Port Signs 10-Year Deal With Major Shipping Line

By Gregory Richards, The Virginian-Pilot, Norfolk, Va.

Feb. 28–NORFOLK — The Virginia Port Authority subsidiary that manages Hampton Roads’ marine cargo terminals announced Monday another in a string of long-term shipping line deals, this time with the world’s second-largest container carrier.

The 10-year deal between Mediterranean Shipping Co. and Virginia International Terminals calls for the Swiss company to ship at least 65,000 20-foot cargo containers annually through the port, more than triple the requirement in its present contract. The value of the agreement was not disclosed.

“I’m very happy — anytime you can sign up the second-largest shipping line in the world to a long-term contract, that’s a good thing for our port,” said Joseph Dorto, VIT’s general manager and chief executive.

The shipping line decided to expand its 20-year presence in Hampton Roads because of the port’s deep 50-foot water depth, its ready accessibility to railroads and the new cargo cranes and other improvements recently made at Norfolk International Terminals, according to Dorto and Tony Whealdon, director of operations for Mediterranean Shipping Co. USA in Norfolk.

Mediterran ean Shipping’s vessels will relocate to the Norfolk terminals from the smaller Newport News Marine Terminal as part of the arrangement.

This is VIT’s fifth decade-long deal and its third-largest, Dorto said.

It follows a $500 million contract announced in January with a shipping consortium called the Grand Alliance and one completed last year with the CKY group of lines.

VIT contends that the longer contracts help ensure that it and the port authority, which owns Hampton Roads’ three cargo terminals, will have the financial strength to improve and expand the port.

The biggest of those undertakings is the planned $1.8 billion container terminal for Portsmouth’s Craney Island, which would greatly expand the port’s capacity.

About 65 percent of the port’s business is now through 10-year arrangements, Dorto said.

He explained that while few other ports have locked carriers into 10-year deals, now is the time to do so because it is a “seller’s market” for terminal operators. While container volumes are rapidly increasing, high-quality terminal space is becoming harder to find.

Mediterranean Shipping’s contract with VIT was to expire in August. The new pact takes effect Friday.

Maritime consultant William Coffey said VIT has been aggressive in going after business from “A-list carriers” such as Mediterranean Shipping.

“Virginia’s numbers have been very strong, and they’ve more than maintained their position as the mid-Atlantic powerhouse of the container ports,” said Coffey, president of Beaufort Maritime Group of Newport, R.I.

Hampton Roads tied Charleston, S.C., in 2005 as the East Coast’s second-largest container port, behind the port that serves New York and New Jersey.

In 2004, Hampton Roads ranked third behind Charleston.

Though Mediterranean Shipping moves about 50,000 containers yearly through the port, Dorto said, he expects that to reach about 100,000 in a few years, making it one of the port’s largest customers.

Whealdon said the additional containers are not coming at the expense of other ports but represent new business.

Last month, published reports said Mediterranean planned to divert container shipments from Norfolk to Baltimore, something Dorto said at the time was not true.

Reach Gregory Richards at (757) 446-2599 or gregory.richards@pilotonline.com.

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Copyright (c) 2006, The Virginian-Pilot, Norfolk, Va.

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