The first phase of Richmond’s newest boutique hotel is ready in time for city’s international bike races.
Richmond’s newest boutique hotel, which combined the talents of husband and wife team Katie and Ted Ukrop, opens on Thursday, Sept. 17.
While not all of Quirk Hotel’s 75 rooms are ready, the 54 rooms that are available are booked as the city gears up to host cycling’s biggest event, the UCI World Road Cycling Championships (Worlds). The races start Saturday and continue for nine days through Sept. 27.
The hotel is located in a historic landmark at 201 W. Broad St., just a few blocks from the race’s main grandstand area at 5th and Broad Streets. The 60,000-square-foot Italian Renaissance building, originally constructed in 1916, is the former home of J.B. Mosby & Co. dry goods department store.
With the first guests arriving Thursday, the hotel is opening in phases. Two floors will open then along with the building’s grand lobby and its Maple and Pine Restaurant. The remainder of the rooms are expected to open by Nov. 1., along with the hotel’s rooftop terrace and bar. Room rates are $269 a night mid-week, and $289 a night on weekends. They will drop to the high $190s during the November, December and January, according to the hotel's publicist.
The renovation of the building has retained the lobby’s soaring segmental arches, large windows and ornamental ironwork staircase. As homage to the building’s former days as a department store, specially designed, glass cases
adorn the lobby, housing museum-like objects and collections
such as vintage hats, while also acting as space partitions.
Many of the building’s original wood floors are intact, while 100-
year-old beams taken out of the original structure during
demolition have been repurposed in walnut bedframes in the
guestrooms.
Quirk Gallery, from which the hotel gains much of its inspiration, plans to open in its new location in a three-story building adjoining the hotel on Saturday, Sept. 19. The gallery is connected to the building via a courtyard. Katie Ukrop has owned the gallery for 10 years, while husband Ted’s family owned the former Ukrop’s grocerty store chain, the region’s No. 1 grocery store prior to its sale. They are the developers behind the hotel/gallery project along with Christian Kiniry of Bank Street Advisors.
What makes Quirk different is the artistic experience it plans to offer with the gallery that will feature local and regional artists along with other items made by artists that will be available for purchase throughout the hotel. Art will also hang in guest rooms that have been painted in hues of a neutral gray or a salmon pink color that’s called Love and Happiness.
Quirk also has an artist-in-residence program. The hotel’s first artist in residence is Leigh Suggs, a 2015 Virginia Commonwealth University Craft Materials MFA graduate with a concentration in textiles. She will be in residence until January 2016.
Destination Hotels, based out of Englewood, Colo., will manage the hotel. The general contractor is W.M. Jordan Co. Portsmouth-based TowneBank is the lender. 3north Architects designed the project and Poesis did the interior design.
Ocean carrier CMA CGM has signed an agreement with the Port of Virginia to add the Port of Richmond as a destination for shippers booking cargo on its ships.
That means importers and exporters can book their cargo to travel through Richmond, whereas before they could only book it through Norfolk, explained Port of Virginia spokesman Joe Harris.
Currently, barge service is offered between Port of Virginia’s largest marine terminals in Hampton Roads — Norfolk International Terminals and the Virginia International Gateway — and the Port of Richmond. The barge service is growing and currently is offered three days a week. Harris says that may soon grow to four times a week as volumes grow.
CMA CGM joins several other large carriers offering Richmond as a destination.
The Port of Virginia has a five-year lease that ends this year, but it is renegotiating that lease with the city. “It fits in our efforts to secure a long-term lease at that facility, and if we do then you’ll see some significant investment in the facility,” says Harris.
According to an article from the Richmond Times-Dispatch, the Richmond City Council has received three bids to lease the port. The council is expected to make a decision later this month.
Richmond-based Media General Inc. announced Tuesday it will acquire Des Moines-based Meredith Corp. for $2.4 billion, creating the third-largest local television station owner in the country.
Media General has created a new holding company, which after closing will be named Meredith Media General.
The company will maintain corporate and executive offices in Richmond and Des Moines but will be incorporated in Virginia.
J. Stewart Bryan III, the current chairman of Media General, will be chairman of Meredith Media General. The 12-member board of directors will include eight Media General-appointed directors and four Meredith-appointed directors.
