Shots heard in Hampton Roads

   In 1862 the eyes of the nation were focused on Hampton Roads when the Civil War ironclads Monitor and Merrimac battled.
   One hundred and fifty years later we are waiting to see if the harbor becomes a battleground over port privatization or labor-management relations.
   APM Terminals, sister company to Maersk Line, made an offer in May that it says is worth about $3.2 billion to $3.9 billion. Under the proposed deal (see page 42 of this issue), it would transfer ownership of the terminal it built and opened in Portsmouth in 2007 to the state, and would operate all the Virginia Port Authority’s terminals for a period of 48 years.
   Sean Connaughton, Virginia’s transportation secretary, told American Shipper in mid-June that other companies have expressed interest in making alternative bids. We’ll know by July 12, which is the deadline the state set for receiving other proposals.
   (One consultant suggested some companies may be willing to make a competing bid and even put up earnest money just to gain access to a data room about the port.)
   The state could face a tough decision. 
   APMT is offering a lot of money, and Virginia has been an advocate for using public-private partnerships to improve infrastructure. Last year the state’s Department of Transportation opened an office to focus on these partnerships.
   At the same time, VPA and its operating arm, Virginia International Terminals, are well respected. The third largest port on the East Coast after New York and Savannah, VPA has grown container volumes from 1.4 million TEUs in 2002 to 1.9 million TEUs in 2011. Through the end of May, volumes are ahead of 2011’s pace by 4.3 percent. 
   And the port’s best days may be ahead. With completion of the Heartland Corridor and a 50-foot ship channel, the VPA is one of the best positioned ports to take advantage of the enlarged Panama Canal. 
     But already Maersk’s competitors, such as Hanjin and “K” Line, have expressed concern about the APMT plan, feeling in some way the Danish company would have a leg up on them.
   “While privatization has merit at times, it is our opinion that Virginia will be better served by emulating the Port of Savannah business model,” wrote Kazuhiro Matsukawa, president and chief executive officer of “K” Line America, to Connaughton. 
   “A well run port with open competition among terminal operators and stevedores coupled with a state economic development policy managed by the governor’s office pursuing importers and exporters to place their respective logistics infrastructure regional facilities within proximity of the port facilities will certainly enhance international business growth, create jobs, and generate revenue for the commonwealth. We do not believe APM Terminals has the resources, nor the intention to execute such a strategy to benefit the people of Virginia,” he said.
   With remotely operated automatic stacking cranes and other technology, APMT’s facility is generally regarded as the most technologically sophisticated terminal in the United States. But the company leased it to the VPA in 2010 after it was unable to attract business from other carriers, in part because VPA locked up nearly every potential customer with contracts.
   That technological sophistication is the other reason Hampton Roads terminal will likely be in the news this year. International Longshoremen’s Association President Harold Daggett has made opposition to automation a key issue during contract negotiations this year and he often uses the APMT Terminal in Portsmouth as the “poster child” for what he considers to be a threat to his members’ jobs. – Chris Dupin