Infrastructure Policy Culminating Group Project

Nathan Britt, Logan Dupuy, Evan Fitts, Ryan LaRochelle

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The Port of Virginia Standards Improvement

Nathan Britt, Logan Dupuy, Evan Fitts, Ryan LaRochelle

University of Virginia, Sorensen Institute College Leaders Program 2015

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TABLE OF CONTENTS

I. Cover Sheet (pg. 1)

II. Table of Contents (pg. 3)

III. Policy Brief (pg. 4)

IV. Preliminary Report (pg. 8)

V. Annotated Bibliography (pg. 11)

VI. Policy Analysis and Proposal (pg. 17)

VII. Legislative Action Plan (pg. 21)

VIII. Conclusion (pg. 25)

IX. Works Cited (pg. 26)

X. Appendix (pg. 27)

a. Code of Virginia (pg. 28)

b. Press Release (pg. 30)

c. Advocacy Letters (pg. 32)

d. Letter to the Editor (pg. 36)

e. Supplementary Materials

i. Planned Channel Improvements

ii. Warehouses and Distribution Centers

iii. Export-Import Comparisons

iv. Channel Capacity Comparisons

v. Port of Virginia Data

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POLICY BRIEF

Background:

The Port of Virginia is one of the largest sources of revenue for the

Commonwealth. It is also one of the largest employers of Virginia’s workforce. The Port

has begun to fall behind its competitors on the East Coast. The amount of cargo entering

the Port is increasing quickly, and the Port is making an effort to increase its ability to

bring in the cargo. The problem is that the infrastructure of the region has not been able

to keep up with the demand of the Port. Trucks are having serious issues with congestion

while entering and leaving the Port’s terminals, which hurts productivity, as well as

efficiency. It also raises prices for vendors and eventually consumers, thus hurting the

competitiveness of the port with peer operations.

Issue:

The issues experienced at the Port include, but are not limited to:

● Poor stakeholder communication and coordination

● Lack of common platform for distributing information

● Interest of stakeholders out of alignment

● Forecast data not being available or infrequent

● Bigger ships dropping off more containers

● Bunching up of vessel calls

● New alliances resulting in inconsistent terminal calls

● Terminals at max capacity

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● Poor marine terminal productivity

● Lack of productivity standards

● Flow problems at gates and terminals

● Chassis imbalance. Not available when and where needed

● Not enough qualified drayage drivers

● Too many one-way drayage moves

Solution:

The bill would implement three step-by-step mechanisms to improve the Port of Virginia.

1. A change in the structure of the Virginia Port Authority (VPA) Board of

Commissioners is the most significant change the legislation creates. The VPA

will need to follow new standards when replacing or appointing new members to

the Board of Commissioners. The changes include making the removal of Board

members based on performance and not politics, staggering terms to keep

experienced Board members on longer, and requiring specific expertise in a

number of areas for Board members, so there will be a diverse group.

2. Establishing a quantitative plan for increasing efficiency standards at the truck

terminals is the follow-up mechanism to the Board of Commissioners alteration.

The long-term, goal-orientated, and business-centric blueprint should have clearly

defined and focused metrics for assessing improvement. The Virginia Port

Authority will determine and implement these standards, bringing them up to par

with peer ports on the East Coast. They will also be responsible for holding the

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port operations accountable to these standards that they set. In addition, producing

daily output performance reports to the Port of Virginia stakeholders (government

officials, private companies, independent owners, contract operators, etc.) in order

to promote government transparency in Port operations, while also providing a

reasonable barometer to gauge the Port productivity is a vital part of the

legislation. This “scorecard” will take the form of an email sent out to warehouse

operators, trucking operators, and other stakeholders in the area.

3. The last proposal involves the commissioning a study of the road and rail

infrastructure in the Hampton Roads region. The goal is to better address the

needs of the truck drivers and the Port with efficiently getting cargo out of the

terminals and to the correct distribution centers. Currently, infrastructure needs

are high, meaning that a study would be most appropriate to determine the most

needy areas and determine the estimated cost.

Impact on Virginia:

Virginia, as a whole, is one of the most prosperous states in America. The federal

government’s growth and influence in Northern Virginia is the reason why the

Commonwealth is relatively wealthy compared to rival states. Despite the enormous

amount of growth within Virginia, the Southern and Southwestern portions of the state

are plagued with economic strife due to the virtual obliteration of their industry (coal,

tobacco, textile, etc.). Because the Commonwealth is experiencing this economic

disparity, the Port of Virginia stands as the state’s greatest asset in developing a sense of

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economic independence from the federal government. If the Port is used to the best of its

ability, then economic opportunity would be boosted in every region of the state.