Stephen M. Lacy, chairman and CEO of Meredith Corp., will become CEO and president of the new holding company. Joseph H. Ceryanec, current vice president and CFO of Meredith, will become chief financial officer. The remainder of senior management will be a combination of Meredith and Media General executives.
The combined company is expected to have annual revenues of $3 billion and initially own 88 televisions in 54 markets that will reach 30 percent of television households in the U.S. The company will be required to swap or stations in six markets to address regulatory considerations. Meredith also owns brands including Better Homes and Gardens, Allrecipes, Parents and Shape.
The transaction has been approved by both boards of directors of Media General and Meredith. It is subject to approval by shareholders of both companies and the Federal Communications Commission. The transaction is expected to close by June 30.
Media General shareholders will receive one share of the new holding company for each share of Media General that they own. Meredith shareholders will receive $34.57 in cash and 1.5214 shares of the new holding company for each share of Meredith they own upon closing. After closing, Media General shareholders will own 65 percent and Meredith shareholders will own about 35 percent of Meredith Media General’s fully diluted shares.
Under terms of the agreement, Meredith shareholders will receive cash and stock valued at $51.53 per share, 12 percent above Meredith’s closing price on Sept. 4.
Virginia’s junior senator has been able to call his congressional colleagues “cowardly” without alienating them.
His thoughtful approach to government and his ability to navigate thorny issues with his Senate colleagues has earned him a lot of respect, says Sen. Mark Warner, a fellow Virginia Democrat, who has known Tim Kaine since they both attended Harvard Law School. Kaine served as lieutenant governor when Warner was Virginia’s governor.
“[His optimism] and intelligence and good humor he brings to every issue earns him a lot of respect on both sides of the issues,” says Warner. “He’s able to push a point in a non-in-your-face way….there are many times I wish I could do it his way.”
Kaine became governor in 2006 and was elected to the Senate in 2012. Since he took office in 2013, Kaine perhaps has been most vocal on his insistence that Congress vote on whether to authorize military force against the self-proclaimed Islamic State in Iraq and Syria (called ISIS or ISIL). He hasn’t been afraid to criticize the Obama administration on the issue.
“His lead on the use of military force in the Middle East against the administration’s plan earned him tremendous credibility,” says Warner.
Kaine says that, if Congress is asking the country’s service men and women to risk their lives, then it should be willing to face the political ramifications of an open debate about the use of military force. “I think we ought to authorize military action against ISIL with some conditions, but I don’t think we ought to be asking people to risk their lives without Congress doing our job,” Kaine says.
The senator also has been outspoken about the need for reauthorization of the Export-Import Bank, which lends money to U.S. exporters and their foreign customers. The bank, created during the Great Depression, has been opposed fiercely by tea party-leaning Republicans, who view it as corporate welfare. The bank’s charter expired June 30, meaning it can make no new loans.
Since this interview, the Senate voted in favor of reauthorization of the Export-Import Bank as part of a larger highway-funding bill, but that provision was removed from the legislation by the House of Representatives.
Kaine also has been a proponent of a bill designed to give President Obama a better chance to negotiate global trade deals. The U.S. is involved in ongoing discussions surrounding the Trans-Pacific Partnership, which would include 12 countries on both sides of the Pacific Ocean, such as Japan, Malaysia, Australia, Canada and Mexico.
The “fast-track” authorization means that, when the trade deal is presented to Congress, it will be required to make an up-or-down vote and cannot amend the treaty. Kaine long pushed for this authorization for the president, but that position has pitted him against many House Democrats who almost derailed the legislation in June.
Kaine has said the trade deal could help Virginia exporters but adds that determining any positive or negative effects on the commonwealth will have to wait until the terms of the treaty are presented to lawmakers.
Because of its large military presence and abundance of defense contractors, Virginia’s economy could take a major blow if Congress doesn’t find a way to avoid sequestration by Sept. 30. Kaine has been at the forefront of efforts to prevent another round of sequestration, automatic federal spending cuts that will be triggered if a budget deal is not reached. A compromise budget bill passed in 2013 lessened the impact of the first round of sequestration cuts, but state leaders fear the second round could be even more damaging.
“As of today, 95 of the 100 senators are on the record saying the budget gaps imposed by sequester are bad for the country, and we ought to find an alternative,” says Kaine.
