Dear Chairman Fralin and Esteemed Board Members,
I write as a private citizen and business leader in Virginia’s maritime community to urge you to look favorably at continuing port operations under a restructured Virginia International Terminals, as opposed to negotiating an agreement with the other private bidders.
Rather than stating the obvious facts and figures of which I’m certain you are already aware, I would like to support my position by asking you to consider the possible ramifications of having our ports controlled by a party with conflicting interests, vis-à-vis operations, in other, nearby ports.
Both APM and MAHER operate terminals in competing ports. When and if they should gain control over the ports of Virginia, our ports immediately become a pawn in their pricing negotiations. Good business sense and most corporate Mission Statements dictate that increasing shareholder value is at every corporation’s core. Contrast that to VIT who follows your very own (VPA) mission to “foster and stimulate commerce…spurring growth in job creation, tax revenue and corporate investment across the Commonwealth”.
My concern is that rather than having an operator whose mission is to benefit the Commonwealth at large as stated above, we risk having an operator who will instead consider conditions at their other facilities (critical mass, operating expenses, efficiencies, labor agreements, relationships with ocean, rail and inter-modal carriers, etc.) while negotiating contracts that will ultimately benefit their own global strategy and bottom line. In fact, it’s quite possible that the benefit to the ports and Commonwealth may not be considered at all. These tactics could very well lead to final pricing that will render the Ports of Virginia as “uncompetitive”, while increasing the operator’s profit as they drive down costs elsewhere. This is a risk that would not exist under continued VIT control.
I thank you for taking the time to consider my position and hope that the unparalleled past and current successes of VIT play a significant role in your decision making process.
Vincent Di Costanzo
Vinny Di Costanzo
As a private citizen engaged in the maritime industry, I write in strong support of the VMA position claiming that comments coming from the Administration are damaging our port’s reputation and perhaps it’s ability to do business.
While the port issue is indeed politically charged, from a business standpoint, I feel that the Commonwealth’s administration has either ignored or abandoned all common sense.
When a corporation faces challenges regarding the performance and/or profitability of a division or subsidiary, corrective actions should not be driven by unsolicited offers from competitors with conflicting goals and missions. Instead, actions and decisions should be taken proactively, and requests for proposals or quotations should be brought to market under terms and conditions that are fully under the corporation’s control.
And under no circumstances should there be mudslinging and questioning of business models over which they have had ownership and responsibility for decades. What purpose does that serve other than to weaken their own position?
In this instance, the 10-year carrier contracts that were so brilliantly negotiated by VIT and which lead to APM’s decision to surrender operational control of the most expensive and technologically advanced terminal in the US, are nearing their term. To have our administration publish such derogatory and perhaps baseless facts about their own operation, certainly jeopardizes the upcoming and ongoing negotiations for renewal, and denigrates the hard work and strategic thinking that put our ports in this position in the first place.
I trust this will be considered when publically commenting on this process in the future.
Vinny Di Costanzo
Carl Harris, Private Citizen
Let’s have a state-wide referendum with our VA. Citizens to see how many will NOT support the proposed selling of our ports to a foreign country. Have our “responsible” leaders “gone nuts?” Privatization of our ports cannot be allowed to happen!
Peter Forti, Port Bunker Services
It is an extremely bad idea to privatize the port for many obvious reasons. Once a single entity takes over, it becomes ripe for being a controlling monopoly complete with corruptness and will find ways to divert tax dollars away from the state. It also will impact all local small marine businesses such as ship agents, fuel suppliers, ship chandlers, repair facilities etc… as the controlling company will set up their own IN HOUSE companies to handle it all thus eliminating these behind the scene jobs/companies that presently support the current maritime industry. A private takeover has not proved successful in other ports, why should it work here? It wont. We need to prevent this from occurring for the long term preservation of the PORT OF VIRGINIA and the local companies that support it.
Mike Abbot, Private Citizen
Turning over control of our port to A.P. Moller/APMT would be like turning full operational control of Dulles Intl Airport over to Lufthansa. Turning the port over to RREEF/Maher would be like turning control of Tacoma, WA over to the Port of Seattle.
I shouldn’t have said that, they’ll probably try that next….
