of a discus-sion as to why we should move in this direction,” says Frantz, who has been frequently speaking on the topic to state and local business

groups. “We’re not advocating the consolidation of any government … [or] any services. … All we’re talking about is what amounts to a market-ing strategy to market this region better to the world.”

A little over a year ago the mem-bers of the Hampton Roads Busi-ness Roundtable and the Richmond Management Roundtable passed a joint resolution to explore an effort to combine the regions into a single Combined Statistical Area (CSA) or Metropolitan Statistical Area (MSA). Such a move could be done infor-mally via cooperative marketing efforts or formally by applying to the U.S. Office of Management and Budget to join the two existing Rich-mond and Hampton Roads MSAs, Frantz says.

The combined region would stretch from the Richmond metro area into North Carolina and would include all of Hampton Roads.

Separately, Richmond and Hamp ton Roads, rank 44th and 37th, respectively, in size among U.S. metropolitan areas, but together they’d be the 16th largest MSA, Frantz says, and that would translate into more advertising dollars, more foreign investment, more corporate headquarters looking at the region for relocations and more federal dol-lars for infrastructure improvements. The combined region would also hold about 40 percent of the Virginia General Assembly’s legislators.

By boosting new economic development and trade, it would also lessen Virginia’s dependence

MEGAREGION

Williams Mullen Chairman and CEO

Tom Frantz says creating a mega region

will make it easier to attract corporate

headquarters and foreign investment.


on federal defense spending, Frantz says.

“It just makes sense from an eco-nomic development standpoint that the larger your MSA, the better you can compete on the national and the international scale,” says Bryan K. Stephens, president and CEO of the Hampton Roads Chamber of Commerce.

The concept would package together the combined region’s greatest assets — including the Port of Virginia’s marine terminals, Rich-mond’s central location at the cross-roads of interstates 64 and 95 and Richmond’s status as state capital.

“The Port of Virginia is the key because it’s such a wonderful asset,” says Tayloe Negus, a partner with Aon Hewitt and a volunteer mem-ber of the Richmond Management Roundtable.

Marketing a combined region would result in greater synergies with the Port of Richmond, which is oper-

ated by the Virginia Port Authority, which runs the state-owned terminals of the Port of Virginia. Negus could see the Richmond port becoming more like the Virginia Inland Port in Front Royal, attracting more distribu-tion centers and advanced manufac-turing operations.

Increased volume at the Port of Virginia also would result in increased profits and tax dollars that could be reinvested in the region’s growth and infrastructure, Stephens says.

The Richmond and Hampton Roads roundtables are discussing establishing an umbrella organiza-tion to take up the banner for a mega region. They’ve also identi-fied key steps that would need to be taken to create a mega region and have appointed a joint task force to examine the feasibility. Those steps include widening Interstate 64 between Hampton Roads and Rich-mond; improving traffic flow on U.S. Route 460; deepening the Port of Vir-

ginia’s marine terminals to 55 feet (an effort already in progress); improv-ing and increasing traffic between the Port of Virginia and the Port of Richmond; adding more high-speed rail connectivity; and increasing the number of available sites for large-scale industrial development.

Frantz also has called for increased cooperation and busi-ness ventures between health-care, medical research and biotech firms in Richmond and Hampton Roads, especially at the medical and research hub at Princess Anne Com-mons in Virginia Beach.

“If we could connect the gov-ernment, the crossroads and the port, everybody in that corridor is a winner,” says Frantz, “and we have a greater opportunity to be a logis-tics hub, a manufacturing hub and a health-care hub and diversify our economy and reduce the reliance on government and defense con-tracts.”

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24 A publication of Virginia Business magazine Photos courtesy The Apprentice School

Building the next generation of workersHampton Roads’ maritime community working to fill skills gap

by Veronica Garabelli

For Donnie Mills, owner of Mills Marine & Ship Repair in Suffolk, it’s a struggle to find skilled

laborers for his ship repair and manufacturing business.

“A lot of the general labor people that we are seeing, a lot of them have never been in a shipyard before,” says Mills.

Mills’ dilemma is not new in the ship repair and building indus-try, which is facing a major skills gap due to the retirement of baby boomers. According to William W. “Bill” Crow, president of the Virginia Ship Repair Association (VSRA), the industry expects to lose

more than 16,000 workers by 2020. The association represents more than 250 companies who are look-ing for ways to fix that problem and “make the age needle move in the right direction,” Crow says. It is one of many organizations in Hamp-ton Roads offering educational resources in the maritime industry.

One example is VSRA’s Pre-Hire Career Training Program, which was originally launched in 2010 by Newport News Shipbuilding (NNS) and the state’s community colleges. Through the initiative, companies partner with community colleges to offer training that will lead to

employment in an entry-level field in the ship repair and shipbuilding industry. Students pay the $250 tuition up front but are reimbursed if they are hired by one of the com-panies in the program. Last year, during its pilot run, the program offered coatings and marine elec-trical courses through Tidewater and Thomas Nelson community colleges, respectively. This sum-mer, they will add marine welding and outside machinist classes, since those skills are in demand in the industry, says Barbara Washer, the association’s interim develop-ment coordinator. She says that

EDUCATION

The shipbuiding and ship repair industries are facing a major work-force shortage. The industry is supporting many

job-training programs to combat the problem, such as the Newport News Shipbuilding’s apprenticeship program.


out of 29 students that participated in the program last year, 22 were offered positions with participating companies.