Virginia Business discussed these and other issues with the senator in early July in his Washington, D.C., office.
Virginia Business: You’ve been on the forefront of efforts to avoid the expiration of the Export-Import Bank’s charter. Now that the [Export-Import Bank] has expired, do you see a way forward for that and what are you hearing from Virginia businesses on how this will affect them? Kaine: Well, Virginia businesses have been very helpful in getting us stories and ammo we can use with our colleagues, and sadly, this one is a weird partisan issue. Who would have believed it? The Democrats all support Ex-Im Bank reauthorization…I mean it’s overwhelming support. So, why do Republicans oppose this very pro-business tool to help businesses find export customers? I just don’t get it. It’s not because it takes money out of the Treasury, because it puts money into the Treasury. It’s not because it replaces private lending because the private lending institutions are coming in and saying, “Do this.”
It’s a mystifying issue to me. Now, the Virginia businesses have been really good. I mean I’ve got agricultural businesses in the Shenandoah Valley. I’ve got manufacturing firms like Bristol Compressors down in the southwest and all over the state. You know, Boeing has a huge presence in Northern Virginia…So, we’ve got a lot of good business support for Ex-Im Bank reauthorization…
The key is we’ve just got to get it done. There’s just no reason to let this go, this great institution that has been in place since the 1930s that other nations have. They have their versions of the Ex-Im Bank. Why would we want to unilaterally disarm in this quest for export markets? I’m going to do all I can. I’ve written op-eds about this and been strongly supportive of Ex-Im Bank authorization since I came into office, and I’m going to continue to do it.
VB: Also important for Virginia businesses could be the Trans-Pacific Partnership. How do you think a trade deal like this could help Virginia businesses, and is there concern as to how it might affect Virginia manufacturers? Kaine: I think the real issue is you’ve got to see the deal. I voted for a Trade Promotion Authority to give the president the maximum leverage to negotiate the best deal for American businesses, workers and farmers. Because I think Virginia agriculture has a lot of potential upside in the deal. But the bill that we voted on, the Trade Promotion Authority, just gives basically the president tools to negotiate the deal, requires him to bring it back, and then when it comes back, there will be a period of somewhere between 90 and 120 days where the deal will be on the table.
[Under the law, it can’t be amended], so everybody gets a chance to look at it: the press, the public, labor, environmentalists, businesses, members of Congress. We all get a chance to look at it and debate it. We have to decide: Does it do the right thing to promote Virginia jobs and American jobs?
I think that the key for us, and the reason why deals like this can make sense, is that trade is going to happen. It is going to happen, and it’s already happening. The only issue is whether the rules surrounding trade will be rules that will be favorable to us. That will require elevated standards for environment, worker safety, labor protections, intellectual-property protection. And if we are helping write the rules, they’re more likely to have those higher standards. If we don’t, trade will still happen. It will just be according to lowest common denominator rules that are much more likely to hurt Virginia manufacturers. And hurt others.
I do think, in Virginia, we have some unique assets that enable us to really take advantage of global trade [like the Port of Virginia and Washington Dulles International Airport]. But I think Virginia has benefited tremendously in my lifetime by trade. Trade has cost us jobs, too. You know, we’ve lost jobs because of trade, in textile and furniture, especially, but in some other manufacturing areas, too. But while we’ve lost jobs, we’ve also seen industry sectors in Virginia that have dramatically expanded because of trade.
VB: One thing we’re concerned about is sequestration cuts. I was wondering how likely you think it is that we could avoid the next round [of sequestration.] Looks like it could be especially difficult for Virginia. Kaine: Sequestration affects Virginia more than virtually any other state. Between federal employees who live in Virginia [and] defense contractors who are part of the defense-side budget, we get affected very dramatically.
I worked very hard on the Murray-Ryan [budget deal that avoided about half of sequestration cuts in 2014 and 2015], a two-year deal that runs out on Sept. 30. We need to find a budget alternative to sequester, and I’m with working with a small group of Democrats and Republicans right now to do that.
You know, the Murray-Ryan budget deal was a classic compromise. Democrats didn’t get everything they wanted. Republicans didn’t get everything they wanted, but we found a compromise, and it was the right thing for the country, the right thing for our national defense and the right thing for other key priorities.