Russell Spangler, Cummins Atlantic
It is very disheartening to learn that we (Va.) can sell an asset to a foreign company without through public comment. There is no dire need to sell, and once sold there is no way to put escalators in for future increases in value. The ports in Virginia hold a very real competitive advantage over Savannah, Charleston, Wilmington and other East Coast ports. Va. can leverage these advantages for future increased business that would benefit the Commonwealth in a much greater amount than any short term gain at the expense of future revenues. Do we have to sell everything that is American? Can’t we at least keep the port that has “been in the family ” since 1609?
It reminds me of the debate over cutting 350 year old oak trees at Va. Tech for a parking lot. Are you kidding? The same type of pride of ownership for the port should preclude any sale of this port!
Donald Allen, Steer Co.
What’s the hurry? Even if the state decides to sell, you always sell when your numbers are at a peak not at the lowest point in years.
Why do you think there are so many suitors? Selling your assets to make a quick buck will not hide the lack of good decision making in Richmond.
Frank Papcin, Private Citizen
I wish it would make a difference if our governor knew how much damage he;s doing here in tidewater with his constant giveaway of Virginia’s resources,and the tolls he imposed on us ,not only as a toll but to slap the faces of Americans by giving 13 percent profit to some foreign country and now he’s trying to do the same to our ports?–shame on you governor.–I’ll be real glad when you are gone for good.
Lynn Bell, Private Citizen
I hope this decision about changing the operator for the port is more well thought out by the transportation authorities then the debacle I was stuck in for 6 1/2 hours traveling from Richmond to Va Beach where they closed 2 of the 3 main arteries to the South Side.
Len Engstrom, Retired Admiralty Lawyer
Whatever is done with our wonderful port should be done carefully and thoughtfully with ample time for input from all interested parties. The decision making should not be in the hands of a few!
Jacob Barrett, College Student
I want to have a career in the maritime industry here in VA. Why are you trying to fix something that isn’t broke?
I agree with the coalition’s goals and that more time is needed for cosideration of the proposals. This important decision should not be made solely by the Secretary of Transportation. U.S ports should be managed by the U.S!
Tim King, Private Citizen
Public needs more information!
Judy Barrett, Townebank
The port is a major employer of Virginians and needs to support Virginians! One of my many concerns about these proposals is money that is made here will go overseas.
Garland and Jean Hagen, Private Citizen
Turning over the port operations to a foreign shipping company without a long and comprehensive analysis of ALL issues and the impact on ALL constiuents will give our Republican govenor a real black eye. This seems to be a “railroaded” effort with perhaps a hidden agenda.
Conceptually, the idea if turning over the port to an operator who could not make thier own terminals operate according to their plan puts all the numbers being given suspect. Why does anyone feel APM can run our state’s port when they could not make their own work, and turned their terminal to VIT. Interesting they thought VIT could run their terminal better than they could, yet now they are trying to convince us they can do a better job. THIS DOES NOT COMPUTE!!.
Our port is too much a powerful economic growth engine to rely on a foreign company that also runs competiting ports to have Virginia’s best interest at heart.
We MUST, at a minimum, slow down this timeframe to allow more time for a thorough analysis.
Equally important, we MUST transfer this decision to a legislative committe as oppossed to having the decision the responsibility of a sole individual who IS NOT an elected representative. This is not a decision the should be made soley by the state secreatary of transportation.
We recommend that this project be put on HOLD until a better process for consideration and decision-making can be developed.
WHAT’S the RUSH??
George Williams, Private Citizen
From our 3rd floor Condo, we have a front row seat to the container and cargo shops traffic activity on Chesapeake Bay. Don’t undersell the Port Authority as a big participant to our local economy. Don’t reverse outsource a function that will be paid for by what would have been our profits.
Roy Lochner, Pres. RVR&A
This is an important decision affecting many Virginia businesses and citizens–so please slow down the rush to decision, to allow public and corporate input via public hearings.
I see many ways that short term gains may turnout to be long term business losses, when a vital Virginia asset is to turned over to foreign
for profit firm that competes with Virginia businesses.
Please allow more Time for local companies to apply. Support our people here locally
Adriana Ramirez, Shipping Industry
Would kindly request your consideration towards a fair frame time at which interested groups can submit their proposal and interest. You will perhaps find good/better opportunities for the residents of Virginia.