The Port of Virginia contributes to the state’s economy by the transportation of

export and import cargo within Virginia and across its borders from other states and

countries, and the added processing and distribution of imports retained in the

Commonwealth. However, the Port’s infrastructure has not kept up with the speed of

globalization, and as a result has been struck with congestion and inefficiency, even as

they have begun to accommodate for increased volume. Other ports along the East Coast,

in South Carolina, New York, and New Jersey, are seeing weakness in this area of

Virginia, and are mobilizing their respective ports to attract revenue from Virginia. If the

state government fails to act and improve the performance quality of the Port of Virginia,

the Commonwealth will lose its greatest chance at diversifying the economy, ending

regional inequality, and becoming a self-sustaining, economic powerhouse.

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PRELIMINARY REPORT

What is the problem that you’re trying to fix?

The Port of Virginia is inefficient due to congestion at the truck terminal.

What is the solution proposed?

The solution is to raise the efficiency expectations of the Port, launch a study to

assess the infrastructure issue, implement public daily performance reports, and

restructure the governing authority to better represent those most affected by this

congestion, the truckers.

Why was this specific issue chosen?

The hindrance of economic growth to Virginia because of the truck terminal

congestion at the Port is a significant problem affecting the Hampton Roads area, and

thus the rest of the state.

What were the broad questions that guided research into this issue?

1. Why is the truck congestion such an ongoing problem at the Port of Virginia?

2. What implications does Virginia’s ineffective port system have on the rest of the

Commonwealth?

3. With its optimal location and depth, why has the Port of Virginia been not

reached its potential?

What is the relevance of the issue to the Commonwealth and its citizens?

The economic independence of the Commonwealth is in jeopardy if the

government fails to improve the quality of the Port of Virginia. Besides the federal

government, the Port of Virginia is the single largest source of economic strength in the

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Commonwealth. Other ports along the East Coast are seeing weakness in this area of

Virginia, and are moving to capitalize on Virginia’s lack of improvements.

Why is this an issue that requires governmental response?

The Commonwealth of Virginia owns the Port of Virginia

What are the arguments for the creation of the programmatic or policy response to issue

that will be proposed?

The Panama Canal has almost finished its expansion, which will allow larger

cargo ships to reach ports on the East Coast that were previously isolated to the West

Coast. Because this expansion will allow for more ships to come into the United States

via East Coast ports, Virginia needs to invest into its outdated infrastructure in order to

accommodate larger ships. The Commonwealth needs to commit to researching viable

solutions to the truck congestion at the Port, in order to alleviate the currently occurring

congestion. The purpose of the study will be to discover the best tangible method of

increasing efficiency through an innovative solution, such as stronger road-rail systems,

or better telecommunications networks between firms using the Port and the Virginia Port

Authority.

What is the basic form of your policy response?

The basic form of the policy response is a piece of legislation that establishes a

study to investigate the main cause of truck congestion at the Port of Virginia in addition

to restructuring the governing board, implementing productivity standards, and starting a

daily output performance report to stakeholders.

What ongoing questions do you have?

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1. Is it politically feasible to pass legislation relating to the Port of Virginia?

2. Is it possible to acquire funding to fix the infrastructure of the Port of Virginia?

3. How did the truck congestion problem develop so rapidly?

4. What specific mechanism of the Port of Virginia should be assessed when

deliberating about poor port infrastructure?

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ANNOTATED BIBLIOGRAPHY

Campo-Flores, A. & McWhirter, C. (2015). U.S. ports see costly delays as cargo ships, volumes grow. Wall Street Journal.

Due to an increase in container volume, truckers are having a hard time getting in

and out of the Port of Virginia with their cargo. This decrease in the amount of hauls that

they are able to complete in a day is hurting small trucking companies in the Hampton

Roads area and also cutting into the business of companies receiving freight from the

Port. This increase in container volume is the result of larger, more cost-efficient cargo

ships that can combine freight from different vendors for the purpose of efficiency.

United States ports are having a hard time adjusting to this change in the shipping

industry because the infrastructure of the Port was not designed to handle ships carrying

that much volume. A shortage of chassis is also leading to congestion at the truck gates

and terminals. These problems are compounding upon each other and will eventually lead

to higher costs for customers and large amounts of out of stock items due to inefficiency

and the passing of higher costs down the supply chain to consumers. Governments are

scrambling to fix these problems, but are having a hard time catching up with industry.

Journal of Commerce. (2014). U.S. ports shift focus to operational efficiency. Maritime.

The key to the success of the ports, not just the Port of Virginia lies in some of the

minor details such as better information flow and reducing the delay of truckers. The

congestion at the gates has caused major issues since 2013 as the amount of cargo per

container ship has become denser. There is now an increased cooperation between the

ports of New York-New Jersey as communication has increased. With the expansion of

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the Panama Canal finishing by the end of 2015, the ports are working to increase their

efficiency. Container terminals all across the United States are starting to increase their

productivity with the use of automation to speed the cargo handling and gate transactions.

McCabe, R. (2015). Virginia port authority faces a bottleneck of problems. The

Virginian-Pilot.