We need to do the same thing this year, so between now and Sept. 30, that’s a task that we have. Because I’m a member of both the Budget and Armed Services committees, I’m very engaged in that effort to find the alternative to sequester. As of today, 95 of the 100 senators are on the record saying the budget gaps imposed by sequester are bad for the country, and we ought to find an alternative. There is significant support for the general proposition, but finding the alternative itself that will get 60 votes in the Senate is what we’re working on now.
VB: You mentioned that you sit on the Armed Services Committee. We talked about sequestration, is there anything else that you think Virginia should be concerned about or excited about? Kaine: I would say a concern is sequestration, and that’s a huge one, but there are some real opportunities. There are huge opportunities in the unmanned aircraft space that a number of Virginia companies … have been doing some of the real pioneering work. Those innovations have civilian uses, not just military usages.
There are some new military platforms that could be built in Virginia. As an example, we will do, within the defense budget, a replacement for the Ohio-class submarine. Ohio is an attack-class submarine…The Ohio-class submarines have not been built at the shipyard down at Huntington Ingalls [in Newport News]. They build the Virginia-class subs and [nuclear-powered aircraft] carriers, but because of the success of Huntington Ingalls with Virginia-class subs, there is a significant chance in the future when we build Ohio-class replacements that that could be a new line of work for the shipyard…
We’ve got a tremendous need to up our game when it comes to cyber. We’ve got a lot of expertise in Virginia. You might see more of the military budget moving over into the cyber side, and I think Virginia has some prospects there.
VB: You’ve taken a tough leadership stance on military authorization fighting the Islamic State. Have you been able to gain any traction? Kaine: The only vote that has been held really on an authorization was in the Senate Foreign Relations Committee that was held on my bills and others that were voted out of committee, but it got no floor action, and, when the Congress changed hands in January, that expired. Now I’m pushing this in this Congress…
We are now really engaging on the discussion on authorization. We’ve had a series of closed-door committee meetings after a series of open-door hearings…exploring: Can we come up with a bipartisan authorization?
Above all else, we need to authorize it. We shouldn’t let presidents start wars without votes of Congress. But, second, the authorization, to be really successful, should be as bipartisan as possible. And since both Democrats and Republicans support military action against ISIL, we ought to be able to find a bipartisan path forward.
There are some important points on which there are legitimate differences of opinion. Should you use American ground troops or not?…I am working with my committee colleagues. You know, it’s always better to try to work within and get your colleagues to do it, but I’m also frankly raising hell about it in speeches on the floor and in the public to try to say this is Congress’ job. …
[This morning] there was an Armed Services hearing about the strategy against ISIL and all these people were criticizing the administration, all the senators were. When it got to me, I said, “Hey, I’ve got some criticisms, too, but let’s be honest. My criticisms of the administration’s strategy are small compared to my criticisms of this institution, because it’s the Congress that’s supposed to be authorizing war.”
But what Congress seems to want to do is not have the debate, so we don’t own it. We’re not responsible. We don’t have to have the backbone to cast a vote. Then we can just sit back and criticize…We’re not that legitimate as critics when we aren’t providing a meaningful budget because of sequester, and we won’t even do the job of authorizing war…
VB: And you were in the Middle East? Kaine: Yes, I just got back. I went with six members to Iraq and Turkey. In Turkey we really were right on the border of Syria….And I came back even more convinced that Congress needs to engage, especially because of our troops. We’ve got troops overseas from Virginia, who are over fighting against ISIL. There are many Virginians in this 3,500 that are there. And they deserve to know that Congress cares…If they’re risking their lives, then we ought to at least be able to have a debate and vote on whether the mission is worth it. Because if we’re not willing to say the mission’s worth it, then how dare we ask them to go risk their lives to fight this enemy. I think the mission is worth it. I think we ought to authorize military action against ISIL with some conditions, but I don’t think we ought to be asking people to risk their lives without Congress doing our job.
VB: [What’s the environment in the Senate like?] I mean from the outside it appears like it’s just partisan vitriol all the time. Is that how you feel? Kaine: You know, I actually….I’ll be kind of blunt. I think the interpersonal relationships are warmer and friendlier in the Senate than they are in the General Assembly right now.