VSRA also provides community colleges and technical schools in the state with the Technical School Welding Ship Skills Resource Handbook. The manual aims to help teachers at these institutions adapt their current curriculum for use in a shipyard environment and help them educate students on the opportunities available in the ship repair and shipbuilding industry. The association also is developing a similar curriculum for electrical students in Virginia.

Another major educational force in the industry is the Newport News Apprentice School of Ship-building, run by NNS to strengthen its workforce of more than 23,000. NNS, a division of Huntington Ingalls Industries Inc., is the only builder of U.S. Navy aircraft carriers and one of two providers of U.S. Navy submarines.

Overall, the school offers apprenticeships in 19 trades and eight optional advanced programs, where students can pursue an asso-ciate’s degree through Thomas Nelson or Tidewater community colleges on the Apprentice School’s dime. The school also has part-nered with Old Dominion Univer-sity in Norfolk to offer apprentices a bachelor’s degree in mechanical or electrical engineering. Overall, the school has articulation agreements with nine colleges and universities.

Starting May 11, apprentices at the school will earn $16.51 hour and by the end of their apprenticeship they can earn $26 per hour. Those figures don’t include overtime, which can boost pay even more. However, the school remains com-petitive to get into. It has averaged 3,998 applications annually over the past eight years, with about 220 students starting at the beginning of each school each year.

Prospective Apprentice School students can also look forward to new digs. In December 2013, the school

opened a new 90,000-square-foot building in downtown Newport News, which tripled the school’s instructional space. The facili-ties include computer labs, video teleconferencing classrooms and a 600-seat gymnasium.

But apprenticeships also are available at small employers, like Técnico Corp. The Chesapeake-based subcontractor’s customers include the U.S Navy and com-mercial shipping organizations. Its apprenticeship program offers training for shipfitters, welders, machinists, electricians, pipefit-ters, sheet metalists, and heating, air-conditioning and refrigeration (HVAC) mechanics. Like other apprenticeship programs, Téc-nico’s apprentices get paid while they earn. They learn skills on the job and take community college classes at night they can apply to their trade. Although Mills Marine & Ship Repair currently does not have an apprentice program, Mills says he’d like to develop one in the future. Terry Stead, corporate plan-ner at Técnico, says the company wants to pass knowledge to the next generation through its appren-ticeship program and develop its

future leaders. “It’s a win-win situa-tion,” he says.

Another maritime education institution in Hampton Roads is the Mid-Atlantic Maritime Academy (MAMA) in Norfolk. The academy, which provides vocational training for maritime professions, recently expanded its facility from 21,000 square feet to 35,000 adding con-ference rooms, video teleconfer-encing capabilities and space for an upcoming dynamic position-ing course. Overall, MAMA offers about 80 courses, including classes on fire fighting and ship navigation and management.

Old Dominion University’s Maritime Institute in Norfolk also is hoping to expand its offerings. The institute is working to offer students a master’s degree in Maritime Trade and Supply Chain Management. The new program would likely start in January 2016 — if it receives approval from the State Council of Higher Education for Virginia, says the institute’s executive director Wayne Talley. The institute currently has an undergraduate major in Maritime Trade and Supply Chain Management, where nearly 90 stu-dents are enrolled.

The Newport News Apprentice School of Shipbuilding offers apprenticeships in 19 trades and eight optional advanced programs.


But that’s not the only major news at ODU’s Maritime Institute. Last summer, the organization hosted the Conference of the Inter-national Association of Maritime Economists (IAME), which brought 250 people from around the world to Norfolk. One hundred and fifty academic papers were presented at the event, which was held for the first time in North America since 1995. The organization’s more than 400 members include academics, graduate students, and industry and government representatives.

“The conference gave great exposure to our maritime program, the Port of Virginia and the local maritime community,” Talley said in an email summarizing the event.

The Southeast Maritime and Transportation (SMART) Center, hosted by Tidewater Community College (TCC), also is working to build a pipeline of workers in the maritime and transportation industries. The center is one of 40

National Science Foundation (NSF) Advanced Technological Education Centers, which aim to bolster the skills of technicians in the U.S.

The SMART Center offers a pathway where students can stack certificates to earn an associate degree in maritime technologies from TCC and San Jacinto College in Texas. The center is working on a similar pathway that would lead to an associate’s degree in transporta-tion technologies at Anne Arundel Community College. Barbara Mur-ray, the center’s executive director, says that completions of maritime technologies courses at TCC have steadily increased since 2010 when the center opened.

Besides students, the center also teaches educators about the mari-time and transportation industries. This year, for example, the institute will once again hold its Smart Center Maritime and Transportation Insti-tute, which provides educators in the Science, Technology, Engineering

and Math (STEM) fields with insight on the maritime and transportation industry, and how they can better promote avenues to STEM careers. The institute will be held July 19-24 at Tidewater Community College and earlier in the summer at Anne Arundel Community College in the Baltimore area and San Jacinto Col-lege near Houston.

In 2014, the SMART Center also released a video series, which shows the benefits of careers in the maritime and transportation indus-try. The videos, which feature first-hand accounts from workers in the field, are being shown to students nationwide to promote careers in the sector.

“Our mission in changing the face of the maritime and transporta-tion industry has been accomplished, all while knowing … there is much more to do,” Murray says in an email.

So far, it seems that the SMART Center and others are on the right path.

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COMMENTARY

2015 forecast for ocean shippingby Mike Coleman

As predicted, 2014 brought its share of challenges in the ocean freight market. From the constant rate

fluctuations we have come to expect on many trades to unforeseen levels of con-gestion at our own ports, shippers, car-riers, and third-party logistics providers alike were forced to adapt to a shipping environment that is more complex than ever.