Virginia ports are plagued by inefficiency because of the increased line of

congestion at the truck gates. This issue is causing public relations problems all across

the world as the news story travels to important shipping locations. It is not the only port

to be having issues as important marine terminals across the United States suffer from

similar problems. For increased transparency, the port authorities have promised weekly

reports of port efficiency metrics, which includes how long truckers will wait in line. The

Motor Carrier Task Force (MCTF) says the solutions so far have not been enough and

that the truckers are expressing their frustration at the situation. The inefficiency of the

ports has decreased trucker productivity by 50% and if this path continues, many worry

that the trucking companies cannot continue to sustain themselves. In recent years, little

has been done for the infrastructure in the area to prepare for the bigger problems that

have been broadcasted for several years now.

O'Bannon, J., & Greer, H. (2013). Review of the Virginia Port Authority's

competitiveness, funding, and governance. Joint Legislative Audit and Review Commission.

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This study is a very important piece to a true understanding of the Port of

Virginia’s current situation. The Joint Legislative Audit and Review Commission

(JLARC) is a commission that directly reports to the General Assembly and the Governor

with their studies on Virginia’s institutions. They state how the Port is a vital economic

asset to the Commonwealth. A 2007 estimate (which has been since updated by a

William and Mary study in 2014) put the economic impact at $1.9 billion in revenue,

$566 million in employee compensation, and 10,157 jobs. The good news that came out

of JLARC’s report is that the Port so far has competed successfully against other East

Coast ports. A number of other studies have shown that despite this successthe port will

fall far behind competitors if the current system remains unchanged. JLARC came to a

similar conclusion, but uniquely focused on the prices and funding involved. Currently,

the Port of Virginia’s prices are relatively high which has not negatively affected its

competitiveness, but likely will in the future. Therefore, the Port needs to find out how to

improve its efficiency. Also, state funding for the Port has fallen relative to the revenue

coming from terminal operations. This decline does not mean that the state has to give

more funds to the Port, because Georgia and South Carolina have developed funding

models/systems that have allowed them to thrive without state assistance. Either way, the

Port needs to address its current funding model to improve its production and efficiency.

Ochsner, N. (2015). Congestion at area ports threatens business, economy.

ABC 13 News.

This article addresses the very basics of what is currently befuddling the Port of

Virginia’s operations. The Port is not the only port in the nation that is facing problems

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affecting productivity, but there are unique problems that need to be addressed in the

Hampton Roads area. Ochsner states how CEO Reinhart of the Virginia Port Authority

(VPA) has been working hard to study the issues that have been plaguing the region. The

basic sentiment is that the pace of infrastructure growth needs to keep up with the growth

of the Port. A number of new terminals are being added/expanded and the depth of the

Port is increasing, but there has not been much effort to work to alleviate the congestion

preventing trucks from getting in and out with cargo. The work to expand the Port is

basically pointless unless there is a plan to make sure trucks (and potentially trains) can

get in and out with ease. The stakes are high when the Port provides so much money to

the Commonwealth with its revenues. There are many natural advantages that the Port of

Virginia has so there has to be a concerted effort to make a smart plan going forward to

ensure that the it remains one of the most competitive ports on the East Coast.

The Port of Virginia. (2015). About. Commonwealth of Virginia.

This article provides a thorough overview of the port operations and infrastructure

in the Commonwealth of Virginia. It describes in detail the history of ports in Virginia as

far back as pre-colonial times. The Port of Virginia in Hampton Roads currently is as

successful as it is because of the depth of the Port, its location, and huge natural assets.

The Hampton Roads terminals have risen from 30th in US container volume in 1980 to

3rd in 2013, which explains the constant infrastructure problems at the Port. There are a

lot of useful maps in this literature that help one visualize the operation and could

potentially be used in the final report, perhaps the most useful part of this article. This

article also touches on the Longshoreman’s Association, a parallel problem that will play

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a part in any changes proposed at the port. This work will be a tremendous resource for

explaining these problems to involved parties.

Virginia Maritime Association. (2015). Congested. Maritime Bulletin, 79(3).

In “Congested!” – the headlining article of the Virginia Maritime Association’s

Maritime Bulletin from March – the issue of truck congestion at the Port of Virginia was

described. A summarization of the ongoing methods the stakeholders of the Port’s

operation have been attempting to improve the Port of Virginia is located within the text.

The information from the article is beneficial to the future of the Port, because it

articulates a variety of mechanisms from the Motor Carrier Task Force (MCTF), an

establishment of the Virginia Port Authority (VPA), which could sooth the congestion at

the truck terminals. Because of the defined recommendation list to improve the Port, the

infrastructure policy group’s research can narrow the list of viable solutions to solving

the Port’s truck predicament.

Virginia Maritime Association. (2015). Cuban diplomat addresses annual maritime

banquet audience. Maritime Bulletin, 79(5).

