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By Bob Sharak of Hampton Roads Partnership. To the Tidewater Association of Service Contractors. Hampton Roads Business Development
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Regional Trends and Opportunities
Tidewater Association of Service Contractors
Bob SharakHampton Roads
PartnershipNovember 21, 2007
Hampton Roads
About the Hampton Roads Partnership
• Unique public-private Leadership organization formed in 1996.– 17 localities, 111 members– Chief elected officials and key
leadership in business, education, military, and labor.
• Mission– Provide leadership on
strategic issues that improve the region’s competitive position in the global economy.
Hampton Roads
About the Hampton Roads Partnership
• Goal– To engage in activities
leading to higher living standards for residents of Hampton Roads and stronger, more agile communities
– Only organization focusing on regional strategic issues
Hampton Roads PartnershipStrategic Plan
• Education – School Readiness
• Start Strong – Educational Attainment – Technological Research
• Hampton Roads Research Partnership
– 6 universities, 2 federal labs and a research institute
– 2 US EDA Grants ($1.2M)– Focus Areas: Sensors, Bio-
science and M&S
Hampton Roads PartnershipStrategic Plan
• Transportation – Traffic Congestion
• HRTA– Public Transit
• Regional Transit Study
• Regional Citizenship– America’s First Region
Campaign– Regional Stewards
Group
Hampton Roads PartnershipStrategic Plan
• Economy – Modeling & Simulation
• M&S Strategic Plan• State Budget Request• MODSIM World 2007
Conference & Expo
MODSIM World 2008!!MODSIM World 2008!!September 16-18 2008September 16-18 2008Virginia Beach, VAVirginia Beach, VA
Economic ImpactsModeling and Simulation Industry
Hampton Roads PartnershipStrategic Plan
• Economy – Port/Logistics
• Technology/ Automation– HRRP/WIRED Grant
• Logistics Hub– To be continued…
Identifying Regional Trends
Identifying Regional TrendsMajor Drivers of the
Regional Economy• Defense
– 2006 DoD spending approx. $16.8 billion (ODU)
– More than one-third of the $72 billion regional economy.
– Accounted for approx. 75% of Regional Economic Growth since 2001. (ODU)
Identifying Regional TrendsMajor Drivers of the
Regional Economy• Defense
– Nearly 112,000 military personnel, second largest concentration of military in the nation.
– Over 11% percent of all jobs. (HRPDC)
21.00%
30.10%
23.70%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
Vietnam (1969-1974) Regan Admin. Build-up(1983-1988)
War on Terror & Iraq(2001-2005)
Growth Spurts In Hampton Roads Gross Product
Source: Old Dominion University Economic Forecasting Project
Identifying Regional TrendsMajor Drivers of the
Regional Economy• Defense
– 2002 and 2003 growth strongest since the 1980s Reagan build-up. (ODU)
– Major growth spurts have come with Defense build-ups.
– It almost doesn’t matter what happens in the rest of the economy.
Identifying Regional TrendsMajor Drivers of the
Regional Economy• Defense
– Base closures • Reduce GRP $404.5
million by 2020. • Lose 1,223 civilian,
921 military and 248 contractor jobs by 2011.
Identifying Regional TrendsMajor Drivers of the Regional
Economy• Defense
– Slowing Defense growth slowing regional growth.
– 2007 regional growth below the historic average, slowest since 2000. (ODU)
– 2006 growth rate revised downward. (ODU)
Peak Rate
13.7%
Peak
Spending
$606.6bn
Identifying Regional TrendsMajor Drivers of the
Regional Economy• Defense
– Navy• FY 2008 active duty end
strength 45,000 below FY 2004 total.
• Battle force fleet 286 ships and submarines, compared to 292 ships and submarines. (CSBA)
• 11 aircraft carriers versus 12 in FY 2004. (CSBA)
– Air Force • Active duty end strength
projected to decline 48,000.
If Not Defense, Then What?I want to say one word
to you. Just one word. Are you listening?
“Logistics”
Distribution & Logistics
Why Logistics?• Facilitate Cargo Handling
& Transportation• Done Well it Lowers
Costs & Capital• Is Its Own Industry in
Today’s Global Economy• Done Very Well it Attracts
Other Business
Distribution & LogisticsMajor Drivers of the
Regional Economy• Port
– Over 30,000 jobs attributable to the Port. (ODU)
– Freight movements expected to increase dramatically in next 20 years from 2 million TEUs in 2005 to 5 Million by 2030. (Moffat & Nichol)
Distribution & LogisticsMajor Drivers of the
Regional Economy• Port
– APM Terminals investing $450 million in a new 300-acre container terminal in Portsmouth.• 2.1M TEUs Per Year• Phase1 2007• Finished 2009.
Distribution & LogisticsMajor Drivers of the
Regional Economy• Port
– Fourth VPA Terminal– 600-acre Craney
Island– $2,200,000,000
Investment– Stage 1 2017– 2.5 million TEUs/year
Distribution & LogisticsMajor Drivers of the
Regional Economy• Port
– Majority moved by truck • Increase 80 percent over
the next 20 years• Rail to grow 40 percent
too– By 2026, congestion will
reduce peak hour speed to 25 MPH.
– Traffic congestion affects rail too at intermodal transfer points.
Distribution & LogisticsMajor Drivers of the
Regional Economy• Port
– Rail could carry more – Heartland Corridor
project stretching from Norfolk to Chicago.• Cuts 233 miles from
the existing route• Reduce travel time by
a day and a half.
Distribution & LogisticsMajor Drivers of the
Regional Economy• Port
– Hampton Roads Transportation Authority
• Third Crossing• Southeastern Parkway• Dominion Boulevard • Midtown Tunnel• U.S. Route 460 • Widening I-64 (Peninsula)• Widening I-64 (Southside)
Distribution & LogisticsPort Business Trends• Outsourced
Manufacturing/US Imports
• Big Box Retailer Distribution Centers
– 10 To 15 Million SF are already In use
– Additional 20 to 60 Million SF Will Be Needed by 2030
Major Distribution Center Locations
Near Major Transportation Routes
Distribution & Logistics
Port Business Trends • An Opportunity
– $100bn in East Coast Containerized Cargo is Discretionary and its Growing
– All Of It Needs To Be Handled and Managed• Represents roughly $4 - $6bn in logistics services
– Handle It In Hampton Roads• Capture $1bn in logistics work??
Distribution & LogisticsPort Business Trends• Customers Desire:
– Low port cost and diverse services
– Cargo handling outside the port– Pre-zoned and available land – Efficient Transportation– Logistic Services – Distribution Center Development
• Door-to-Door Infrastructure• Friendly Business Environment
Distribution & LogisticsLand Use Planning• Work to identify best
locations– Good infrastructure
• Utilities• Roads
– Inexpensive Land– Good Labor Force– Buffers to non-
complimentary uses• Residential• Schools
One Consideration
US 460
Norfolk Southern
US 58
CSX
Buffer Area(s)
Industrial Area
Distribution & Logistics
Closing Thoughts?• Port Related Foundation
– Focused on Growth
• APM is Open• Craney Island in Progress• Heartland Corridor Opens
2009• New US 460• Panama Canal
Expanding 2014
• Conclusions?
• Questions?
Thank You!
Robert SharakVice President
Hampton Roads Partnership430 World Trade Center
Norfolk, VA 23510757-625-4696 (P)757-625-4684 (F)[email protected]
www.hrp.org