On the transpacific eastbound trade, attempts at spot market General Rate Increases (GRIs) in 2014 began as monthly occurrences and eventually shifted to a bi-weekly schedule. The GRIs were only occasionally successful, but the frequency of the changes resulted in significant increases over the course of the year.

In 2015, we are already seeing higher rate levels year-over-year as we head into the contract negotiation season. While early 2015 GRIs have not been fully implemented as announced, the result of last year’s increases indicates that we will continue to see higher rates overall on this trade.

The vessel supply and demand gap continues to narrow, but it will remain a factor in 2015. According to Alphaliner, carriers will take delivery of 1.8 million twenty-foot equivalent units (TEUs) of new capacity this year, representing an 8 percent increase year-over-year. In con-trast, demand is expected to rise only 3 to 5 percent. The majority of the deliver-ies will be mega-vessels with capacity over 10,000 TEUs, many with capacity of at least 13,000 TEUs. While rates can be expected to rise year-over-year, we expect downward pressure on the freight market before this year’s peak season due to per-sistent supply and demand imbalance.

Last year brought new developments on the carrier alliance front. The P3 Alli-ance, originally announced in 2013 as a partnership between the world’s three largest ocean carriers (Maersk, MSC and CMA-CGM) failed to gain China’s seal of approval. Plans for the P3 were subsequently canceled, and the carriers involved moved forward with alternative alliances. Maersk and MSC joined forces to create 2M Alliance, which operates at an estimated combined capacity of 2.1 million TEUs, 1.2 million of which are on the transpacific trades.

In response to the 2M, CMA-CGM entered into a competing transpacific alliance, the Ocean Three (O3), with

United Arab Shipping Company and China Shipping Container Lines. The goal of these and other ocean carrier partnerships such as the longer-standing G6 and CKYH alliances is to real-ize operational efficiencies and gain economies of scale where possible. While concerns about a monopolistic market struc-ture remain, the more likely long-term result of these arrangements is improvements in customer service, sailing options, and rate stability.

The potential for consolidation in the form of mergers and takeovers, however, is cause for greater concern. In 2014, Hapag-Lloyd and CSAV completed a merger that created the world’s fourth largest ocean carrier. The potential for additional “mega-mergers” remains as carriers search for new ways to improve their bottom lines and increase market share. The focus for now remains on alliances, but future development in the area of mergers is something to watch.

On the domestic front, port conges-tion is the most significant development we have seen over the last year. On the West Coast, strained negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) resulted in unprecedented delays in the second half of 2014 continuing into 2015.

After the involvement of the federal government in early 2015, an agreement was reached on a new master contract, but the effects of the situation are ongo-ing across the supply chain. Cargo mov-ing in and out of the Ports of Los Angeles and Long Beach, collectively the largest in the U.S. and the ninth largest in the world, was delayed for as long as six weeks. Vessels sat anchored offshore waiting for other vessels to sail, some-times for weeks at a time. West Coast ports are currently working to recover, but the delays are expected to continue for at least the next few months.

Closer to home, the Port of Virginia has been experiencing significant con-gestion. The situation has been exac-

erbated by surging volumes and winter weather shutdowns. Port management has assured the industry that steps are being taken to alleviate truck wait times and delays.

Portsmouth Marine Termi-nal has been reopened, gate hours have been extended, container handling equipment has been repositioned, and

various other steps have been taken to improve efficiency amid record volumes. In the meantime, cargo moving in and out of the Port of Virginia continues to be subject to delays and associated costs. With the port’s continued active engagement of the industry and addi-tional infrastructure investment, we are confident resolution will come sooner rather than later.

Port congestion has also directly affected the efficiency of the trucking industry, which has struggled in recent years due to hours of service reductions and driver shortages. It is increasingly more difficult to recruit new drivers to the field, and capacity continues to shrink. Chassis availability is another growing concern; ports and truckers are still work-ing toward the most efficient solutions for making chassis readily available now that ocean carriers are out of the busi-ness of providing them. The challenges of truck power and chassis availability have forced increases in inland drayage rates across the board, a trend that is expected to continue.

Now more than ever, it is essential for shippers to work closely with their supply chain providers in order to antici-pate and mitigate the myriad challenges facing the industry. An experienced and proactive logistics provider will work with you to determine an effective, custom-ized solution to meet your needs. Not all factors impacting the supply chain can be foreseen or controlled, but a true logistics partner will provide the level of service necessary to evaluate the obsta-cles and navigate the current shipping environment in the most efficient man-ner possible.

Mike Coleman is president of CV International Group, a freight forwarder, customs broker, non-vessel-operating common carrier, and ships agency (also d/b/a Capes Shipping Agencies) headquartered in Norfolk. He can be reached at [email protected].