In the article “12th Annual International Trade Symposium Review” from the

Virginia Maritime Association’s Maritime Bulletin, the overarching themes and ideas

from the International Trade Symposium (ITS) were rehashed. The purpose of this year’s

ITS is apparent in its title, “Curbing Congestion – How Do We Get There from Here?”

The agreements that were reached among the panel of stakeholders are the most notable

characteristic of this text. Everyone involved with the Port of Virginia in both the

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government and the private sectors understands that the Port has not had the proper

infrastructure investment that was needed to be an efficient oceangoing operation. If the

issues associated with the Port are not dealt with, the economic prosperity of the country

will plummet. With all parties being in the position to collaborate for the betterment of

the Port, the results of the policy group’s research has a stronger chance of being

implemented.

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POLICY ANALYSIS AND PROPOSAL

What is the programmatic or policy response to the issue that was chosen?

The infrastructure group’s response to the inefficiency of the ports is to create a

bill called The Port of Virginia Standards Improvement Act. This bill has three parts that

detail what needs to be done to increase the efficiency of the Port of Virginia. Part One

pulls from the Joint Legislative Audit and Review Commission (JLARC) report 446 by

implementing recommendations 5, 6, and 7, which reference the Board of Commissioners

for the Virginia Port Authority. This part has three sections and deals exclusively with

62.1-129 of the Code of Virginia that refers to the qualifications of Board appointees.

● Section One states that appointees can only be removed from the board for

“Malfeasance, misfeasance, incompetence, or gross neglect of duty”

● Section Two mandates that the board members have staggered terms (e.g. the U.S.

Senate) so there are always experienced board members on at all times

● Section Three will require the members to have certain expertise in their field in

order for all aspects of a port’s functioning to be represented

Part Two of the bill establishes a plan to increase efficiency standards of the Port

of Virginia by the start of the 2017 fiscal year. This task can be accomplished by having a

daily output performance “scorecard” that is distributed to stakeholders and made

available to the public. The “scorecard” would include the numbers from the previous

day and the previous day’s projections to include, but not limited to, container moves per

hour, availability of chassis, and TEU (Twenty-Foot Equivalent Unit). It will also include

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the next day’s projections. By having a “scorecard” that is easily accessible, there would

be a greater sense of transparency, and thus a greater ability to track progress.

Part Three involves the commissioning of a study to evaluate the road and rail

infrastructure, specifically in the Hampton Roads region, to maximize the efficiency of

trucks and trains both entering and leaving the Port. Currently, rail infrastructure seems to

be underutilized as a way to get cargo out more productively. Also, a previous effort to

create a new Route 460 fell into legal troubles, but this study could address the possibility

of expanding the already existing Route 460. This study could also estimate the

appropriate funds that would be needed for these infrastructure projects.

Why is this the appropriate response to this issue?

Currently, there have been many reports and studies done on the Port of Virginia,

but it appears that implementation has lagged. The barge of information needs to be

analyzed and turned into appropriate action. The Board for the VPA is capable of

constructing a plan that addresses the concerns in the numerous studies. The stipulation

that will be addressed in the legislation is that the plan they create must be implemented

by the end of 2016, due to the necessity of quick results. Several of the top studies such

as the JLARC Report 446, the Motor Carrier Task Force (MCTF) Report, and Virginia’s

Maritime Association reports each can be drawn from, and some of the recommendations

that require legislation will be addressed in the remainder of this bill. The main proposals

involve a restructuring of the Board of the VPA in order to increase experience and

expertise. While there has been a number of studies done on how the Port can improve

and how the leadership can be maximized, there has been little about how the state can

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address the infrastructure needs of the Hampton Roads region, which is vital to the Port’s

performance. A study should be conducted to address this unique need and the

recommendations should be implemented as soon as possible.

Why is this something that should be addressed at the state level?

The Virginia Port Authority and the Port of Virginia are both specially outlined in

the Code of Virginia. To make changes to either of these agencies requires new

legislation. The Port of Virginia operates primarily for Virginia’s benefit, because goods

are distributed all across the Commonwealth, and Virginia creates a profit from the

resources that are distributed out of state, as well. Whether the impact of the Port is direct

or indirect, it affects the economy of the entire state. People in South/Southwest Virginia

or Central Virginia might not realize the influence the Port has, but failure of the Port to

remain competitive with other states would have statewide consequences.

Are there alternative reasons that should be taken into account?

The International Longshoremen’s Association (ILA) could have minor concerns

with the new requirements, because it will be directly affecting their member base. Since

similar plans have been instituted in other ports such as in New York (where the ILA is

also present), there should be common ground that can be reached. Another possibility

could be that the Governor may take issue with losing minor control over who and how

many people he can appoint to the VPA. While this is a credible concern, the sole

purpose of the bill is to increase the efficiency of the Port and being able to keep

effectively competing with other states, namely the ports in Savannah and New York-

20    

New Jersey. The Governor has a strong drive to improve business interests in Virginia, so

there should be common ground with this as well.