VB: Really? Interesting. Kaine: Yeah, I do. I worked on the [Iran Nuclear Agreement Review Act, which allows Congress to review a nuclear agreement with Iran]. Very tough issue [about] under what conditions would a diplomatic deal with Iran be a good deal in terms of their nuclear program. But I worked with Senator Bob Corker, [R-Tennessee], on a bill that we got through the Senate 98-1…
And I mean from the very first day I got here, even though there are some really hard issues and things that I find mystifying — like why would Democrats support Ex-Im Bank reauthorization and Republicans be all opposed to it. I just don’t get that. So there are frustrations here, but I actually think the warmth of the personal relationships in the Senate, I think that my observation is that they’re probably a little warmer and a little closer than in the General Assembly.
VB: And that’s from when you were there or now? Kaine: From when I was there. I don’t know it so well now, but what I’ve seen from afar doesn’t suggest to me that it’s changed that much.
On a warm, calm morning in late July, Capt. Dave Culbertson steered his 93-foot tugboat alongside the massive Northern Javelin, a container ship longer than the Eiffel Tower is tall, as it neared the Port of Virginia’s marine terminals. The ship slid slowly though the Elizabeth River, traveling no more than 8 or 9 knots per hour to minimize the draft under its massive hull.
Culbertson’s tug, the Payton Grace Moran, and its sister tug, the George T. Moran, had been chosen to help dock the behemoth vessel at the Virginia International Gateway in Portsmouth, a Port of Virginia-operated marine terminal. These tugboats had a big job to do — pushing and pulling the ship to help the bridge team turn it 180 degrees in the Elizabeth River and dock at its assigned berth.
Culbertson’s calm demeanor reflected his 28-year career spent on tugboats, which are designed to help ships dock in all types of weather and conditions. As he guided his tug to his assigned position toward the stern of the ship, he handled several tasks at once: listening on the radio to instructions from the ship’s docking pilot, controlling the tension on the winch line attached to the huge vessel, navigating the channel and steering the ship against the strong pull of the Northern Javelin’s draft.
Although these tugs look like toy boats compared with the Northern Javelin, they are some of the largest and most technologically advanced tugboats available, capable of docking the largest ships in the world. Both boats, part of Moran Towing’s fleet, have 6,000-horsepower engines — more than 20 times the power of large SUVs. “Not many tugs around in the U.S. are bigger than this,” says Culbertson.
This is just one example of how the increased use of mammoth vessels is changing the maritime industry. From the increased precision required to steer these ships into port to the handling of their vast cargos, the effects of these larger vessels are rippling throughout the industry.
The Northern Javelin is a Post-Panamax vessel, the name for ships too large to travel through the Panama Canal. The port is now seeing visits from these massive ships almost daily.
While the ships strain the supply chain, they offer Virginia an opportunity to become a pre-eminent East Coast port. The shipping industry continues to use larger and larger ships, and other East Coast ports are rushing to match Virginia’s 50-foot-deep channel.
As the ships get larger, the maritime community is pushing forward with an initiative to dredge the channel to 55 feet — giving the port more leverage over others on the East Coast in handling these vessels when fully laden. “That’s the most significant thing for the Port of Virginia when you compare us with the U.S. East Coast ports,” says Art Moye, executive vice president of the Virginia Maritime Association. “It’s what will set this port apart from the other East Coast ports. It’s the game changer.”
The surge in larger ships
As ocean carriers look for greater economies of scale, container ships are getting bigger at a quickening pace. Today, the world’s largest ships can carry twice the number of containers that the big ships did just 10 years ago.
Ships larger than 5,000 TEUs — a vessel size that can fit through the Panama Canal — make up one-fourth of the worldwide container fleet, according to June stats from Lloyd’s List, a London-based maritime and shipping news journal. Nonetheless, these huge ships represent 59.7 percent of the total shipping cargo capacity — and even larger ships have been ordered. (A TEU is a standard shipping measurement that stands for 20-foot equivalent unit. Most shipping containers today are two TEUs.)
Lloyd’s stats showed that, of the container ships on order, 55.3 percent are bigger than 5,000 TEUs. (The largest ships in service now measure over 19,000 TEUs, which travel Asia-Europe service lines. None of the ships now visiting the U.S. approach that size.)
Leaders in Virginia’s maritime community anticipated the trend toward larger vessels, digging its channel deeper than any other East Coast port 10 years ago and adding modern cranes that could reach across these massive ships.