Ed Kroft, Private Citizen
Any decision to transfer ownership of the Port of Virginia, for short-term gains and profits, goes against the political promises and tenents, of business growth and sustainability for businesses here in the Commonwealth, and detracts from long-term viability for the region, and American proprietorship.
Looking for a quick gain for the accounting ledgers, without making the process accountable to the public-at-large, undermines the trust and responsibilities given to our elected officials, which only continues the cycle of lack of confidence and faith in those very same officials who are supposed to have “our” interests, as citizens of the Commonwealth, as their primary goal, not those of some far off stockholders. Anything less does Virginia a great disservice!
Ron Porter, Private Citizen
Keep it under US control to save jobs here in Virginia, PLEASE!
William Allen, Local 1970
Maersk is not good for our ports. Keep them away. Im sure in the long run they will take jobs away….DO WE WANT THAT…BE SMART
Gerard Coyle, Evans Delivery Company
I believe that the process with regard to the consideration of privatization of the Virginia Port Authority terminals should be an open and transparent process and should be given sufficient time and consideration of all of the relevant factors in such a significant decision.
Keith Walborn, Cumberland Keuka Co
Simple enough reason to reject. It creates an uneven playing field for all others not flying Moller/maersk flag.
Tim McGrath, Private Citizen
Foreign company? What are we thinking?
Linda Eastland, CMA CGM America, Inc.
I am deeply concerned what the impact will be to the elimination of competition at the Va Ports. While I think privatization is a good idea, centralization under one company could have devastating effects to the businesses operating with and/or through our terminals.
Please note my views are my opinion only and do not necessarily reflect those of CMA CGM.
As a concerned citizen of the commonwealth I believe our best long-term interests must take precedence over anything else. I would hope that our representatives will slow things down long enough to allow the general session to commence and for all the stake holders to have an opportunity to gather all the facts and have an open debate on what is best for the commonwealth. If any deal is pushed through without this something has gone gravely wrong. There is too much at stake and 48 years is a long time.
As a taxpayer, I am in hopes that an objective look at the proposed privitazition of the port of Hampton Roads will prove to lawmakers once and for all that privitization will benefit A.P. Modeler, and it’ s subsidiary Maresk Lines, far more than the Commonwealth of Virginia in the long run. I mention only APM here as it’s obvious that they have the inside track in the negotiations. Having spent thirty- five years in ocean transportation, all in Norfolk, I cannot help but feel any agreement turning the running of our port over to APM will be heavily weighted in their favor or APM Would not enter into it. Please take a long hard look at the APM proposal and put the public good ahead of politics.
Bud Shipp, JAZ Enterprise
We cant let Maersk get in here.
Nothing good can come of it. Go work for them, you shall see. I am a longshoreman and work around this on a daily basis. I am worried about this transaction, for it will effect us many years to come.
APMT’s assurance that current Ocean Carrier contracts will be honored if they gain the port operating concession seems to remove a major objection to their bid, but it actually points up how dangerous the shift to privatization may be. As background, all major carriers have a throughput rate contract that specifies terminal services that will be performed for the flat throughput rate, such as gate transactions, a move in or out of the stack, etc.
The items that aren’t covered, and therefore will not be protected by APMT’s guarantee to assume the current contracts, will be subject to negotiation and that should concern all carriers, shippers and consignees. Let’s examine two of those cost components:
1. The off-dock yards set up by VIT to handle empty containers are operated at no cost to the lines – gates, lifts and dispatch are all performed at no additional charge. This is a port-wide policy and is not mentioned in contracts. VIT does this for several reasons – to alleviate congestion on the terminals and also to avoid penalizing ocean carriers for an import trade imbalance. I don’t see APMT continuing the practice of operating the empty yards at a loss, especially if they have locked themselves into the current throughput rates. It should be noted that when APMT opened their new terminal and tried to compete for business, the throughput rates they offered were in no way competitive with VIT’s. They can hardly be expected to subsidize the empty yards just because they enhance the overall appeal and efficiency of the port.