What are the resources (i.e., how much will it cost?) that will be needed to carry out the

programmatic or policy response?

There will be no new money needed to enforce the new VPA board structure.

There will be no new positions added to the Board, but instead the proposal is just a re-

working of how the current board functions. No new funds will be needed to address the

new efficiency standard requirements. The Board will be in charge of devising and

implementing their plan to increase standards by the end of 2016. Since the Port already

has an employee who is in charge of tracking container moves per hour by month, there

is no need to hire any new employees to meet the daily “scorecard” requirements. Studies

by JLARC are already part of the General Fund and are manned by members of the

General Assembly, so there should not be any new funding for a study on road and rail

infrastructure in the Hampton Roads region.

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LEGISLATIVE ACTION PLAN

Legislators:

Potential supporters of this bill to improve the efficiency standards of the Port of

Virginia would be any legislator that deals with the economic development benefits that

are related to the Port. These legislators would be spread far and wide across the state,

because of the hundreds of warehouses from huge distributors (Wal-Mart, Amazon,

Target, Unilever, Canon, Best Buy, etc.) that line the state’s interstate highways.

Assemblymen should be able to support all of the sections outlined in the bill. The

change in the Board’s structure would increase the level of expertise within the Board

and hopefully improve port efficiency. An increase in performance goals in order to catch

up with those of other East Coast ports is a clear way to stay on top of the Port of

Virginia’s competitors. Finally, the publication of a daily port “scorecard” to businesses

in the area will help businesses of every size feel included and informed on how they will

be able to operate for the following day. The low inherent cost and potentially high return

on this bill makes this piece of legislation appealing to legislators. There are certain

legislators in the General Assembly that should be targeted as potential co-sponsors or

supporters of this bill. They include the following:

● Sen. Kenneth Alexander (D-5)

● Del. Todd Gilbert (R-15)

● Del. Steve Heretick (D-79)

● Del. Daun Hester (D-89)

● Sen. Lynwood Lewis (D-6)

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● Sen. Maime Locke (D-2)

● Sen. John C. Miller (D-1)

● Sen. Tommy Norment (R-3)

● Sen. Mark Obenshain (R-26)

● Del. Joseph E. Preston (D-63)

● Del. David Yancey (R-94)

These legislators have districts that either benefit the most from the Port in the Hampton

Roads Area or benefit from large warehouses in their district.

Interested Parties:

There are plenty of parties that would support this bill. Big businesses that operate

warehouses in Virginia have been losing money because of the Port’s efficiency

problems. Reaching out to the government relations operations of these corporations

could give this bill power (Wal-Mart, Amazon, etc.). Small businesses, such as the small

trucking companies that move items in and out of the Port would be hugely in favor of

this proposal. The Chamber of Commerce could also provide political support. The

coalition that would be in support of this bill has the potential to be one that could

influence many in the General Assembly to vote for it.

The primary opposition that may exist is from an organization called the

International Longshoremen's Association, the union of port workers. They may oppose

the bill because of the increased expectation of performance for their workers. They have

a record of negotiating for more relaxed standards and protecting jobs that prevent the

23    

mechanization of the port, particularly in the example of their last drawn out negotiation

with the port in 2012.

Committees:

It is difficult to delineate an exact reason why Speaker Howell would oppose this

bill. As a Republican, the bill improves governmental efficiency, lacks any inherent cost,

and increases transparency. As the Speaker, this bill restricts the power of the Governor

in the slightest way, which may be particularly satisfying to him. Senator Tommy

Norment, the majority leader of the Senate, could actually be targeted as a sponsor of this

bill. His district benefits from some of the warehouses that receive freight from the port,

so he should at least support it. This bill may be sent to the committees of Transportation,

Commerce & Labor, or General Laws.

Governor:

The Governor is likely to support most of this bill, as it is a generally agreeable

proposal. The fact that Section One of the bill may restrict the Governor’s appointments,

ever so slightly, may cause some push back, but it would be hard to imagine him vetoing

a bill with a large bipartisan majority. Currently, there are certain requirements about the

qualifications that one must have to be on the board of the Virginia Port Authority. This

proposal only adds one more qualified individual from the trucking industry, which may

be perceived as a restriction on the Governor’s political appointments. That being said,

the support of the trucking industry is enough of a trade off to give in to that one

requirement.

First Steps:

24    

The first tasks to be completed in order to promote this proposal are reaching out

to different parties and forming a bipartisan coalition of legislators, small businesses,

corporations, local chambers, and local governments to promote this bill in the General

Assembly, and to gather input on what else could be done to improve the bill. Targeting

legislators that have warehouses that benefit from the port (which amounts to a majority

by itself), warehouses that receive from the port (like Wal-Mart and Target), companies

that conduct land transport from the port like Heartland Express and small independent

operators, and local governments in the Hampton Roads Area that have a vested interest

in the economic development boons provided by the port will form a powerful and

diverse coalition that should be enough to pass this bill.