Post-Panamax vessels started visiting the East Coast three or four years before they were anticipated — and well before the completion of the Panama Canal expansion, which is scheduled to occur next year. Traveling through the Suez Canal, these ships carry containers between the East Coast and Asia.
Now vessels nearly 1,100 feet long, with the ability to carry 8,000 or 9,000 TEUs, are visiting the port almost daily. When fully laden, ships such as the MSC Bruxelles with a 9,700-TEU maximum capacity, require more than a 48-foot draft as they leave the port — getting pretty close to the channel’s 50-foot bottom.
And so, the maritime community is putting renewed efforts into a project to widen the Norfolk channel on the Elizabeth River, dredge the channel to 55 feet and dig the channel on the Southern Branch of the Elizabeth River to 45 feet.
The Port of Virginia and the U.S. Army Corps of Engineers Norfolk District have signed a cost-sharing agreement to study the benefits of the dredging projects. The Virginia Maritime Association hopes construction can begin on the project by 2020.
Steering the ships
The Hampton Roads maritime community has had to adjust rapidly to the introduction of these big ships. For example, they require more precision in their handling and scheduling.
“They’re definitely a challenge,” says Capt. Bill Cofer, president of the Virginia Pilot Association. “The size of these vessels is such that our channels weren’t completely prepared for two-way navigation of these big ships.”
That means that the communication between the harbor pilots, docking pilots and port terminals has to be done well in advance. Any error in scheduling could end up blocking the shipping channel. “The coordination between the terminals and the pilots has got to be stronger than ever,” says Cofer.
The Hampton Roads’ harbor pilots climb aboard these ships at Cape Henry, where the Atlantic Ocean meets the Chesapeake Bay, and then guide them through the local waterways.
The steering of these ships is more difficult because of the amount of water being displaced, and therefore the ships must travel more slowly.
Before they reach their assigned berth at one of the marine terminals, ships are met by tugboats with docking pilots. They instruct the tugs in helping dock the ships.
The larger the ships, the tighter the turns, says docking pilot John Guess, who was assigned to dock the Northern Javelin. He notes that — while every job is different depending on the type of ship, the weather and the wind — the largest ships “[have] slowed everything down a little,” Guess says. “You can’t make a turn like you used to.”
Moran Towing, the owner of Payton Grace Moran and the George T. Moran, uses modern, clean-burning tugs to help move the big ships. “We’ve been seeing larger ships consistently for the last few years, and they’re going to get bigger still,” says Mark Vanty, vice president and general manager of Moran’s Virginia division. “We have the flexibility to respond to our customer demands.”
Experienced tugboat captains and docking pilots are essential to keeping ships from running into trouble while docking. These ships don’t operate like a car: They can’t stop or turn on the dime.
For example, a few weeks ago a small ski boat that had lost its power was anchored in the middle of the channel overnight. It took last-minute maneuvering by the pilots and the tugs to avoid the boat.
Effects continue on shore
Once docked, the effects of these big ships also are felt on shore.
With more boxes on board a ship, it takes longer for longshoremen to load or discharge them. “The bigger ships mean longer hours,” says George Brown, president and CEO of CP&O, a stevedore at the port terminals.
Previously, longshoreman could work a vessel in nine to 10 hours. Today’s larger ships can require anywhere from 15 to 24 hours to work, says Brown.
Longshoremen’s average workday is 10 hours, but if a vessel requires 15 hours, they often stay to finish the job.
More cargo at terminals means ample opportunities for work. “People can get up to 70 or 80 hours of work a week if they want to work outside of their own gang,” says Brown.
About six or eight months ago, the maritime industry had to add more than 200 longshoremen to handle the increased cargo traffic.
Terminal congestion earlier this year sometimes left truckers with eight-hour waits to drop off or collect cargo. That situation, however, was caused more by an influx of cargo rather than the introduction of the larger vessels, port officials say. In fiscal year 2015, the Port of Virginia’s cargo volume grew 8.9 percent to a record 2.5 million TEUs.
The West Coast, however, has seen delays because of the visits of mammoth vessels that haven’t yet visited the Port of Virginia. Some of these ships require a week of work by longshoremen before they could leave port.
