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Posted August 19, 2009 | Copyright © The Northern Virginia Daily
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Inland port idles half its work force

Low cargo volume forces system’s first layoffs

By James Heffernan — jheffernan@nvdaily.com

FRONT ROYAL — About half of the Virginia Inland Port’s work force was laid off earlier this month due to declining cargo volume across the Port of Virginia system.

Eight of the inland port’s 17 employees were among the 90 workers let go by Norfolk-based Virginia International Terminals, the system’s operating affiliate.

The layoffs are the first initiated by VIT in its 27-year history, according to President and CEO Joe Dorto. Prior to the Aug. 3 announcement, the company employed more than 450 people at its marine cargo terminals in Norfolk, Portsmouth and Newport News, and at the inland port, a freight transfer facility off U.S. 340-522 north of Front Royal.

The cuts were widespread, covering every division within the company and including both blue-collar workers and management, Dorto said.

He said the decision was a difficult one — “the most difficult thing I’ve ever had to do in my 40 years in the business” — but the system’s cargo volume for the fiscal year ended June 30 was down nearly 25 percent, and traffic at the inland port was off 35 percent.

“You can’t continue to carry that large of a work force when volume is down and a recovery may be years away,” he said. “It’s something we had to do to make sure the company was right-sized for the current environment.”

Industry experts have indicated it may be 2012 before conditions improve, he said.

Dorto said VIT took every cost-cutting step to avoid job losses, and was one of the last companies in the transportation chain to implement mass layoffs.

Affected employees will receive at least 60 days’ pay and health care coverage, and those with nine or more years of service to VIT will get a week of pay and a week of health coverage for each year of employment, the company said.

Dorto said VIT may rehire some laid-off workers when business picks up again.

According to a National Retail Federation report, cargo volume at major U.S. ports, including Hampton Roads, is starting to climb again, but the industry continues to see double-digit declines compared to 2008.

“The volumes are still far below that of last year, and it’s going to stay that way until the economy begins to recover,” says Jonathan Gold, NRF vice president for supply chain and customs policy.

A key component of the Port of Virginia system, the inland port receives oceangoing containers from Hampton Roads via a Norfolk Southern rail line. The cargo is unloaded onto commercial trucks, which carry it to major markets in Northern Virginia, the District of Columbia, Pennsylvania, West Virginia, Maryland and eastern Ohio.

“It’s the smallest terminal that we operate, but it’s also the most strategic,” Dorto said. “As long as we run that train, it will continue to be very important to us.”

Since opening in March 1989, the Virginia Inland Port has attracted 24 warehousing and distribution centers to the commonwealth that collectively employ more than 7,000 workers and provide $600 million annually in income, according to the Virginia Port Authority.

Stan Crockett, manager of the inland port, did not return phone messages seeking comment.

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