25    

CONCLUSION

Reform for the Port of Virginia appears to be a lofty endeavor at first glance. In

reality, the Port has performed quite well, and is a great source of revenue for the state.

The failures to keep up with the progress of other East Coast competitors lies in a number

of areas that are fixable. The policy proposal presented specifically aims to raise

standards, increase the expertise and experience of executive board members, and sets its

sight on the future with a study to address vital future infrastructure improvements. These

first steps in reforming some of the critical parts of the Virginia Port Authority and the

Port of Virginia’s functioning should better enable it to keep up with competitors and

streamline the necessary changes to increase productivity and efficiency. A failure to

make these critical first steps leaves the Port of Virginia in a position that is inferior

compared to its competitors in a time when the influx of cargo to the East Coast is

expected to grow exponentially. Simply put, this situation means that the Port would fail

to reach its economic potential for the state despite many natural advantages that it has.

The Port of Virginia can be a leader in North America and these policies will prime it for

even greater leaps forward in the future, but doing nothing will be a disappointment since

it will be a huge opportunity that will have been missed.

26    

WORKS CITED Campo-Flores, A. & McWhirter, C. (2015). U.S. ports see costly delays as cargo ships,

volumes grow. Wall Street Journal.

Journal of Commerce. (2015). Port of Virginia. Maritime. Journal of Commerce. (2015). Port Productivity. Maritime. Journal of Commerce. (2014). U.S. ports shift focus to operational efficiency. Maritime. McCabe, R. (2015). Virginia port authority faces a bottleneck of problems. The

Virginian-Pilot. O'Bannon, J., & Greer, H. (2013). Review of the Virginia Port Authority's

competitiveness, funding, and governance. Joint Legislative Audit and Review Commission.

Ochsner, N. (2015). Congestion at area ports threatens business, economy.

ABC 13 News.

Old Dominion University. (2010). Hampton roads versus other east coast container reports. State of the Region.

Pearson, R., & Swan, S. (2014). The fiscal year 2013 virginia economic impacts of the

port of virginia. The Raymond A. Mason School of Business. The Port of Virginia. (2014). Motor Carrier Task Force. Motor Carrier Advisory Board. The Port of Virginia. (2015). About. Commonwealth of Virginia. Virginia Maritime Association. (2015). Congested. Maritime Bulletin, 79(3). Virginia Maritime Association. (2015). Cuban diplomat addresses annual maritime

banquet audience. Maritime Bulletin, 79(5). Virginia Places. (2015). Ports in Virginia. Transportation.

27    

APPENDIX

28    

A. The Code of Virginia

Section 62.1-129 of the Code of Virginia provides in relevant part (Amended 2014

General Assembly Session):

The Board shall consist of the State Treasurer, the Chief Executive Officer of the Virginia

Economic Development Partnership (VEDP) and eleven members appointed by the

Governor, subject to confirmation by the General Assembly, who shall serve at the

pleasure of the Governor. The terms of members of the Board of Commissioners

appointed or reappointed by the Governor on or after January 1, 1981, shall be for five

years. Any appointment to fill a vacancy shall be for the unexpired term….No member

appointed by the Governor shall be eligible to serve more than two successive terms. A

person heretofore or hereafter appointed to fill a vacancy may be appointed to serve two

additional terms.

It shall be amended to say:

The Board shall consist of the State Treasurer, the Chief Executive Officer of the Virginia

Economic Development Partnership (VEDP) and eleven members appointed by the

Governor, subject to confirmation by the General Assembly, who shall serve at the

pleasure of the Governor. The terms of members of the Board of Commissioners

appointed or reappointed by the Governor on or after January 1, 1981, shall be for six

years. Any appointment to fill a vacancy shall be for the unexpired term….No member

appointed by the Governor shall be eligible to serve more than two successive terms. A

person heretofore or hereafter appointed to fill a vacancy may be appointed to serve two

additional terms. Members cannot be removed except during cases of malfeasance,

misfeasance, incompetence, or gross neglect of duty. Members will serve staggered terms

29    

with three board members being up for replacement or reappointment every two years.

The Governor shall ensure that membership of the Board includes expertise in maritime

shipping or seaport operations as one of the qualifications for Board membership. It will

be required that most of the Board members (nine) have experience in the areas of

maritime shipping or seaport operations; business administration or finance;

distribution, warehousing, or manufacturing; transportation; trucking; and agriculture,

all of which are most applicable to port operations.

