Commentary: Big ship era begins for Port of Virginia

John Milliken
Big ships making weekly stops at the Virginia port means cost savings for businesses wanting to get their products to market. Courtesy photo

A new era of international trade is underway on the East Coast and The Port of Virginia is well-positioned to cement its position as the mid-Atlantic’s primary global gateway for world trade.

In early May, the port welcomed the largest container ship to ever come to the East Coast. A few weeks later an even larger vessel arrived, further illustrating that the big ship era at The Port of Virginia is underway.

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

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

Changes in the shipping industry have led to ships of increasing size. Seven years ago, the average ship coming to The Port of Virginia, or any  East Coast port, was 4,000 TEUs. The ships that came to Virginia in May carry 13,000-plus TEUs (20-foot equivalent unit, industry-speak as a way of measuring the number of containers. A typical container seen on a railcar or the highway is 40 feet long, or two TEUs.)

 

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

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

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

Virginians benefit from the port because of greater access to imports that are sold locally. Some of our clothes, our furniture and our children’s toys are made elsewhere and shipped in volume by sea through the port to a distribution center — often also located in Virginia — and then to a nearby store. This sophisticated, high-volume logistics chain helps keep costs down and provides access to a variety of affordable products.

The Virginia Port Authority is a state agency that operates like a business. Our focus is moving cargo that drives economic development, investment and job creation across the Commonwealth.

With larger and larger ships dominating international trade, the port is engaged in a $670 million expansion project. This expansion assures shippers that their products, whether destined for markets worldwide or down the street, can be handled efficiently and at a reasonable cost over the long term.

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

John G. Milliken is chairman of The Port of Virginia Board of Commissioners.