- CREATES A MONOPOLY DAMAGING THE COMPETITIVENESS OF THE PORT AND PORT-RELATED BUSINESSES – APM Terminals is a business unit of the foreign based A.P. Moller – Maersk Group. Other companies in this group will benefit at the expense of competing Port customers and service providers. Virginia businesses will close and jobs will be lost.
- Ocean Carrier Competition – The group also includes Maersk Line, currently the largest container shipping company in the world. Several competing ocean carriers have stated this arrangement would create a monopoly for Maersk in the Port of Virginia and be harmful to their ability to provide competitive rates and service. These current Port customers can be expected to reduce the amount of cargo they put through the Port of Virginia. Click to see letters submitted from steamship lines opposing this monopoly.
- Motor Carrier Competition – The motor carrier Bridge Terminal Transport (BTT) is also part of the Maersk family of companies and trucks a substantial portion of the Maersk containers to/from the Port of Virginia. While BTT may grow, other motor carriers that are not so closely aligned with Maersk can be expected to lose business. Click to see letter from Tidewater Motor Truck Association opposing this concession.
- Warehousing & Distribution Competition – DAMCO, also part of the Maersk family of companies, has substantial warehousing operations in Hampton Roads. Existing warehousing and distribution companies that compete with DAMCO will find themselves at a competitive disadvantage and the affiliation between DAMCO and Maersk will be a disincentive for other companies to expand or move into Virginia.
- Freight Forwarding & Logistics – DAMCO also has operations in Virginia providing customhouse brokerage, freight forwarding, and logistics services. In these areas they compete directly with a host of other Virginia companies that expect to find themselves at a competitive disadvantage. Click to see letter from the Custom Brokers International Freight Forwarders Association opposing this concession.
- APM’S PRIORITIES WILL NOT BE VIRGINIA’S PRIORITIES – APM Terminals and its affiliated companies have operations in all major U.S. ports. In 2012 Virginia may present the best business opportunities for the Maersk family of companies. However, no one can predict what changes will take place over the life of this 48-year concession and what opportunities APM & Maersk may see in maximizing their business at a competing port; while fulfilling only their minimum obligations to Virginia. The State should ensure Virginia’s state-owned terminals will always be operated to put Virginia’s interests first.
- ABUSE OF THE EXISTING PPTA PROCESS – WHY THE RUSH? – A review of the timeline and handling of this specific proposal indicates an effort to manipulate the PPTA process to limit the opportunity for the submission of competitive bids, limit opportunities for public input, cut out the General Assembly, and ensure the State’s acceptance of APM’s proposal.
- April 4 – APM Terminals submitted their proposal to the Virginia Secretary of Transportation, Sean T. Connaughton, under the Public-Private Transportation Act of 1995 (PPTA).
- May 22 – Over 45 days from receipt, but just two days after adjournment of the General Assembly from the Governor’s veto session, the Virginia Port Authority Board of Commissioners were informed of the proposal.
- May 23 – The office of the Secretary of Transportation issued a press release making the proposal known to the public. The same press release was used to fulfill two requirements under the PPTA; which received lesser attention. It (1) included a necessary request for alternative proposals, and (2) provided the State’s point of contact for accepting public comments about the proposal.
- July 12 – The original deadline set by the State by which other interested parties must submit alternative proposals. At fewer than 50 days since the public announcement, this deadline for alternative proposals is woefully inadequate and likely discouraged serious proposals. This is the most valuable project ever to be considered under the State’s PPTA process yet it has the shortest timeframe for the submission of alternative proposals.
- August 13 – Extended deadline for the submission of alternative proposals. The Secretary of Transportation waited until July 11 to extend the deadline; offering a mere 30 days of additional time.
- August 31 – The Secretary of Transportation may enter into negotiations with APM and any private entity that submitted an accepted alternate proposal. As a result of an amendment to the PPTA during the 2012 General Assembly session the Secretary of Transportation now has sole discretion in deciding whether to enter into an agreement at the conclusion of negotiations.
- January 1 – Date APM Terminals has proposed to assume the operations of the state-owned facilities.
Given these concerns, operations at Virginia’s port facilities should continue under the existing operating model until it can be demonstrated to the owners of those facilities, the citizens of Virginia, through a transparent public process, that a change is in the best long-term interest of the Commonwealth.
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