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B. Press Release

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Legislation to Improve the Port of Virginia Impending in the Virginia General Assembly COLONIAL HEIGHTS, Virginia (June 22, 2015) – The horrendous inefficiencies plaguing the Port of Virginia will be an obstacle of the past due to a piece of legislation sponsored by House Majority Leader Kirkland Cox (R-66) which will improve the wait time at the truck terminals. Container volume at the Port of Virginia has broken records in the past two years, thus straining the motor carrier's ability to move the freight off the terminals. The lack of adequate infrastructure has resulted in the trucks being backed up from the Virginia International Gateway all the way onto Highway 164. This traffic struggle has necessitated immediate action from the state legislature, with Delegate Cox pushing this legislation through the House of Delegates. If Delegate Cox’s bill becomes law, the recommendations of the Motor Carrier Task Force (MCTF) – an organization of the Virginia Port Authority (VPA) – will be implemented onto the Port. Using the expertise of transportation experts, the changes in Port policy will improve the safety of the workers in the Port, reduce the turn times of trucks, cut wait time at the gates of the Port, improve chassis availability to get truckers in and out at a higher rate, and better regulate the flow of trucks to and from the terminals. Despite the Port of Virginia being located in Hampton Roads, the problems evident in Tidewater affect the economic prosperity of the rest of the Commonwealth and the rest of the United States. Delegate Cox is doing all in his power to ensure the economic attractiveness of the Port of Virginia on behalf of all Virginians. To learn more about the Majority Leader’s positions and legislation, visit http://www.kirkcox.com/ Contact: Evan Fitts, Deputy Communications Director Evan.fitts@house.virginia.gov (804) 555-2541

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C. Advocacy Letters

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Ryan LaRochelle 5505 Burberry Ln Glen Allen, VA 23059 804-517-5746 The Honorable Walter Stosch Senate of Virginia P.O. Box 396 Richmond, Virginia 23218 Dear Senator Walter Stosch,

The Port of Virginia is one of the largest sources of revenue for the commonwealth and one of the largest employers of Virginia’s workforce. The port is simply falling behind its other competitors on the east coast. The amount of cargo entering the port is increasing fast and the port is making an effort to increase its ability to bring in the cargo. The problem lies in the fact that the infrastructure of the region is not keeping up with the demand of the port. Trucks are having big issues with congestion while entering and leaving the port’s terminals, which is hurting productivity, and efficiency while at the same time raising prices which hurts its competitiveness.

While this issue would not seem to affect the residents of the 12th district, the ramifications from a failure to address the port’s problems will affect all Virginians. The economy of Virginia is largely centered on federal funding through defense contractors, but the Port of Virginia stands as an invaluable asset to the Virginian economy. I believe and many studies have shown that the economic impact of the port is very high. Creating a policy that fixes the port’s funding issues and addresses the infrastructure needs of the Hampton Roads area will be a large leap forward in making Virginia more economically independent from the federal government. The Port of Virginia is in a natural position to be the port of choice for the east coast if the port is able to run efficiently and its problems can be addressed. The amount of increased revenue that comes out of this sort of project could be outstanding and help address many needs of the commonwealth that there is not enough funding to currently address. The residents of the 12th district can certainly be some of the recipients of this increased funding. There have been numerous studies and articles outlining the problems and needs of the Port of Virginia. I am writing to you because I believe that now is the time for action to be taken on this issue. The Virginia Port Authority has been in the process of trying to narrow down its needs and address them. The VPA simply cannot fix all the problems especially since addressing infrastructure needs around the port is a matter of the commonwealth. Research by the Joint Legislative Audit and Review Commission has stated that the funding system needs to be addressed. Many other states are using superior systems that are enabling their ports to increase revenue and productivity. High prices are already a problem at the Port of Virginia and this problem is only expected to grow given the increased influx of cargo. In addition, there needs to be a concerted effort to address the road and rail infrastructure to allow trucks and trains to enter and exit the port more

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freely and efficiently. I appreciate you taking the time to read this letter and consider the issue I have presented. I have collected a multitude of research on this topic and I can share this with you or your staff if you want to look into the problem more deeply. I have provided my contact in this letter and I would greatly appreciate hearing your thoughts on this topic. Sincerely yours, Ryan LaRochelle

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Logan D. Dupuy 263 Alto Road Vesuvius, Virginia 24483 (434) 316-3989 Senate of Virginia The Honorable Kenneth C. Alexander P.O. Box 396 Richmond, VA 23218 Dear Senator Kenneth Alexander,

My name is Logan Dupuy and I live in Amherst County. I’m currently in the Sorensen Institute for Political Leadership for the College Leaders Program. My group is working on a project on infrastructure in Virginia. We decided to focus on the efficiency of the Port of Virginia.

I’ve become very interested in the Port as of late and the inefficiencies that are plaguing the area. To be specific the wait times associated with the truck gates and the entire process involved in it. I read a report recently that due to these inefficiencies the productivity of the truckers have decreased by 50% in the last few years. We’re creating a proposal to specifically study the truck queues and ways to streamline them. The research we’ve done has not shown any studies done specifically on that major issue.

Since you’re a Sorensen member as well, you know the benefits of bipartisanship. We’re reaching out to members of both parties and looking for bipartisan support on these issues. It would be phenomenal if you could help us out. As I’m sure you’re well aware, the state of the port is not at what it could be and we want to do what we can to help. The lost revenue from the Port of Virginia affects every Virginian in one form or another and we want to make a difference.

