Making NIT More Productive, More Resilient

NIT

Norfolk International Terminal (NIT)

by James A. Bacon

For the millions of Virginians living above the fall line, the struggle that Hampton Roads has with rising sea levels and increasing flooding may seem remote and far away. Why should we care? After all, does anybody in Hampton Roads give a hoot about our problems?

Kit Chope, vice president of sustainability for the Virginia Port Authority, gave a pretty darn good reason this morning for why Virginians across the Commonwealth should take an interest in the region’s increasing vulnerability to storm surges and flooding: Anything that disrupts port operations disrupts the economy of the state. Some 530,000 jobs and 10% of the state’s gross domestic product are tied to port activities, he said.

“What affects the port affects the state,” said Chope in a panel discussion of the 2016 Resilient Virginia Conference, during which a major theme was the long-term threat that sea level rise and flooding poses to Hampton Roads.

Upstream Virginia has gotten the message. Included in the $2 billion bond package approved by the General Assembly in the 2016 session is $350 million to upgrade cargo-handling cranes at Norfolk International Terminal (NIT). The capital investment has been billed primarily as a response to growing cargo traffic and the need to expand capacity. But there’s more to it than that, said Chope. Modernization also will provide more protection from hurricane storm surges that could inundate the facility and knock it out of operation.

The Port of New York and New Jersey, the third largest port in the country, got a taste of what could go wrong during superstorm Sandy. A nine-foot storm surge inundated the portsm washing hazmat materials and other debris into the water channels and rendering electrical power unreliable. Flooded terminals closed for a week, leading to the diversion of 25,000 shipping containers and 58 vessels (some to Hampton Roads). Another 15,000 containers were lost, along with 9,000 automobiles and 4,500 trucks and vehicles.

The ports of Virginia, the nation’s fifth largest port complex, are determined to avoid a similar capacity, Chope said.

Thanks to the bond package, new electricity-powered, rail-mounted gantries will replace the existing diesel-powered straddle cranes. The investment will make possible a 50% increase in the number of containers to be loaded and unloaded. Getting less attention is the fact that the Virginia Port Authority is studying how to protect the terminal from disruption. “Where are we most at risk? Where are our critical nodes? What are the potential points of failure?”

For example, electric vaults at ground level will be elevated above projected storm surge levels. Buildings will be hardened to protect IT systems used to track cargo and communicate with shippers. “Data is king,” Chope said. It must be protected.

The VPA’s resilience efforts have been internally focused mostly, but the port relies upon utilities, especially electricity, and is inextricably tied to the network of railroads, highways and local roads that link the terminals to major markets. If local roads flood, as they are prone to do in the City of Norfolk, that could hinder trucks driving in and out with containers. Everything is interconnected. “What’s good for the city is good for the port,” he said. “What’s good for the port is good for the state.”

There are currently no comments highlighted.

8 responses to “Making NIT More Productive, More Resilient

  1. re: ” Economic development subsidies benefit specific businesses and institutions.

    Can you see the difference, Larry?”

    well… geeze… Jim..

    must be the color of the Ox , eh?

    so if you’re ALREADY getting subsidies… that’s DIFFERENT than if you are a start-up?

    😉

  2. ” Upstream Virginia has gotten the message. Included in the $2 billion bond package approved by the General Assembly in the 2016 session is $350 million to upgrade cargo-handling cranes at Norfolk International Terminal. The capital investment has been billed primarily as a response to growing cargo traffic and the need to expand capacity.
    …..
    Thanks to the bond package, new electricity-powered, rail-mounted gantries will replace the existing diesel-powered straddle cranes. ”

    is this an investment or a subsidy?

    • It’s an investment. It’s also a subsidy because VPA benefits from tax-free municipal bond financing that private ports do not.

      Is the subsidy justified? In an ideal world, ports wouldn’t have access to subsidized capital. But the reality is, every major port in the U.S. is publicly owned and has access to subsidized capital. So, what’s Virginia to do? Let its multibillion-dollar economic driver go down the tubes because it can’t compete with the cheap capital made available to its competitors? Or play by the same rules?

      I don’t like the rules. But the McAuliffe administration has no interest in privatizing the ports. If so, it has to pony up the resources to allow Virginia’s ports to compete.

      • Jim, I don’t know what goes on in RoVA, but here in Fairfax County, lots of private development bonds are sold by the Fairfax County Economic Development Authority because they carry lower interest rates than private bonds – albeit higher than moral obligation or general obligation bonds.

  3. re: ” I don’t like the rules. But the McAuliffe administration has no interest in privatizing the ports. If so, it has to pony up the resources to allow Virginia’s ports to compete.”

    is that something different and unique to McAuliffe or is it pro-forma for most Gov in Virginia and the General Assembly itself?

    Did Governors prior to McAuliffe want to privatize the ports?

    What ‘s the difference between the General Assembly’s support of the Ports and their support/subsidization of Innova and Carrilon?

    I’m trying to understand if this a general standard view of these things or is it arbitrary ?

    what justifies State support and what does not?

    • McDonnell toyed with the idea of privatizing the ports. I don’t think McAuliffe ever took the idea seriously.

      The difference from Inova/Carilion…. The state made the decision that it is in the public interest for the state to own the ports; therefore, it is obligated to provide the financing they need to compete. The state does not own Inova or Carilion.

  4. Is the Virginia Port Authority a private company or a public asset? Can I buy a share of stock in the VPA and profit from the state’s investment? Or is the VPA just another transportation provider, like VDOT, that takes tax dollars and user fees and builds and operates infrastructure that benefits the common good. I don’t see providing cap ex for the port authority as any different than providing cap ex for a bridge or an interstate widening or a new runway at a public airport. Now, I personally own a car not a freighter, but I still directly benefit from that port.

    Spending on the public ports very different than providing tax dollars or a tax discount for a totally private business. There are also arguments in favor of doing that at times, but don’t conflate them.

Leave a Reply