U.S. Ports Beef Up Infrastructure Amid Volume Declines

     Bobby Phillips, SIOR, First Vice President, Global Supply Chain Solutions and an industrial specialist in Thalhimer's Newport News office, shares the latest information obtained from The Virginia Port Authority and his thoughts on the recent "National Real Estate Investor" article on U.S. Ports. 

"In June, The Virginia Port Authority executed a long-term lease of the APMT Virginia marine terminal effectively unifying all container cargo operations in the Hampton Roads harbor under the VPA flag for the next two decades. In summary, the lease agreement states the VPA will lease and manage all aspects of the operation of the APMT Virginia marine terminal located in Portsmouth for the next 20 years. 

This agreement coincides with the opening of several strategic cargo-driven transportation projects that will increase container volumes at the port during the next decade: 

• Norfolk Southern's (NS) Heartland Corridor double-stack rail link to Columbus and Chicago that opens in September
• The expansion of the Panama Canal, which is scheduled for completion in 2014
• The arrival of post-Panamax-class container vessels (exceeding 5,000 TEUs) in Virginia

The lease creates a series of efficiencies that will benefit the port: 

• Brings the newest, most technologically-advanced marine terminal in the Americas into the VPA fold
• Expands the cargo capacity of the VPA's terminals by nearly 1 million TEUs
• Provides immediate on-dock access and the related advantages to the East's two Class I railroads: Norfolk Southern and CSX
• Provides very distinct cost and capacity advantages when compared with other US East Coast ports

This all speaks obviously to the infrastructure improvements VPA is making/securing. 

As for the impact to the Hampton Roads commercial real estate industry,  the rate of absorption of warehousing/distribution space will increase as all these cost efficiencies are taken advantage of by U.S. corporations/retailers/manufacturers .  As a side note, I  currently do not see any impact on our local commercial real estate industry or port activity as a result of the current BP calamity."

Read the full article:   Daniel Beaird,  NREI Senior Associate Editor.  "U.S. Ports Beef Up Infrastructure Amid Volume Declines", National Real Estate Investor.  June 30, 2010