2. Tackle stevedoring is also in danger of changing, and not in the carrier’s favor. Like ports to the south of Hampton Roads, VIT operates as a “point of rest” terminal, meaning that the terminal’s responsibility begins or ends at a point of rest on the terminal. It is up to the ocean carriers to contract with a stevedoring company to move containers to/from the ship. Hampton Roads has two excellent stevedoring companies that are very competitive with each other and with stevedores in competing ports. APMT’s Portsmouth terminal is designed for APMT to perform all stevedoring fuctions. Since those functions are not included in throughput rates, APMT could a) mandate that no third-party stevedores will be allowed to work vessels at Virginia terminals and b) be free to set rates as high as the market will bear. I know from experience that APMT’s container stevedoring rate during the pre-VIT lease days was higher than either of the two local competitors; “pick” rates at APMT decreased
when VIT leased the facility and outside stevedores were permitted to operate there.
Neither Ceres nor CP&O can continue as they do today if they have no access to the VPA-owned terminals. The “point of rest” model works very well in the Mid and South Atlantic; vessel productivity is markedly higher from Virginia on south than it is from Baltimore north to New York and Boston.
This is just one example of how a savvy operator like APMT can appear to be conciliatory and still have the ability to jack up rates once they (or any for-profit company) gain a monopoly.
Here’s something else to think about. Another bid to operate the ports has been received from Deutsche Bank’s RREEF unit. RREEF owns Maher Terminals, which operates the largest terminal in New York/New Jersey, and Prince Rupert in British Columbia. RREEF has been for sale for some time. A.P. Moller can easily buy RREEF. If RREEF’s bid is successful you can figure out what could happen next – APM buys RREEF and winds up with Hampton Roads, most of New York and all of the Canadian gateway that Maersk has been desperate to get into since it opened. Food for thought.
Fred Weppner, GlobeRunners, Inc.
I fail to see how one carrier having that much influence over all terminals in the Norfolk area could be a good idea for anyone but Maersk. No amount of revenue to the state of Virginia is worth it. I doubt if the average Virginian even realizes so much power lies in the hands of their governor. This is something that should be addressed by their legislature
General Manager, Norfolk Office
John S. Connor, Inc.
The Commonwealth boasts and $311 million revenue surplus….
And still they want to privatize for more money.
And charge tolls for our road and tunnels….! Close schools and/or programs for our children..
See: Budget Surplus
We appreciate your business!
We need to know more about why the Sec. of Transportation is so interested in this change. Does he any vested interest? Board positions?
Do not allow this to be shoved on VA.
In my opinion it is crazy that Virginia is even thinking about selling or leasing out the Port of Virginia. But to turn the operations over to a private company whose owner also owns a major steamship line is absurd. As a former member of a steamship company I would balk at such a move and seriously consider leaving the Port of Virginia for other viable options, of which there are many. How can the Commonwealth allow such a thing? At the end of the day turning control over all it’s ports to one company, who is also a major competitor of all the other lines that call the port, is beyond absurd. This port will lose a substantial part of their current business. I guess on the plus side, Baltimore and Charleston and Savannah and New York ports will be happy.
It would seem that the powers that be want to sell off our port operations, possibly to a foreign company. Profits would leave the Commonwealth and potentially set up a monopoly for the shipping company that is poised to get the lease. Please keep this valuable asset from being hastily sold off to the highest bidder.
Paige Thornton, John S. Connor, Inc.
John S. Connor, Inc opened their office in Norfolk, Virginia in 1987. We support keeping the Port of Virginia both competitive and sustainable in the future. It is utterly important for our leaders in The Commonwealth to understand the importance of our trade and the involvement of not only the forwarders and brokers, but the international carriers (steamship lines), agents and customers that we work with on a daily basis.
Paige Thornton, General Manager
Larry Ewan, Continental Terminals, Inc and 38 year member of the USN and Port of VA community
It is incredulous that the elected government of the State of VA, after having secured exclusive use of the APM terminal, locked nearly all the SSLs to 20 year contracts to call at VIT terminals and unifying the efforts of the ILA and Management to sustain the development and growth that the government leaders in VA would give their precious monopoly to a foreign entity. Isn’t that why the Bayone/NJ proposal was squashed. Foreign entities should NOT operate our ports. If we can not operate them we can not be eternally vigilant. Eternal vigilance IS the price of Security. I will not sit still and watch this take place. Governor McDonnell do not allow this. It will limit Virginians ability to compete in a fair market and degrade our Port Security. Please do not UNDO what your Port Community has SUCCESSFULLY DEVELOPED in the last 30 years.
