Port Makes Progress in 2020 Despite the Challenging Trade Environment and Pandemic
Year closes with new December record, more than 260K units processed
The effects of the pandemic and trade tariffs on world trade had a significant impact on The Port of Virginia’s ® 2020 cargo volumes as the port saw a dip of more than 4 percent in its overall volume numbers for the calendar year.
“This year presented more challenges to world trade than the industry could have ever imagined and The Port of Virginia team and our ILA labor partners performed at a world-class level throughout,” said John F. Reinhart, CEO and executive director of the Virginia Port Authority. “Our volumes for 2020 are not what we had hoped for initially, but we finished the year without any interruptions in our operations and record-setting volumes in October, November, and December. Even though it was a difficult year, we delivered significant accomplishments.”
The port closed its year having processed more than 260,000 TEUs (twenty-foot equivalent units) in December, making it the best December volume on record. Comparatively, Dec. 2020 volumes were ahead of Dec. 2019 volumes by nearly 16 percent or 35,500 TEUs. The port set its all-time monthly volume record in Nov. 2020, having handled more than 280,000 TEUs and surpassing the mark of 274,000 TEUs set in Oct. 2020.
For the year, the port handled more than 2.8 million TEUs, which is 124,500 fewer units than in 2019. The losses, which came in every area of the operation, are attributable to the trade war with China and the Coronavirus pandemic.
“The trade issue with China was coming to a positive resolution around the time we began to see the effects of the pandemic on world trade,” Reinhart said. “Volumes slowed as the blank sailings mounted. We saw what was happening, we met the issue head-on and began to make the necessary adjustments in the operation.”
Among those adjustments were modifications to the operating hours; implementation of a critical cargo program to prioritize the movement of COVID-19-related cargo (test kits, personal protection equipment, etc.); creation of temperature-screening stations at the terminals; and an effort to sanitize common spaces and equipment multiple times each day.
“The hard work was worth it,” Reinhart said. “We maintained our continuity of operations, communicated with our customers, partners, and stakeholders, held the line on spending, and focused on those things that we could control: the safety and well-being of our colleagues and partners, and our performance. We did not lose a single day of productivity as the result of COVID and during the last quarter of the year processed record amounts of cargo without issue. This is a real testament to this team.”
Volumes began a slow rebound in July and trended upward through the rest of the year. During the last three months of the year, the combined total TEU volume was more than 814,000 units.
“When we consider how we served our customers and our accomplishments, we view 2020 as a year of success under extraordinary conditions,” Reinhart said. “Though volumes did not grow as planned, we made gains. We’ve completed the expansion at Norfolk International Terminals, our work to make Virginia home to the deepest port on the US East Coast is ahead of schedule, we’ve seen private investment on our terminals, and we are helping to develop an entirely new industry in Virginia, wind energy.”
Reinhart also pointed to the port’s expanding role in driving economic investment and job creation. In 2020, the port was instrumental in helping to generate more than 4,300 new jobs and the development of nearly 9.2 million square feet of space that had a total investment value of $1.5 billion.
“We are listening to our customers, cargo owners, and partners and are always looking for ways to improve how we move their cargo,” Reinhart said. “When we do this well, we build confidence with the ocean carriers and cargo owners, volumes expand and businesses grow. That growth equates to economic investment and new jobs for Virginia.”
December is the half-way mark in the fiscal year 2021 and thus far the TEU volume is 1,539,299 units, an increase of nearly 4 percent; gate volumes are up 2.3 percent; loaded imports, up 5 percent; and total barge volume is up 5.5 percent.
“We care about the cargo moving across our terminals and the goal is to build efficiencies across the operation so we can continue to deliver real benefits to all of our customers and cargo owners,” Reinhart said. “Some of the challenges of 2020 are going to carry-over into 2021, but we are up to the challenge and are looking forward to the new year.”
Some of the ports accomplishments in 2020 include:
The port and Ørsted, a European renewable energy company, reach an agreement for the company to lease a portion of the PMT. Ørsted will use the site to stage materials and equipment used in the development of large offshore wind turbines that generated electricity.
The negative effects of COVID-19 on world trade begin to show. The virus, combined with the residual impact of the trade tariffs, are the main drivers behind falling cargo volumes. The port sets-up an internal working group dedicated to developing contingency plans for the continuance of operations and begins looking at cost-savings measures.
The first import containers of COVID-19 test kits and protective gear for frontline medical personnel arrive and move rapidly through the port via the COVID-19 Critical Cargo Initiative. The effort identified critical imports moving across Virginia that were needed in the effort to fight the Coronavirus then allocates the equipment and personnel needed to move the cargo to its destination as fast as possible.
Cargo volumes fall nearly 39,000 TEUs in a single month, the result of an increasing number of blank sailings. The blank sailings are normally scheduled vessels that don’t make the voyage because there isn’t enough volume. The result is a loss of import cargo and exports that cannot make their way to foreign markets.
John F. Reinhart, the port’s leader of the last six-and-a-half years, announces that he will be retiring from his post as chief executive officer and executive director of the Virginia Port Authority, effective March 2021.
The final group of automated stacking cranes arrives at Norfolk International Terminals (NIT), successfully ending just over two years of constant deliveries of the machines that are the centerpieces of the terminal’s expansion. With all of the cranes in place and operational, the terminal will have the capacity to process an additional 400,000 units.
The port participates with the International Longshoremen’s Association and industry peers from Maine to Texas in an hour of reflection on the tragic death of George Floyd; during that hour all cargo operations cease.
The port closes fiscal year 2020 (July 1, 2019 – June 30, 2020) with TEU volumes off by more than 181,000 units. The decrease was attributable to the trade tariffs during the first half of the year and the ongoing impact on world trade of the COVID-19 virus through the year’s end. The port completed FY20 having handled 2.75 million TEUs, which is a volume decrease of 6.2 percent when compared with FY19.
Expanding barge operations that serve Richmond and Baltimore set a new, combined monthly mark for volume, having handled 6,076 containers in August.
The CMA CGM Brazil calls Virginia and in doing so becomes the largest containership to call The Port of Virginia or come to the U.S. East Coast. During her 24-hour stay in Virginia, multiple labor shifts handled nearly 3,300 containers of exports and imports (combined).
The Virginia Port Authority Board of Commissioners introduces Stephen A. Edwards as the next leader of The Port of Virginia. He arrives on Jan. 19 and will work with John Reinhart through the end of March to complete the transition. For the last seven years, Reinhart has led the VPA as its CEO and executive director. Edwards comes to the port with extensive experience in the global transportation industry.
The port receives a $20 million federal grant to reconfigure and double the size of the on-dock rail yard at NIT. The bulk of the work will focus on the construction of 10,700 feet of new track inside the terminal and give the terminal the capacity to process more than 700,000 rail lifts annually.
A new, all-time record for monthly TEU volume (twenty-foot equivalent unit) is set with the port having handled nearly 280,000 units, a number that surpasses the previous mark – set in October – by more than 5,600 units. November was the sixth consecutive month of month-over-month growth for the port.
The port welcomes a pair of massive container cranes to NIT, the final pieces of equipment needed to complete the $450 million, two-a-half-year-long renovation of the terminal’s South Berth. The largest of their kind in the United States, these cranes will be able to accommodate ultra-large container vessels, or ULCVs, that make regular stops in Virginia and even higher-volume ships of the future.
The port closes the most productive quarter in its history having handled more than 814,000 TEUs in October, November, and December (combined), growth of more than 13 percent when compared with the same quarter in 2019. The record volumes were processed without issue at the port’s two, newly expanded container terminals.