“There have been a lot of issues impacting congestion,” says Katie Carney, director, international and customs compliance in Livingston International’s Norfolk office. “Larger vessels, vessel bunching and equipment imbalance. The East Coast took on additional vessels from the West Coast coupled by some larger vessels that impacted the congestion on the East Coast. I do not think our infrastructure is prepared to take on this additional work.”
This past winter, the Port of Virginia terminals were especially congested because of labor disputes on the West Coast and a snowy winter in the East that closed the Virginia port for several days. But the West Coast’s issues could be a warning sign for the Virginia port.
The port has taken a number of steps to try to avoid tie-ups, including the purchase of additional equipment, tweaks to operations and the reopening of Portsmouth Marine Terminal to container traffic. “The vessels are getting bigger, and more and more are taking advantage of Virginia’s deep water,” says port spokesman Joe Harris. “So we are assessing all areas of our operation to ensure that we are prepared for volume increases that will be brought by a number of factors.”
Better planning
The effects of larger vessels are making freight forwarders busier than ever.
The larger ships require companies handling the logistics of international shipping to begin their planning earlier, track shipments more closely and often scramble to find an available motor carrier.
“We really are doing our planning much earlier than we used to,” says Carney. “There’s a lot more communication. It takes a lot more staff to do this work, a lot more talented staff.”
The larger ships, coupled with shipping alliances that allow ocean carriers to use each other’s vessels on certain trade routes, make planning more difficult for manufacturers. Their shipments may end up bunched together rather than spread out, affecting trucking schedules as well. “That becomes a logistics problem also down the road because then you have importers and shippers that tend to get everything on one vessel instead of getting everything spread out,” says Carney.
The situation also is affecting truck drivers’ schedules. “In the past, a trucking company may have a customer that had containers coming in dispersed throughout the week,” says Ed O’Callaghan, who owns Audax Transportation, an agent of Century Express. Now they are bunching up, and motor carriers are requiring earlier and earlier planning.
The increased cargo volumes at ports also are making it more difficult for shippers and motor carriers to avoid detention fees and demurrage charges — which are charged for having a shipping container out too long or on a port terminal.
Some of the shipping lines have begun to charge as much as $175 to $275 per day. Demurrage charges and detention fees have been so high that the Federal Maritime Commission is investigating them.
To handle larger ships, O’Callaghan says, the schedules of truck drivers, warehouses and distribution facilities should match the maritime community’s 24-hour routine. “With that vessel being in the port longer, it’s going to require people to change their behavior in work days. We need the warehouse and distribution facilities to adjust to the timing to coincide with the operation of these big ships.” O’Callaghan adds this already is the practice on the West Coast.
He notes that his drivers are starting to see improvements at Virginia’s marine terminals because of recent equipment purchases, but he believes new procedures and operations now in place will be tested when volume likely picks up this fall.
Jeffrey Heller, vice president of intermodal and automotive of Norfolk Southern Corp., agrees. He says the railroad wants containers to get from ship to train in less than 24 hours. “It’s not as easy as it sounds,” says Heller. “The matter of fact is that, as the business grows, the port will need to ramp up and lift more boxes in a 24-hour time period. I think we’re going to get tested this fall.”
Rail freight continues to grow for Norfolk Southern, which along with CSX Corp. is one of the two primary railroads serving the Port of Virginia’s terminals. In 2010, the railroad completed The Heartland Corridor, which raised tunnels and removed other obstacles along a route to the Midwest, cutting off 250 miles for double-stacked container trains to reach Chicago.
“The good news is [the Heartland Corridor] is really being tested,” says Heller. Norfolk Southern serves both Norfolk International Terminals and Virginia International Gateway in Portsmouth. Freight in Virginia is up 3.5 percent over last year, and much of that comes from traffic along the Heartland Corridor, he says.
Opportunity amid growing pains
Despite its ripple effects through the supply chain, the larger ships present an opportunity for Virginia. Virginia is the only East Coast port with authorization to dredge to 55 feet.
The largest ships visiting the Port of Virginia today are about 9,700 TEUs, and port officials expect to see 12,500-TEU ships in a year. But local maritime experts don’t expect next year’s completion of the Panama Canal’s expansion to bring a bonanza of larger ships.
A more significant event for Virginia could be the raising of the Bayonne Bridge at the Port of New York, which is scheduled to be completed in 2017. “At that point the carriers could employ even larger ships for the U.S. East Coast,” says Moye of the Virginia Maritime Association. “They’re not going to put a ship in service just for Norfolk.”