Our ports have been the backbone of the Virginia economy for centuries. Please consider preserving our heritage and our future as over-riding the needs of foreign competitors. Don’t sell us out.
George Garris, Fred P. Gaskell Co., Inc.
Because I have worked in this Port for more than 40 years, with experience as President of Old Dominion Stevedoring, President of Fred P. Gaskell Co., Inc. Freight Forwarders and Customs Brokers, President of the Hampton Roads Maritime Association (later named the Virginia Maritime Association), Chairman of the Hampton Roads Shipping Association, and a CONASA negotiator, I am convinced that the unique manner in which this Port is managed is the key to the phenomenal growth this Port and the Commonwealth of Virginia have enjoyed. During many visits to Richmond with the Virginia Maritime Association on Port Day, I have often heard our political leaders say that the Port is one of the three most important economic engines that drive the economy of the Commonwealth; my long experience in the Port causes me to agree with their assessment. At this particular moment the international economic crisis is affecting all industries, including our Port, and states like our own are
anxious to find new ways to balance budgets. It is at this precise moment that APM has stepped forward, offering huge financial incentives to entice our political leaders into a contract that would make APM the exclusive operator of all of the major State-owned Terminals in our Port for 48 years.
APM was wise to step forward at this time. Its proposal is certainly tempting, but APM is not the White Knight coming to our rescue. APM is in business to make money and knows it will do very well if it is awarded this contract. The Port is on the verge of an explosion in cargo volume that APM wants to handle. With the imminent opening of the expanded Panama Canal, our Port will be the first one on the East Coast ready to handle the larger container ships that will sail through the new canal. Other carriers have already announced changes to their sailing schedules so they can take advantage of the economic benefits of our Port, the Port of Virginia. With APM running the Port, this surge in Port revenue will primarily benefit APM. The economic engine that has driven the economy of the Commonwealth of Virginia for decades will sputter. The reaction throughout the Maritime Industry has been swift and direct: it opposes the APM proposal. Several carriers have stated they will divert
their ships to other ports if APM is awarded this contract: I don’t have to tell you what happens to this economic engine if carriers start diverting their ships.
My copy of the Maritime Bulletin for July 2012 just arrived in the mail. The Port has already started its recovery: cargo volumes for containers this past June were the highest ever for June, and year-to-date totals are 5.4% higher than last year. In a study just released by the staff of the Federal Highway Administration, the Port of Virginia moved substantially more port-related cargo in 2010 than did the ports of Charleston or Savannah. Because the fair and independent way in which the Virginia Port Authority operates has contributed to its prominence and success, because the Port has just begun to recover, and because the Port stands to grow quickly once the expanded Panama Canal opens, I cannot imagine any scenario in which it would be wise to enter into a contract with APM for the exclusive operation of the primary State-owned Terminals in the Port. Instead, I am convinced that this would be absolutely the worst thing to do for the Port and the Commonwealth, and I would like
to go on record as being opposed to any attempts to privatize the operation of the Port of Virginia.
Marilynn Ryan, Century Express
I am convinced that allowing APMT to operate the Port of Virginia would be a mistake. Instead of maximizing the profit potential that would benefit the Hampton Roads communities and the entire state of Virginia, this act would funnel that profit to a private overseas organization. What is so shocking is that a decision of this importance is actually in the hands of so few people. We would ask that Governor McDonnell and Secretary of Transportation Sean Connaughton be brave enough to put aside their political aspirations and consider the long time welfare of the state that they serve.
Jerry McPeeks, Five Star Transport, INC
AP Moller has way to much power in the shipping business now that any of its competitors would be at an unfair disadvantage competing in the shipping business against them in shipping and trucking or any of their other business’s.
Lisa Turner, L&M Express, Inc. DBA Railport Services
This would be a MAJOR mistake!
Michael Monell, VIT
Virginia beware of what you give away if you can’t get it back. Remember these ports bring in constant revenue for the State of Virginia. Don’t let temporary elected officials sell something that concerns all the citizens of Virginia. Virginia did this with Blue Cross Blue Shield.
As a member of the Hampton Roads maritime community I find it troubling that this entire APM affair happened so quickly and even more troubling that it appears that this administration is visibly trying to fast- track their desired result without adequate due diligence. The fact that APM would have a virtual monopoly of our ports is of course another matter. Why the rush?
Cheryl Barrett, Service Transfer, Inc.