PORT STATS

Top 10 commodities by valueEXPORTS¹ IMPORTS¹

1 Machinery $5,323.85 Machinery $9,174.31

2 Plastic 2,213.19 Electrical machinery 2,667.33

3 Pharmaceutical products 1,639.81 Vehicles, not railway 2,570.25

4 Vehicles, not railway 1,478.10 Furniture and bedding 2,043.03

5 Electrical machinery 1,329.10 Pharmaceutical products 1,810.82

6 Organic chemicals 1,194.02 Plastic 1,545.36

7 Misc. grain, seed, fruit 1,057.30 Toys and sports equipment 1,165.34

8 Misc. chemical products 956.72 Beverages 1,037.86

9 Tobacco 923.48 Knit apparel 1,001.71

10 Wood 873.50 Rubber 953.49

1 In millions of U.S. dollars for 2014 at the Port of Virginia Source: U.S. Department of Commerce, U.S. Census Bureau, Virginia Maritime Association, Virginia Port Authority

Top 10 commodities by short tons

EXPORTS Short tons1 IMPORTS Short tons1

1 Mineral fuel, oil, etc. 41,225.43 Machinery 869.96

2 Wood 2,469.67 Salt; sulfur; earth; stone 644.98

3Misc. grain, seed, fruit

2,182.02 Furniture and bedding 617.66

4 Woodpulp, etc. 1,691.30 Misc. grain, seed, fruit 549.69

5 Cereals 1,425.81 Beverages 475.41

6Food waste; animal feed

1,294.52 Plastic 452.80

7 Plastic 665.73 Vehicles; not railway 435.49

8 Paper; paperboard 556.17 Mineral fuel, oil, etc. 427.16

9 Machinery 428.24 Fertilizers 393.77

10 Iron and steel 324.39 Wood 387.73

1 In thousands of short tons at Port of Virginia in 2014. One short ton is equivalent to 2,000 pounds.

Source: U.S. Department of Commerce, U.S. Census Bureau, Virginia Maritime Association, Virginia Port Authority

Top 10 tradinby total carg

EXPORTS1

1 Italy 5,690.89

2 Netherlands 5,490.20

3 Brazil 4,948.65

4United Kingdom

4,920.79

5 China 4,218.90

6 Turkey 2,704.47

7 South Korea 2,661.42

8 Morocco 2,451.78

9 Japan 2,204.54

10 France 2,141.10

1 In thousands of short tons for 2014. One short ton is equivalent to 2,000 pounds.


East Coast port market share

Ports TEUs Market share

1 New York/New Jersey 5,772,303 32%

2 Savannah, Ga. 3,346,024 18

3 Port of Virginia 2,393,039 13

4 Charleston, S.C. 1,791,986 10

5 Port Everglades, Fla. 1,029,237 6

6 Jacksonville, Fla. 922,255 5

7 Miami 876,706 5

8 Baltimore 770,139 4

9 Philadelphia 449,098 2

10 Wilmington, N.C. 280,347 2

Source: U.S. Department of Commerce, U.S. Census Bureau, Virginia Maritime Association, American Association of Port Authorities,

Virginia Port Authority

Top 10 trading partners by total value

EXPORTS1 IMPORTS1

1 China $3,277.61 China $9,148.83

2 Germany 2,156.57 Germany 4,513.21

3 Brazil 1,933.45 India 2,602.36

4 United Kingdom 1,821.32 Italy 2,475.82

5 Belgium 1,541.74 Japan 2,067.69

6 Netherlands 1,492.18 Brazil 1,985.68

7 Japan 1,200.63 United Kingdom 1,693.62

8 Saudi Arabia 1,120.95 Spain 1,174.98

9 India 993.91 France 1,161.54

10 United Arab Emirates 847.31 Indonesia 1,072.19

1 In millions of U.S. dollars at Port of Virginia for 2014. Source: U.S. Department of Commerce, U.S. Census Bureau, Virginia Maritime Association, Virginia Port Authority

Export/import TEUs handled at Port of Virginia

Export Import Total TEUs

2014 1,298,389 1,094,649 2,393,038

2013 1,187,321 1,036,301 2,223,532

2012 1,132,376 973,511 2,105,887

2011 1,032,136 885,893 1,918,029

2010 1,005,370 889,648 1,895,018

2009 928,360 816,868 1,745,228

2008 1,120,520 962,758 2,083,278

2007 1,128,343 1,000,023 2,128,366

2006 1,055,756 990,530 2,046,286

2005 1,013,059 968,896 1,981,955

TEU: Twenty-foot equivalent unit Source: Virginia Port Authority

ng partners go

IMPORTS1

China 2,042.41

Brazil 1,103.86

Germany 689.46

India 671.64

Italy 492.85

Turkey 405.61

Canada 352.92

France 326.20

Spain 272.21

Netherlands 266.22

Source: U.S. Department of Commerce, U.S. Census Bureau, Virginia Maritime Association,

Virginia Port Authority


Port Stats

2014 Trade overview

TOTAL

Short tons (thousands)

Metric tons (thousands)

Total cargo 67,334.78 61,085.71

General cargo 19,061.41 17,292.20

Container cargo 18,733.35 16,994.59

Break-bulk cargo1 328.06 297.61

Container units 1,373,138

TEUS 2,393,038

Total cargo dollar value $71,470.59

Vessel calls 2,789

Coal loadings1

(short tons)41,987.15

EXPORT



Total cargo 56,515.68 51,270.69

General cargo 10,388.92 9,424.66


Break-bulk cargo 45.20 41.00

Container units 743,091

TEUS 1,298,389

Total cargo dollar value 30,480.58

IMPORT



Total cargo 10,819.09 9,815.02

General cargo 8,667.23 7,862.77


Break-bulk cargo 277.61 251.84

Container units 630 TEUS 1,094,649 Total cargo dollar value 40,990.01

Source: Port of Virginia

1 Coal loadings and break-bulk cargo include international and domestic shipments.

Photo courtesy The Port of Virginia


EXPORTS

Finding new marketsExporting creates new opportunities for Virginia businesses

Think there’s an overseas market for your prod-uct or service, but not sure where to start?

