Maersk executive to be next leader of the Port of Virginia

The Virginia Port Authority has named an executive from the largest container shipping line in the world to be its next leader.

The Virginia Port Authority (VPA) Board of Commissioners voted unanimously Thursday to select retiring Maersk Line Ltd. President and CEO John Reinhart as the authority’s next executive director and CEO. His appointment will be effective in February 2014.

“John certainly has the credentials,” said Ted Prince of T. Prince & Associates, a maritime supply chain consultant. “First of all, he’s local. He’s worked for a [shipping] line, and he probably understands the business more than a great number of port commissioners.”

Norfolk-based Maersk Line Ltd., which provides transportation, ship management and maritime technical services, is the U.S. flag subsidiary of Maersk Line. Maersk line is business unit in the Copenhagen-based A.P. Moller-Maersk Group, a $59 billion Dutch maritime and energy company.

Reinhart’s selection follows a recent trend of port authorities choosing leaders who have experience with ocean carriers. “I think the move towards carrier executives is increasingly important, because it gives an insider view into how the carriers are making their decisions,” said John Martin, a Lancaster, Pa.-based maritime consultant.

The Jacksonville Port Authority in Florida this summer named Brian Taylor as CEO, who was a longtime Horizon Lines executive. The South Carolina Ports Authority in 2009 named Jim Newsome as its president and CEO. He had been president of Hapag-Lloyd America Inc.

This move could be especially important because of the impacts of a proposed alliance, called the P3 Network, between the world’s three largest container shipping lines. Maersk Line, MSC Mediterranean Shipping Co. and CMA CGM — the first, second and third largest container shipping lines by capacity — are planning to pool vessels on three important trade routes: Asia-Europe, trans-Pacific and transatlantic.

The P3 Network, which still requires regulatory approval, is a response to overcapacity and volatile rates in the shipping industry. The operational alliance could begin in second quarter of 2014, and Maersk would provide 42 percent of the alliance’s capacity. “I think it will help them with understanding the P3 coming forward,” Martin said. “Which ports are able to secure that service and whether they will always call at the same ports is all up in the air.”

Reinhart’s appointment also could be seen as a stabilizing of the port’s relationship with Maersk. In 2007, APM Terminals, another business of the A.P. Moller-Maersk Group, opened a $500 million state-of-the-art terminal that would compete with the Port of Virginia for business. In 2010, after the terminal struggled to gain customers in the wake of the global recession, the port signed a deal to lease the terminal for $40 million a year. Less than two years later, APM Terminals submitted an unsolicited bid to run port operations at the Port of Virginia, although the board ultimately decided to stick with its longtime operator, Virginia International Terminals.

“This could be seen as a stabilizing opportunity perhaps,” said Martin. “That’s not to take away from [Reinhart’s] qualifications. But it could show more of walking hand in hand.”

Reinhart was chosen from 71 applicants, 10 of whom were interviewed by the executive search committee of the board.

Art Moye, executive vice president and secretary of the Virginia Maritime Association, called the Reinhart's selection an “excellent choice.” “John has been here some 14 years and during that time obviously he’s become very familiar with the port community and what this port has to offer,” Moye said. “And I think the fact that he not only knows the port community but has been part of the port industry is definitely an advantage.”

He will take over during a transitional time at the port. The VPA is restructuring to better align itself with Virginia International Terminals. For more information, read our September issue here.

Reinhart worked for the A.P Moller-Maersk Group a total of 23 years, although his career there was not consecutive. He returned to Maersk Line Ltd. in 1996, when he was a regional director and senior vice president, responsible for commercial activities of the company, including sales, customer service and marketing for North America. He was named CEO in 2000 and president in 2004. He previously worked for Universal Maritime Services, where he held executive roles, including president.

Maersk had announced his retirement in October.  At the time, the company said he would stay on until January 2014.

Reinhart follows Jerry Bridges, who left the Port of Virginia last fall as executive director. Rodney Oliver, chief financial officer of the port, has been serving as interim executive director.