I have been a member of the trucking community for over thirty years in Hampton Roads. Over the years there have been many changes and I have always been proud to be associated with the VPA/VIT. One change that would be devastating is to allow APM Terminals to operate our ports. The relationships between the Virginia Port Authority and the steamship lines, ILA, stevedores, shippers, brokers, freight forwarders, trucking companies, railroads and countless other organizations were not built overnight. The VPA/VIT have a proven track record when it comes to operating our ports. The last few years have taken a toll on all of us financially but now it looks like business is rebounding but with the impending tolls and the prospect of APM taking over operation of Virginia’s Ports could be devastating. I am upset that the Governor and Secretary of Transportation would even consider leasing Virginia’s Ports to APM and for 48 years!!
Frank Borum, DD Jones Transfer & Warehouse Company, Inc.
I am opposed to the proposed APT monopoly for the following reasons:
1) Commercial Monopoly: We watched Bobby Bray and Joe Dorto company pull together the disparate operations of NIT, PMT and NNMT in the 70′s. We encouraged a public entity to create a monopoly in part because of the assumption that the public would have some continued influence over how that monopoly acted. We would never have permitted a purely commercial entity to create a monopoly then. Why would we open ourselves to commercial monopoly abuses now?
2) Potential for abuse in related business: Maersk Terminals has so many related arms that can benefit from the ocean terminal monopoly. The APT parent company owns the world’s largest ocean carrier (Maersk lines), distribution companies (Damco, Hudd) and related trucking companies (BBT).They will have the power and profit incentive to extend the use of their monopoly power on container piers to multiple waterfront related industries to benefit related subsidiaries.
3) Timing: We all know the Panama Canal will be able to accommodate mega ships in 2014. We all know that Virginia is the only port on the East Coast that can accommodate those ships. ( OK so NY/NJ has one that has limited rail connections). None of us knows what the Panama Canal expansion means for Hampton Roads market share for Asian cargo. It is an unknown that can only be a positive for us relative to other ports. Would you want to sell property you own near a future interstate exit based on current cash flow? That is what APT wants us to do and it seems pretty foolish. What is the rush?
3) The decision maker: The Secretary of Transportation has led the charge for a number of area projects. I sympathize with the administration that needs to build roads with no new revenue but the Portsmouth tunnel deal was woeful. The Secretary who turned a state project that could be funded with a 4% bond yield into a “partnership” that will cost 13% for decades should have some explaining to do. On the first vital decision he had to make for this region, Mr. Connaughton is 0 for 1. I would prefer to see others who have demonstrated that they have our area at heart make the call.
Shirley G. Roebuck, Gilco Properties Inc.
As a member of the Trucking community of this port for the last thirty six years, I find it hard to believe Our Governor would even consider an offer to replace the current successful operators of this port. I have watched the growth over the years and the communication it has taken for this management to bring together a team to work on improvements and problem solving for all aspects of the maritime industry. I am proud to serve on the Board of the Intermodal Conference of the American Trucking Association. I travel all over the United States and I am told by my counterparts from the other ports, they would be delighted to be a part of a port that works together. You definitely have that here in the Port of Virginia.We survived the depression better than those south of us. We never lost the volume of freight they lost. We came back very quickly, with the help of Competent VIT Business leaders and Sales. Why would we even consider fixing something that is not broken and the fact that the majority of the users of the Port feel this change in management will put us in a noncompetitive position. The lines and customers of the port are adamant about leaving if we have a change in the current way we do business. The addition of the Tolls and the possibility of a Monopoly here will ultimately made our large customer base seek a better port. The state needs to take a close and long look at this proposal and get all input possible, prior to making any decision.
THIS IS A HORRIBLE IDEA. 4 BILLION OVER 48 YEARS? A FOREIGN COMPANY CONTROLLING THE PORT? SHIP LINES LEAVING TO GO TO OTHER PORTS BECAUSE OF THE MONOPOLY OF AP MOLLER? COME ON GOVERNOR MCDONNELL. GET A CLUE. THIS DEAL IS NOT IN THE BEST INTEREST OF ANYONE BUT JOE DORTO AND AP MOLLER. DON’T LET THIS BONEHEAD MOVE RUIN YOUR REPUTATION AGAIN LIKE THE TRANS VAGINAL ULTRASOUND SCANDAL DID.