And as these ships continue to get larger, at 55 feet, Virginia could be the only port able to accommodate these massive ships when fully laden.
As it moves through its current growing pains the port has the potential to be a major East Coast player in international trade.
“What the 55 feet allows Virginia to do,” says Cofer of the Pilot Association, “is to be the only Port of Virginia on the East Coast of the United States that can bring in the global fleets, not just of today, but clearly the future will be these gigantic ships.”
The Fahrenheit Group, a full-service advisory firm headquartered in Richmond, has hired Michelle Cann as chief operating officer.
In the new position for the firm, Cann will be responsible for operations of the firm, including coordination across its practice areas. She also will have a leadership role with the firm's fractional finance and accounting practice and provide technical and project support to finance and advisory initiatives.
Cann previously was a partner, internal relations at Gallagher, Flynn and Co. LLP, a 70-employee CPA firm located in South Burlington, Vermont.
The Commonwealth for Advanced Logistics System (CCALS) and the Port of Virginia are joining together on a research project to find operational efficiencies.
Under the agreement, a CCALS researcher will be located at the port this fall and will first focus on vessel berthing and scheduling processes. Additional projects are expected.
“The Port of Virginia is one of the few East Coast ports ready today to handle larger vessels expected to utilize the newly expanded Panama Canal,” John F. Reinhart, CEO and executive director for the Virginia Port Authority, said in a statement. “As such, we expect a significant increase in traffic and volume. In order to meet these demands now and in the future, we have to pursue every avenue to operate our terminals as efficiently, effectively, and as safely as possible. Connecting with the knowledge-base and experience at CCALS is an innovative solution that will help steer our efforts to further refine our berthing and scheduling processes.”
CCALS’ recent initiatives include a renewable energy evaluation for government consulting firm LMI and an aviation biofuel supply chain study for the Center for Innovative Technology.
Kaplan Voekler Cunningham & Frank PLC has a new partner.
The Richmond-based law firm promoted T. Rhys James to partner. James practices in the areas of business, corporate, mergers and acquisitions, securities and real estate capital law.
James is a graduate of the Marshall-Wythe School of Law at the College of William & Mary.
Automotive supplier Continental is planning a $49 million investment in its Culpeper County operation.
The investment is part of three-phase project to modernize the facility, designed to increase productivity and add the manufacturing capability of a new type of braking system.
Virginia competed against Mexico for the project, which could create up to 25 jobs.
Gov. Terry McAuliffe approved a $175,000 grant from the Commonwealth’s Opportunity Fund to help Culpeper with the project. McAuliffe also approved a $550,000 performance-based grant from the Virginia Investment Partnership Program, which is administered by the Virginia Economic Development Partnership.
Last August, Continental announced a $152 million investment in its Newport News operations, which was expected to create 500 new jobs.
“Thanks to the generous support of state and local officials, we are please to announce this intended investment,” Jeff Klei, president of Continental North America, said in a statement. “We remain dedicated to advancing technologies in our facilities and enhancing our manufacturing capabilities in North America.”
Virginia Tourism Corp. (VTC) is planning to air at least 500 commercials across the country during the upcoming UCI Road World Championships in Richmond in September.
The 30-second commercials will be aired on Universal Sports, NBC Sports Network, CNBC, and NBC. The spots will feature Virginia’s travel experiences, such as outdoor recreation, beaches, mountains and culinary scenes before a large audience tuning in to see the bike race.
The commercials are part of a $2 million partnership between the VTC and Richmond 2015, an independent nonprofit corporation responsible for the organization and marketing of the 2015 UCI Road World Championships.
“The tourism industry is an important component of building a new Virginia economy, and the UCI World Championships present a tremendous opportunity for the commonwealth to drive economic development, promote tourism, and showcase Virginia as a premier travel destination to consumers worldwide,” Gov. Terry McAuliffe said in a statement.
The “Virginia is for Lovers” brand will be featured throughout many aspects of the 10-day championships, including the finish line, time trial start ramps, sign-in stage, awards podium, press conference backdrops and event credentials.
This is the first time in nearly 30 years that the race has taken place in the United States. Event staging and visitor spending are estimated to contribute $158 million in economic impact.
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