Luckily, there are a number of state and federal resources to help companies navi-gate the complexities of exporting. Ranging

from one-day training sessions at the Virginia SBDC’s

Export University, to the two-year VALET (Virginia Lead-ers in Export Trade) program, companies can benefit from a wide range of sources when it comes to selling overseas.

Below are sources available for companies inter-ested in exporting.

VEDP – International Trade: Virgin-ia’s main point of entry for companies interested in exporting. The site of the Virginia Economic Development Partnership is packed with informa-tion about exporting and includes contacts for local trade managers. www.exportvirginia.org

Export.gov: Hosted by the U.S. Department of Commerce’s In -ternational Trade Administration, Export.gov combines the federal resources to help American busi-nesses plan international sales strategies. The site includes market research and trade leads from the Commerce Department, export finance information from the Export-Import Bank and the Small Business Administration, and agricultural export assistance from the United States Department of Agriculture. www.export.gov

U.S. Commercial Service: The U.S. Commercial Service helps com-panies start or develop the export of their products and services with trade counseling, market intelli-gence, business matchmaking and commercial diplomacy. www.export.gov/virginia

STATE PROGRAMS AVAILABLE:

Virginia Leaders in Export Trade: (VALET) Virginia Economic Development Partnership’s two-year program includes 50 companies interested in exporting. Participants receive $15,000 toward export-related expenses and help with creating an international sales plan and entry into new foreign markets. exportvirginia.org/programs/valet-program

Travel to market: The VEDP-International Trade works with companies to arrange trade missions that allow participants to meet face-to-face with potential buyers and distributors. exportvirginia.org/need-help/travel-to-market

International market research: The VEDP-International Trade offers Virginia businesses access to more than 75 consultants around the world. These advisers can provide in-country research specific to a com-pany’s product or service. They also can provide match-making services, helping companies meet potential customers or potential distributors. exportvirginia.org/international-market-research/

Passport to Global Markets: The Virginia SBDC (Small Business Devel-opment Center Network) offers export programs for companies that want to break into specific markets in three to 18 months. The program, taught by private-sector business experts, includes counseling from the Virginia SBDC and U.S. Commercial Service. Companies present their international business plans to a panel of experts and receive feedback. www.virginiasbdc.org/programs/passport-to-global-markets

Export University: The Virginia SBDC network offers these one-day pro-grams at locations around Virginia on international trade fundamentals.www.virginiasbdc.org/programs/passport-to-global-markets

KEY SOURCES

Just beginning? These sites can help get you started.

SBA Export Planner: Detailed infor-mation about everything from creating an export business plan to financing, accounting and useful technology for exporting. www.sba.gov/exportbusinessplanner

Exporting 101: A Basic Guide to Exporting helps businesses find in -formation about establishing and developing overseas markets for their products and services. export.gov/basicguide

Exporting how-tos: Detailed in -formation about everything from start-ing exporting to information on specific countries. exportvirginia.org/international-market-research/exporting-tos


NIA continues to renovate and refurbish

Norfolk International Airport (NIA) is upgrading its passenger terminal and planning to add another runway. The airport, which serves almost 3 million passengers each year, also recently completed a major upgrade of its general

aviation facilities, which are used by corporate and private aircraft at NIA. The upgrade expanded the parking area and updated its terminal building with new exterior lighti ng, exterior trim painting and the cleaning and sealing of all aggregate surfaces.

The airport’s passenger terminal is undergoing a major renovation spanning several years. The first phase of renovations was completed last year, which included a new skylight in the lobby, installation of terrazzo floor-ing in the lobby and the replacement of carpet and wall coverings around the outside of the lobby.

The airport also expanded the Transportation Secu-rity Administration’s passenger screening checkpoint on Concourse B.

NIA currently is undergoing the second phase of the refurbishment project, which includes a renovated security checkpoint at Concourse A, new and renovated restrooms, skylights and carpet in the arrivals building and ticketing lobbies. The project is scheduled to be com-pleted in spring 2016.

The airport continues to pursue funding for a paral-lel runway through the Federal Aviation Administration. NIA has completed a technical study of the proposed 6,700-square-foot runway, which would be located about 850 feet east of Runway 5/23. The airport is currently undergoing the first phase of a required environmental impact study for the new runway.

The Newport News-Williamsburg International Air-port continues to try to attract a low-cost carrier. AirTran left the facility in 2012, and People Express stopped its service from the airport in September when a truck hit one of its planes. Frontier Airlines, a low-cost carrier with flights serving Denver, pulled out in January.

RAIL

New CEO to take over at Norfolk Southern by Jessica Sabbath

Norfolk Southern Corp. is getting a new but familiar leader.

The company announced earlier this year that Norfolk Southern President

James A. Squires will become CEO in June. Current CEO Charles “Wick” Moorman IV will continue to be executive chairman of the company’s board of directors.

“Thanks to the dedica-tion of Norfolk Southern people, the support of our

customers and business part-ners, and the outstanding leadership team in place at Norfolk Southern — led by Jim Squires — I am confident that the company is poised for continued growth,” Moorman said in a statement when the promotion was announced.

Squires has worked for Norfolk South-ern since 1992. He has held a variety of executive positions at the Norfolk-based company, including senior vice president of

law, executive vice president of finance and executive vice president of administration.

Norfolk Southern is one of two class 1 railroads that serve the port’s marine terminals.