Valerie Sutton, John A Steer Company
I am greatly opposed to APM’s 48-year bid to operate the ports of Virginia. They couldn’t operate their own terminal in Portsmouth, so turned the operations over to VIT within a year of it becoming operational. Why then should we be led to believe they can operate all our ports? Seems the legislators only see the revenue in the tax dollars that APM would pay. However, if all the other lines pull out of the state to call MD, NC or SC because of this conflict of interest, I fail to see the benefit, since we’ll have to relocate to those areas to remain employed in our fields. Not only does that affect us maritime folks, but the businesses we support will suffer as well. Our grocers, our banks, our gas stations, our salons, our restaurants….Where will they be, if we cannot afford to spend money in their establishments or if we move altogether to seek employment elsewhere? I look forward to the public hearing regarding this subject. Is anyone, besides APM & the Governor in favor of this because I haven’t been made privy to that information. All comments made in the letter from the CBIFFA of Va are my viewpoints exactly, so please refer to that for further information. Thank you.
Vinny Di Costanzo
It is imperative that the Governor and/or Secretary of Transportation carefully consider the Business Plan of any suitor vying for control of the Ports of Virginia. Specifically, careful attention should be paid to the plan’s Value Proposition and whom the suitor names or considers as Valued Partners. Speaking to the current proposal by APM, I don’t believe that any Value Proposition can possibly be realized since it seems that a majority of the Valued Parnters (carriers and other port customers) see their taking control as a conflict of interest and of great detriment to our port’s future.
I hope that all steps necessary to ensure a fair and just process will be considered and taken.
Mike V. Abbott
As a maritime professional for more than 32 years, a citizen of the City of Portsmouth, and a native Virginian, I have grave concerns over the APM Terminals proposal to acquire the operating concession for the VPA port complex at Hampton Roads.
As a maritime professional I am aware that placing operational control of a port’s entire general cargo infrastructure in the hands of a single private foreign-controlled entity is globally unprecedented. Granting a 48 year concession for all of our port assets to a company with strong ties to the world’s largest container carrier will mean that every other ocean carrier will view Virginia ports with suspicion. Maersk Line represents roughly 55-65% of APM Terminals’ global book of business. Every potential customer will come to Virginia knowing that APM will cater first to the carrier that controls the lion’s share of their global revenue. The fact that Maersk and APM are sister companies under the A. P. Moller umbrella isn’t the issue; the issue is the extent to which Maersk’s sheer volume controls APM’s destiny and, ultimately, their decisions as to cranes, berths, productivity, etc.
Some observers may take this to mean that APM can somehow convince Maersk Line to route more cargo via Virginia ports. That’s not how it works. If using Virginia ports is in Maersk’s best interest, they will move cargo over them no matter who the operator is. In 32 years on the waterfront I can’t recall a single incident of a carrier selecting one gateway port over another based on who the terminal operator was. This could change if APM gains control over Virginia ports, but not to our benefit – they will use the Virginia port complex as a lever to entice business away from competitors in New York, Los Angeles, Puget Sound, Houston, etc. to the APM Terminals facilities in those ports and in ports around the world. The conversation will go something like “well, if you want a better deal in Virginia we can talk, but only if your business in the port of (fill in the blank) can be part of the equation”. APM has many irons in many fires; VIT’s only allegiance is to Virginia.
I am curious to know how APMT, a for-profit company, expects to pay some taxes (just not all the ones they currently pay), give a return on their shareholders’ investments, and invest in maintenance, upkeep, and new equipment over the life of the agreement without raising the rates of the customers who aren’t Maersk Line. When AMPT-VA opened I was delighted at the prospect of VIT having some local competition. Those hopes were tempered with the realization that AMPT-VA could not compete with VIT at all. They couldn’t attract any business other than one customer with a multi-port contract and their sister company. Eliminating VIT will put them in the driver’s seat, but at what cost? Rates will almost certainly go up, and carriers will minimize space available at Norfolk in order to maximize offerings at less-expensive ports. The cargo that doesn’t HAVE to move over Hampton Roads, the so-called discretionary cargo, will also be minimized. Less space = less cargo = falling volumes
= negative impact on jobs and the economy.
