The port of Baltimore. Photo credit: Baltimore Sun.
It often makes interesting reading to see our problems through the eyes of others. In this instance, it is illuminating to read an analysis of the Port of Virginia’s woes from the perspective of the Baltimore Sun. After years of playing second fiddle to its chief Mid-Atlantic rival in Norfolk, the Port of Baltimore is rebounding very nicely from the recession.
What Baltimore did that Hampton Roads did not is diversify. Finding itself at a competitive disadvantage competing against Virginia for the container market — Virginia handles three times as many containers — the port began to pursue autos, agricultural and construction machines and niche cargoes in the 1990s. The strategy worked. Baltimore’s industrial segments are enjoying strong exports in the economic recovery.
There’s a lesson here for the Ports of Virginia, although I doubt its one that the newly reconstituted board appointed by Gov. Bob McDonnell is likely to heed. Maybe it’s time to re-think the port’s strategy, which heretofore has focused on handling container imports and, even now, anticipates a shift in traffic to bigger, post Panamax-class vessels when the widening of the Panama Canal is complete.
One problem with that strategy is that Norfolk ports face a major constraint to import-led growth: the transportation bottleneck for container traffic. A continued rise in the number of trucks will overwhelm the region’s transportation connections. That’s why Gov. Bob McDonnell proposes to invest hundreds of millions of state dollars in a public-private partnership that will build an Interstate-grade highway between Petersburg and Suffolk.
The underlying assumption of Virginia’s strategy is this: Container traffic from Hampton Roads will continue to grow, and it is the obligation of the state to accommodate that growth by adding highway capacity — even if the project is not economically self supporting through tolls and other revenue sources. (As it happens, Norfolk’s maritime industry prefers the Third Crossing, which would tie into Interstate 64 on the Peninsula, but the underlying assumption that the state should pony up big bucks is the same.)
But what if… But what if the Ports of Virginia pursued a different strategy? What if, instead of seeking more containerized imports, it began capturing more exports — just like Baltimore started to do more than a decade ago? That wouldn’t strain capacity very much, if at all. Instead of dead-heading into Norfolk and Portsmouth to pick up cargo, trucks could carry containers full of export goods on the trip, utilizing transportation infrastructure we already have.
Admittedly, new export business is not likely to materialize overnight. It might take a decade or more of work. But economic mega-trends might be with us. I find it just as plausible to believe that the U.S. will experience an export boom in the future as to count on 10 or 20 years of continued import growth in the face of continued consumer over-indebtedness and frugality.
Maybe the idea is full of holes. I’m just trying to think outside the box. But I’d like to see more people asking questions instead of automatically accepting hoary assumptions that may have run their course.
— JAB