Both Norfolk Southern and CSX Corp. recently have undergone various projects to improve accessibility for goods coming to and from the Midwest. In early 2014, Norfolk Southern opened a Thoroughbred Bulk Transfer (TBT) terminal in Chesapeake, which specializes in the transfer of bulk commodities between rail cars and trucks.

The TBT can handle dry and liquid bulk, food-grade commodities such as flour, sugar, grains and plastic pellets, as well as aggregate products.

In 2010 Norfolk Southern opened the Heartland Corridor, a $290 million project that cut a day’s travel time from the time required for double-stacked container trains to travel from Hampton Roads to Columbus.

CSX is in the second phase of its $850 million National Gateway to provide a more

direct route from the mid-Atlantic to the Midwest for double-stacked container trains.

In November, CSX announced that the Federal Highway Administration had approved a construction alternative for CSX’s Virginia Avenue Tunnel project in Washington, D.C., a key piece of its National Gateway. The project would rebuild the tunnel to accommodate double-stacked container trains.

The announcement was made after three years of input from residents, busi-nesses and government agencies located in the neighborhood around the tunnel in southeast D.C. Construction is scheduled to begin this year and take 30 to 42 months.

Rail traffic is a key component of future growth at the Port of Virginia, although rail growth tapered a little bit last year. Cargo moved via rail grew 4 percent last year, com-pared to 11 percent the prior year.

Rail cargo now makes up 33 percent of all container traffic moved at the Port of Virginia’s terminals.

sengers each year, also recently comp

Air cargo handled at Hampton Roads airports

Year NIA NNW

2014 55,637,623 29,121

2013 58,113,441 34,042

2012 70,424,886 39,124

2011 64,354,839 37,994

2010 63,212,040 56,106

2009 59,015,963 38,094

2008 64,083,225 73,440

2007 70,056,727 33,626

2006 68,778,934 26,602

2005 70,990,700 19,353

2004 70,316,492 26,372

NIA: Norfolk International Airport NNW: Newport News/Williamsburg International Airport

Source: Individual airports

pleted a major upgrade of its general p

Passengers at Hampton Roads airports

Year NIA NNW

2014 2,965,306 532,655

2013 3,112,355 544,031

2012 3,299,712 646,550

2011 3,193,388 1,058,505

2010 3,332,466 1,062,007

2009 3,409,456 1,019,336

2008 3,549,204 1,045,369

2007 3,714,323 1,056,303

2006 3,703,664 1,052,946

2005 3,844,422 1,058,839

2004 3,778,216 915,968

NIA: Norfolk International Airport NNW: Newport News/Williamsburg International Airport

Source: Individual airports

AIRPORTS

Squires


Growing painsCongestion hurts motor carriers, but major projects are on the horizon

With the increase in cargo coming through the Port of Virginia, motor carriers

have been suffering. Ed O’Callaghan, owner of Audax Transportation, an agent for Century Express, says that each of the 35 motor carriers in his company were able to move an average of 3.9 containers per day in 2013, while that dropped to two containers per day in 2014. Averages for his company dropped even lower in early 2015 when the port faced backups caused by four days of snow

closings.“From a trucking company’s

perspective, it’s all about productiv-ity,” says O’Callaghan. “We measure productivity by how many containers a truck may move a day.”

The Port of Virginia is implement-ing a number of short-term and long-term solutions to improve service predictability and relieve conges-tion for motor carriers, including the creation of an appointment system at Norfolk International Terminals in June and the paving of a desig-

nated area for empty rail containers at Virginia International Gateway. For more information on the port’s con-gestion mitigation plans, see page 4.

Truckers also should see improve-ment on the areas highways. New money dedicated to the region’s transportation projects mean a number of projects are underway to relieve traffic on the region’s roadways.

Following are just some of the examples of transportation projects in the region.

TRUCKING

I-64 Widening (Newport News/York County/James City County)

About the project: A 12-foot wide traffic lane and shoulder will be added in each direction to three segments of I-64 between Jefferson Avenue (Exit 255) and Yorktown Road (Exit 247); between Yorktown Road (Exit 247) and Hummelsine Pkwy/Rt. 199 (Exit 242); and between Hummelsine Pkwy/Rt. 199 (Exit 242) and Lightfoot Rd/Rt. 199 (Exit 234). Status: ● Segment 1 ($122 million): Contract awarded February

2015 is expected to be complete in December 2017.● Segment 2 ($214 million) Public hearing will be held in

April 2015 and request for proposals is scheduled for June 2015.

● Segment 3 ($311 million) Preliminary engineering starts in 2017.

I-564 Intermodal Connector (Norfolk)

About the project: ($169 million) To create a high-speed highway connection from the existing I-564 to Norfolk International Terminals and the Norfolk Naval Station. This will alleviate congestion, reduce truck traffic on city and naval station streets and be the first section in place for the eventual Patriot’s Crossing, or the “Third Crossing.”Status: Contract awarded. Construction starts fall 2015.

Hampton Boulevard Grade Separation (Norfolk)

About the project: ($105 million) Hampton Boulevard will be depressed under existing railroad tracks to remove the need to disrupt vehicular traffic for railway movement in and out of the port terminals.Status: Construction underway. Expected completion: summer 2015.

Elizabeth River Tunnels/MLK Expressway (Portsmouth)

About the project: ($2.1 billion) Construction of a new tube is underway for the Midtown Tunnel, expanding it from two to four lanes. The current Midtown Tunnel and the Downtown Tunnel will be rehabilitated and a new MLK Expressway is being built. See page 17 for more information.Status: Under construction. On schedule for completion in 2018.