Sincerely,

Logan Dupuy

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D. Letter to the Editor

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To The Editorial Board of the Richmond Times-Dispatch,

The level of service that the Port of Virginia is currently providing to warehouses in the Mid-Atlantic region and to truckers who ship freight to these vendors is unacceptable. Truck drivers are experiencing wait times of up to 8 hours at the port and are hauling about half as much cargo as they have been in the past, which is devastating for many independent operators and small trucking businesses, as their pay depends on the amount of containers that they can pull in a day. Warehouses are bearing huge logistical inefficiencies because of this poor level of service. Products are not being delivered on time to stores, peak days are coming and going with huge losses, and warehouses are running yearly deficits of up to $3 million. All the while the port is operating with a yearly profit of about $14 million. It is unacceptable for the Virginia Port Authority to allow this profit while businesses are losing tremendous amounts of revenue and, in the case of some truckers, going out of business. There are obviously infrastructural and logistical problems the port needs to deal with in order to operate at the required capacity for the region. It is encouraging to see long term expansion plans. Even so, changes need to be made now in order to save small businesses, prevent industry from moving to more efficient ports, stop the increase in prices that are being passed on to the consumer, and reach the level of service needed to accomodating vendors for the fall logistical peak season. It is entirely unacceptable for the government to be a hindrance on the economic flourishing of a region, especially when it is supposed to be exactly the opposite. Please encourage your legislator to pass Bill #### in order to help mitigate these problems.

Sincerely,

Nathan Britt

Hampton Roads Alliance for Commerce Development

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E. Supplementary Materials

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Port of Virginia Specifications:

Norfolk International Terminals (NIT) Specs

TERMINAL

Size 567 acres

Operating on 378 acres

Container Storage Area 131 Acres

Capacity 820,000 Containers

TEU Capacity 1,426,800 TEUs

Terminal Lifting Capacity 80 LT

700,000 lbs. via Samson

See crane specs for max lift accordingly per crane

Forklift Capacity

Yard Breakdown N/A

Gate Moves 530,000

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Foreign Trade Zone Foreign Trade Zone #20

LANDSIDE ACCESS

Interstate I-64

I-564

Street Terminal Blvd.

Barge

Truck Lanes 16 Lanes (Reversible)

Up to 26 Lanes planned at NIT North

Rail 18,000 Linear Feet of working track arranged in (12) 1,500 foot

sections Direct Norfolk Southern Service and CSX Service via

Portsmouth Beltline

65,000 linear feet of terminal access and storage tracks.

4 tracks in terminal Marshall Yard, 9,000 feet

WATERSIDE ACCESS

River Elizabeth River

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Channel 50 foot depth

Berth 2 Berths North Terminal/4 Berths South Terminal

Wharf 2,400 L.F. North/ 4,230 L.F. South

Turning Basin

EQUIPMENT

Ship-to-Shore Cranes 14 Super Post Panamax (6 North/8 South)

Straddle Carriers 107

Yard Hustlers N/A

RTG Rubber Tire Gantry Crane (3) 5 wide x 4 x 1 high

RMG (Rail Mounted Gantry Crane) N/A

Reach Stackers 9

Reefer Plugs 719

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Log Handlers N/A

Planned Channel Improvements:

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Warehouses and Distribution Centers in Virginia:

Export/Import Comparison:

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Channel Capacity Comparison:

Port of Virginia Data:

● Port Statistics

○ 13.5% Market Share

○ Deepest channel on the east coast (50ft and increasing to 55ft)

○ 80 million tons of cargo annually

○ 7-12% of regional economic activity for Hampton Roads in 2010

○ 6th largest container port in North America

○ 5,700 truck drivers depend on the port for work

○ $60.3 billion in spending impacted directly and indirectly

○ $30.5 billion value added solely for Virginia (6.8% of Gross State

Product)

○ $17.5 Billion in Employee Compensation (9% of Virginia’s Workforce or

374,000 Workers)

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○ $1.44 Billion in Tax Revenue

○ 30% of Virginia’s Economy is based on Exports

○ 30% of Cargo is Transferred Via Rail

● Comparative Port Statistics

○ Savannah was the fastest growing port in 2010 at 258.1% growth

○ Hampton Roads grew at 66.4% during the same time (National Average

was 63.7%)

○ Ship to Shore Moves Per Hour for Savannah was 37 and Hampton Roads

was 31.7

○ Port of Virginia was not in the top 5 for overall moves per hour (Fell

behind Los Angeles, Miami, Charleston, New York, Savannah)

○ Savannah moves nearly 1 million more 20-ft containers than Virginia in

2014 (3.34 million vs. 2.39 million)

● Port Budget for 2016

○ $123.4 million to address the motor carrier service, congestion relief, and

expanding capacity

○ Largest budget in more than a decade

○ $13 million dedicated to new rail enhancements