As a citizen of the City of Portsmouth I am troubled by the loss of tax revenue the city realizes from the current APT-VA facility under the APMT proposal. APMT is giving their terminal to the state, which takes it off the tax roll. This is devastating to a city in which so much of the otherwise taxable land and improvements are off the tax rolls due to government ownership.
As a native Virginian it galls me that the Virginia Port Authority has, for the first time in its history, been politicized. I can think of no other way to describe the wholesale sacking of the VPA board and the granting of the final decision on the APMT proposal to an unelected bureaucrat who will leave office with the current administration. Such machinations make sense only in a political context; they make no sense otherwise.
It galls me that the ability of the port, the state’s largest job generator, to continue growing the state and local economy is being bargained away for the sake of some quick money.
It galls me that the state seems to be champing at the bit to sell out the next 48 years of the port’s life at the bottom of the market. Granting a concession to a private operator may be in the long term best interest of the port, as long as the operator isn’t connected so strongly to one large customer, but doing so now would be a poor business decision when the value of the port concession will be much greater in a few years when an expanded Panama canal opens.
It galls me that the state, rather than protecting the investment it made in Norfolk Southern’s Heartland Corridor, is jeopardizing it with risky, ill-considered plans to cash out the ports and run. Discretionary cargo, the cargo that can move inland to the mid-west and beyond via rail over any port, can easily be shifted if APMT becomes the port’s concessionaire.
I find it curious that we have seen no letters from the maritime community or port stakeholders in support of this proposal. I’ve heard it said that there have been only a few negative letters made public. I would venture to say that the carriers who have commented negatively control the majority of cargo moving to/from the Far East via Hampton Roads and carry much more weight than the simple number of letters would indicate.
Of course, there are several entities that undoubtedly support the current APMT proposal, although I doubt you will see any of them putting their support in writing. These organizations would like nothing better than to see Hampton Roads come under complete control of APMT. They are, in no particular order, the Port Authorities of the Ports of New York, Baltimore, Wilmington NC, Charleston, and Savannah.
Joe Daughety, Maritime Sruveying Service Inc.
It seems that APMT has hung a very large carrot in front of the state. By the way, what an offer they have made at a time when our local government is digging deep to find financial resources to continue basic operations for the state. Seems a bit fortuitous if you ask me but as we know APMT / Maersk didn’t obtain their success by sitting in the background and waiting for an opportunity. Case in point an unsolicited bid to take over and operating the terminals of Virginia. With a 48 year operating rights to handle the current terminals and customers as they wish. A true monopoly of our industry at a time when the East coast was slowing moving ahead of our competitors both North and South with the expansion of the Panama Canal and a 50′ draft. Know that APMT / Maersk knows just what they are doing, it makes good business sense.
Again as you can see this makes very good business sense for them but not so much for Virginia as you will note APMT’s policy will be to increase their revenue pockets, not the states. Also we need to remember that APMT / Maersk is a direct competitor of all the lines currently calling the Virginia ports. If they take over the operations, I would expect that all the other lines will have an issue at putting money in the direct pockets of their competition. This will most likely lead to reduced cargo volumes and would not expect that will help Virginia’s bottom line. If APMT / Maersk feel this is a good opportunity then the state should take that lead and move forward with the current operation and reap the profits direct. We should not settle for scraps from the table as APMT / Maersk see fit, for 48 years.
If this deal goes through then I would expect that APMT / Maersk will dictate what and how things will be done. With their only driving considerations, that of their bottom line profits. They will not care about the state of Virginia and will serve only one master, probability. I do not blame APMT / Maersk they are doing what big business’s do increasing their bottom line and would expect them to continue that policy. Our state government should be fully aware that this is how they operate and that will not change in view of their takeover / operation of the ports.
We have always enjoyed a very good working relationship with VPA / VIT and although times have been tough, it has not been the result of bad management. Moreover it is the nature of the beast and the down turn of our overall economy. We can all agree that times have been tough and revenues, if and when possible are on the down side but this is a normal business cycle and we should think twice before we give up the goose that laid the golden egg. The current private and public partnership has worked for many years and is the very reason that APMT / Maersk want to take over the port, because they clearly recognize the efforts made over the years to build our terminals into the class operations they currently are. This issues should not be overlooked when considering the sell out of Virginia’s terminal resources and placing our destiny in the hands of a self motivated profit vendor.
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