Route 460 Improvements (Suffolk/Isle of Wight County)

About the project: ($375-$425 million) The Commonwealth Transportation Board is supporting a new location to build a new four-lane, divided highway from a new U.S. 460/58 interchange in Suffolk to west of Windsor. Status: Location approved. Project under negotiation.

I-64/I-264 Pavement Rehabilitation (Norfolk/Virginia Beach)

About the project: ($128 million) The project will repave and restore distressed pavement over 163 lane miles of I-64 and I-264.Status: Under construction. Completion by end of 2015.

Gilmerton Bridge (Chesapeake)

About the project: ($134 million) Construction of a new vertical lift span bridge over the Southern Branch of the Elizabeth River. This replaces a bridge built in 1938 and has vertical clearance of 35 feet and up to 135 feet when fully opened.Status: Construction underway. Anticipated completion by summer 2015.

34 A publication of Virginia Business magazine Photo courtesy Port of Virginia

FOREIGN TRADE ZONES

Smart exportingFTZs help reduce export costs for U.S. manufacturers

It’s easier for Port of Virginia custom-ers to take advantage of federal ben-efits designed to boost exports.

A year ago Foreign Trade Zone # 20 received federal approval to reor-ganize under the Alternative Site Framework (ASF). The Port of Vir-ginia is the grantee for FTZ # 20, one of the largest geographic zones in the country.

The service area of FTZ # 20 includes the counties of Accomack (part), Gloucester, Isle of Wight, James City, Mathews, Northampton, South-ampton, Sussex, Surry and York and the cities of Chesapeake, Franklin, Hampton, Newport News, Norfolk, Poquoson, Suffolk, Virginia Beach and Williamsburg.

The ASF designation expedites the approval process for companies seeking FTZ site designation. Once companies send their applications to the Foreign-Trade Zones Board, the approval process now takes about 30 days, instead of the typical 10 to 12

months previously.“It’s going to take awhile for it

to mature, but it’s at a good point where we can leverage it in the mar-ket as we talk to companies that look to expand,” Joe Harris, vice president of communications for the Port of Vir-ginia, says of economic development efforts with the new designation.

In the past year, Givens has expanded its FTZ site, and Becker Hydraulics of Germany agreed to open a manufacturing facility in the Cavalier Industrial Park. The port con-

tinues to work with several companies to bring new sites and subzones to the zone.

FTZs are strategic tools for U.S. manufacturers. They are specific geo-graphic locations that allow manufac-turers to lower their taxes and stream-line their exports because they are considered outside U.S. Customs and Border Protection (CBP) territory.

Companies operating in FTZs are required to pay duties on products only if and when they enter the U.S. market place. That means companies operating in an FTZ can defer, reduce or eliminate duties on imported prod-ucts. Product components can be stored, assembled, manufactured, tested or repurposed in the zone, and custom duties are not applied on any exported products.

FTZs are most useful when the duty rate on raw materials is higher than the duty rate on the finished product and when the volume of imported shipments is high.

Foreign trade zonesSite

Number Site City Status1

Active site

3 Givens Chesapeake Usage-driven site

25 Cargoways Logistics/ Norfolk Marine Terminal Suffolk Usage-driven site

35 Katoen Natie Norfolk Inc. Norfolk Usage-driven site

9Cavalier Industrial Park (Usui International Corp. and Becker Hydrualics USA)

Chesapeake Magnet site

21 Virginia Regional Commerce Park (Sumitomo) Suffolk Magnet site

20E Stihl Inc.2 Virginia Beach Subzone site

20D Canon Virginia Inc.2 Newport News Subzone site

Non-active sites

22 Port Norfolk Holdings Norfolk Usage-driven site

36 Grandwatt Electric Corp. Suffolk Usage-driven site

19 Shirley T. Holland Commerce Park Windsor Magnet site

23 Virginia Commerce Center Suffolk Magnet site

24 Westport Commerce Center Suffolk Magnet site

34 Suffolk Intermodal Center Suffolk Magnet site

1 Magnet Sites are usually located at ports or industrial parks. They are open to multiple zone users. 2 Subzones/Usage-driven sites are approved for a specifi c company/use.Source: Port of Virginia

MARITIME LAW

Maritime lawyers


Vandeventer Black has a tradition of representing maritime clients for over 130 years. Our team represents domestic and international interests in virtually all areas of marine law. We offer a diverse range of maritime-related legal services and have the depth and experience to handle the full spectrum of legal issues that arise.

101 W. MAIN STREET 500 WORLD TRADE CENTER NORFOLK, VA 23510 757.446.8600 VanBlackLaw.com

PUT OUR HISTORYON YOUR SIDE

CollisionCargo Damage Vessel Sales/Financing & DocumentationCustoms Law

Charter Parties & Bills of Lading Ship RepairMaritime Litigation & Arbitration Coast Guard Matters

