Exports were a major part of former Virginia Gov. Terry McAuliffe’s economic plan for the Commonwealth, and that focus shows no signs of abating with his former lieutenant governor, Ralph Northam, occupying the governor’s mansion.
The Port of Virginia set a new annual container cargo volume record in fiscal year 2017, handling more than 2.84 million Twenty-Foot Equivalent Units (TEU), a 7 percent increase over the previous year. The record-setting year was the fourth in a row for the Port and its third consecutive fiscal year of profitability.
That increase reflects the importance of international trade to the Commonwealth, a top priority for Northam, who will speak on those topics at his Governor’s Conference on Agricultural Trade next week, focusing on Virginia agriculture and forestry exports.
McAuliffe traveled across the globe to try to secure new markets for Virginia exports, calling increased global trade “the center of the important work that we are doing to build a new Virginia economy” in his 2016 State of the Commonwealth address.
Canada is Virginia’s top export destination, followed by China, Mexico, the United Kingdom and Germany, and McAuliffe pushed for expansions in India, Japan and Cuba, among other countries. That global focus was reflected in the increased traffic at the Port, with loaded import and export volumes up 8.6 percent and 1 percent, respectively, over fiscal 2016. Those figures reflect traffic at all Port facilities, including increases in TEU, truck volume, rail volume and total volume at Richmond Marine Terminal, the barge facility on the James River.
Inside the Port
Most of Virginia’s shipping facilities are located near the Atlantic Ocean in Hampton Roads, but the Port of Virginia encompasses numerous facilities located across the state:
- Norfolk International Terminals
- Newport News Marine Terminal
- Portsmouth Marine Terminal
- Virginia Inland Port in Front Royal
- Virginia International Gateway in Portsmouth
- Richmond Marine Terminal
- The future Craney Island Marine Terminal in Portsmouth
Virginia has several incentives and tax credits related to the Port, all enacted in 2011 and highlighted by the Port of Virginia Economic and Infrastructure Development Grant, available in an amount of up to $500,000 per year to businesses that meet the following criteria:
- Locates or expands a facility in Virginia
- Creates at least 25 new, permanent full-time positions in Virginia from commencement of the project through the first full year of operation
- Is involved in maritime commerce or exports or imports manufactured goods through the Port
- Is engaged in one or more of the following: Distribution, freight forwarding, freight handling, goods processing, manufacturing, warehousing, crossdocking, transloading or wholesaling of goods exported and imported through the Port of Virginia; ship building and ship repair; dredging; marine construction or offshore energy exploration and extraction
Virginia also offers the following tax credits:
- Port Volume Increase Tax Credit for entities that increase cargo volume through Virginia port facilities by 5 percent in a single calendar year over their base-year cargo volume
- Barge and Rail Usage Tax Credit for the use of barge or rail (as opposed to truck transport) to move international cargo to or from Virginia port terminals
- International Trade Facility Tax Credit for creating new jobs or capital investment in an international trade facility as a result of moving 5 percent more cargo through a Virginia port facility than in the previous taxable year
Future Expansion Plans
Fewer ships are stopping in Virginia — a full 9 percent down in 2017 — but those ships are bigger, with more cargo capacity. That trend has driven the Port’s efforts to expand its terminals and dredge Norfolk Harbor to increase its capacity and widen navigation channels.
Virginia Port Authority (VPA) CEO John Reinhart said the port was instrumental in creating 5,525 jobs in 2017, along with the development of 3.37 million square feet of business space with an investment value of $1.02 billion. The Norfolk expansion, part of a $695 million redevelopment project aimed at doubling the container capacity at that terminal and Virginia International Gateway, is part of the Commonwealth’s efforts to grow those figures further.
A 2014 study from the College of William & Mary’s Raymond A. Mason School of Business found that the port generated $60 billion in in-state spending in fiscal 2013 and provided more than 374,000 jobs (direct, indirect and induced).
Other facets of those efforts include the recent adoption of the East Coast Gateway Terminal Agreement, approved by the federal government last April. That agreement allows the ports of Virginia and Georgia to share information and collaborate on certain projects with the goal of growing imports and exports in both states.
By 2020, the VPA hopes to increase container capacity by 40 percent through improvements like the installation of 86 new rail-mounted gantry cranes and the launch of an online trucker appointment system aimed at minimizing disruptions. Through those efforts, the Port hopes to maintain its upward trajectory regarding increases in cargo volume and help fulfill its major role in the Virginia economy.