Terminal Operations PollutionOffshore Renewable EnergyPersonal Injury Defense

Law firm City Website/email Phone number1 Number of ma ritime lawyers2

Berkley III, Law Office of Waverly L. Norfolk [email protected] 625-2230 1

Bouffard, Law Office of Henry P. Norfolk hbouffardlaw.com 663-7572 1

Bowman Green Hampton & Kelly Chesapeake bghklaw.net 548-2323 1

Burnette, Law Office of M. Lawrence Newport News [email protected] 930-0322 1

Crenshaw, Ware & Martin PLC Norfolk cwm-law.com 623-3000 3

Dalcher, Law Office of Bruce P. Norfolk dalcher-law.com 995-4425 1

Davey & Brogan PC Norfolk daveybroganpc.com 622-0100 4

Furr Law Firm, Carter B.S. Norfolk [email protected] 622-2258 1

Gawrys, Law Office of Joseph A. Virginia Beach N/A 486-6660 1

Hughes III, Robert M. Virginia Beach N/A 463-2612 1

McGuireWoods Norfolk mcguirewoods.com 640-3700 1

Patten, Wornom, Hatten & Diamonstein LC Newport News pwhd.com 320-5171 1

Rutter Mills Norfolk ruttermills.com 622-5000 3

Schempf & Ware PLLC Yorktown 4000law.com 240-4000 1

Serpe, Law Office of Richard J. Norfolk serpefirm.com 233-0009 1

TaylorWalker PC Norfolk taylorwalkerlaw.com 625-7300 1

Troutman Sanders Norfolk troutmansanders.com 640-0004 3

Vandeventer Black LLP Norfolk vanblk.com 446-8600 18

Ventker Warman Henderson PLLC Norfolk ventkerlaw.com 625-1192 3

Waters Law Firm PC Norfolk waterslawva.com 446-1434 1

Willcox Savage Norfolk willcoxandsavage.com 628-5500 4

1 All phone numbers are (757) area code. Source: Maritime Law Association of the United States2 This list includes only Hampton Roads-based lawyers who are members of the Maritime Law Association of the United States. It does not include general counsel attorneys.


INTERNATIONAL FIRMS

Continental Automotive Systems

Continental is no stranger to Hampton Roads. It has had

a location in Newport News for more than 40 years, so it was welcome news when the com-pany announced plans to invest approximately $150 million to start producing turbocharg-

ers and increase production of its gasoline high-pressure injector, fuel rail and pump assembly lines. Virginia beat out Mexico for the project, which is expected to create more than 500 new jobs in the commonwealth.

International firms with operations in Hampton RoadsCountry Number of

companiesPercent of total

Germany 30 18%

Japan 25 15

Other* 21 12

United Kingdom 17 10

Switzerland 12 7

Canada 11 6

France 11 6

Netherlands 10 6

Sweden 11 6

Italy 9 5

Austria 6 4

China 4 2

Denmark 4 2

TOTAL 171

*Other includes Australia, Belgium, Brazil, Finland, Greece, Hong Kong, Iceland, Israel, Liechtenstein, Malaysia, Norway, Spain,

Turkey and United Arab Emirates.

Sources: Hoovers Inc.; Virginia Economic Development Partnership; Virginia Employment Commission; cities/counties

Foreign firms promote job, economic growth in Hampton Roads

Companies with international ties made a splash in Hampton Roads last year. Most economic devel-

opment announcements from foreign-affiliated firms in the area were expansions, such as Continental Automotive Systems’ decision to ramp up production in Newport News, which will add approximately 500 new jobs. The automotive supplier is a division of Ger-many-based Continental. But the region snagged new international firms too, like Italy-based Pacorini, which is supporting the local operations of Green Mountain Coffee Roasters, manufacturer of Keurig’s K-cups.

According to the Hampton Roads Economic Development Alliance (HREDA), the region is home to 171 foreign firms, most of which are from Germany. The bulk of international companies are in the manu-facturing or service industries (75 percent) and the rest are in the distribution business.

Below is a roundup of new jobs announced by international companies in the area in 2014, according to the Virginia Economic Development Partnership’s database of economic development announcements.

Ferguson Enterprises

When Ferguson Enter-prises, the nation’s larg-

est wholesale plumbing distrib-utor, outgrew its national sales center in Newport News, it didn’t look far for its expansion. It recently moved the center

to Hampton and plans to add 163 jobs in the city by the end of the next fiscal year. Though Ferguson Enterprises is head-quartered in Newport News, its parent company, Wolseley, is based in Switzerland.


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Industry breakdown for region’s international firms Industry Number of

companiesPercent of total

Service 69 40%

Manufacturing 59 35

Distribution 43 25

TOTAL 171

Sources: Hoovers Inc.; Virginia Economic Development Partnership; Virginia Employment Commission; cities/counties

Canada Metal Pacific

A newcomer to Hampton Roads’ roster of international firms is Canada Metal Pacific,

which makes marine and industrial products. The Canadian company is investing $3 million to establish its first manufacturing operation in Virginia Beach, a move that’s expected to create 70 new jobs over the next three years.

Pacorini and Massimo Zanetti Beverage USA

According to Suffolk Mayor Linda T. Johnson, the city thinks of itself as the “caffeine capital

of Virginia,” and that may be for good reason. Italy-based Pacorini, a logistics services provider for the coffee ma rket, is investing half a million dollars to support Green Mountain Coffee Roast-ers’ operation in Isle of Wight County. Massimo Zanetti Beverage USA (also affiliated with an Italian company) announced a $4 million expan-sion to make filter cups for machines that accept Keurig Green Mountain Inc.’s K-Cups.

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Every dollar invested in HREDA over the last five years poured an extraordinary 12 dollars into the local economy. Learn about additional

advantages and opportunities an investment in the Alliance can offer your company. Visit hreda.com/investors or call (757) 627-2315

The Hampton Roads Economic Development Alliance travels the

globe to bring new business to Hampton Roads.

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Documents

2015 Hampton Roads Maritime & International Trade Guide