The Virginia Port Authority Board of Commissioners announced Thursday evening that Jerry Bridges, who has headed the state agency since 2007, will step down as port director at the end of October.
In January 2011, Bridges received a six-year contract extension.
“In so many different ways Jerry has done a lot of good for this port and for that we all thank him,” VPA Chairman Michael Quillen said in a statement. “Through his work, his connections across the globe and his service on various industry boards, he has helped to raise the profile of this facility and for that we are grateful. We wish him well in his next endeavor.”
The Board of Commissioners is looking for an interim executive director, the statement said.
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Bridges’ departure comes as Republican Gov. Bob McDonnell’s administration considers three proposals to privatize the state-operated port facilities in Norfolk, Portsmouth, Newport News and possibly Richmond, Va., as well as an inland port for intermodal cargo in Front Royal.
Officials are reviewing an unsolicited proposal by APM Terminals to manage port-wide operations under a long-term concession, as well as proposals from Deutchshe Bank’s real estate investment arm RREEF and the Carlyle Group, a private equity fund, after the state opened the door for alternative bids.
Virginia is the third largest container port on the East coast after New York and Savannah, Ga. It is one of the few operating ports in the nation, with cargo handling at terminals managed by its non-profit arm Virginia International Terminals.
APMT’s proposal is unprecedented in that it seeks to take control of an entire port instead of an individual terminal.
The VPA’s statement gave no reason for Bridges’ departure. But in an interview Friday with American Shipper, Quillen said Bridges recognized that his role was likely to change no matter how the review of the public-private partnership proposals turns out and opted to look at other career opportunities.
A state board that is examining the three proposals is scheduled to make its recommendations on which, if any, of them to accept at the VPA’s November board meeting.
The structure of the port authority would significantly change if the port is run by an independent company, but there would also be changes if the state sticks with VIT as the operator, Quillen said.
The board is interested in a new relationship between the VPA and VIT that could result in cost efficiencies, as well as improved marketing, economic development and administrative functions, he said. The goal, Quillen said, is to make the Port of Virginia “more efficient at serving the customers.”
Negotiations on a buyout of Bridges’ contract are still underway, Quillen said.
Efforts to contact Bridges were not successful. An assistant in his office said he was on vacation and unavailable.
Two years ago, administration officials ended consideration of three bids to operate the marine terminals, including one from Carlyle, because they were not high enough.
APMT says the value of its offer to run the Port of Virginia for up to 48 years is worth $3.2 billion to $3.9 billion.
It is the third time in three years that the terminal operating arm of A.P. Moller-Maersk, and sister company of the container vessel operation Maersk Line, has changed its strategy in Virginia. The company originally built a $540 million greenfield facility in Portsmouth that is widely considered the most technologically advanced container terminal in the United States.
But the private facility, which opened in 2007, struggled to meet volume expectations in the face of aggressive competition from the VPA and the downturn in trade that resulted from the recession. Three years later, APMT leased its facility to the Virginia Port Authority to be operated by Virginia International Terminals for 20 years in return for annual payments of $40 million and revenue sharing if volumes exceed certain levels. Consolidating Norfolk International Terminals and the APMT facility under one roof gives the port operational flexibility and better power to market services to liner carriers and shippers. Now, APMT has come full circle and seeks to take over much of the VIT’s role, while transferring ownership of its Portsmouth Terminal to the state of Virginia.
Bridges was hired to lead the Port of Virginia after serving as executive director of the Port of Oakland. Among his accomplishments was bringing privately-owned APM Terminals under the Port of Virginia’s control, leading the reorganization of the port’s staff to focus on customer service, and making infrastructure investments to prepare for the arrival of larger ships associated with the upcoming widening of the Panama Canal. Bridges is the current chairman of the American Association of Port Authorities.
During his tenure, Norfolk Southern has removed height obstructions on a more direct route for double-stack intermodal containers between the port and Columbus, Ohio, while CSX has also brought double-stack service to the APMT facility.
Last year, the VPA took the novel step of “annexing” the almost-dormant Port of Richmond from the city in an effort to drive more traffic there by supporting more container-on-barge services to and from its marine terminals that serve oceangoing vessels, reducing highway congestion in the process.
In July 2011, Gov. McDonnell replaced the 10 Democrat port commissioners with Republicans on the grounds that they lacked the business savvy to propel increases in the state’s cargo volumes. Quillen, then the chairman of coal producer Alpha Natural Resources and a McDonnell political contributor, was the lone holdover.
It is common for states and localities to replace port authority commissioners, but there have not been any cases in recent memory when an entire board was swept out.
Virginia officials said a new board with a wider range of expertise was necessary because cargo volumes at the Hampton Roads terminals had languished since the recession despite a state-of-the-art facility, the only unobstructed 50-foot channel on the East Coast and a pro-business labor environment in the state, while throughput at other East Coast ports had recovered to pre-recession levels.
Administration officials also blamed the board for focusing too much on expansion projects rather than operating efficiency, marketing and profitability, noting that all the marine terminals were underutilized.
Despite the stated concerns with the previous board, which often followed Bridges’ recommendations, Secretary of Transportation Sean Connaughton expressed strong support last summer for the job Bridges has done.
After reaching an all-time high of 1.22 million TEUs in 2007, container volume at the port dropped 17 percent in 2009 to 992,543 boxes. Business rebounded 8.9 percent in 2010 to 1.08 million TEUs and 2 percent last year to 1.1 million TEUs. Through July, the Port of Virginia has enjoyed a 5.8 percent increase in volume to 676,640 TEUs, compared to the same period in 2011. The port has set monthly container records for three straight months.
The Port of Virginia’s ability to expand container traffic has been significantly impeded by Chinese bans on imports of Virginia lumber and poultry. The Chinese government last year prohibited lumber from Virginia from entering the country after authorities discovered a shipment with pests. A long-standing Chinese ban on poultry has also hurt Virginia
In June, the Chinese government agreed to allow hardwood and softwood exports from Virginia to resume on a six-month trial basis after being satisfied by treatment and inspection protocols at the port and elsewhere.
Last year the Virginia General Assembly also passed tax credits for shippers who use the port’s container terminals, or barge and rail transport. The subsidies are not as generous as those in place in Georgia, North Carolina and South Carolina, but are expected to narrow the advantage ports in those states have in attracting shipments and distribution centers. The tax credits expire in 2015 and 2016.
“This board will work closely with the VPA’s deputies to ensure continuity within the organization,” Quillen said. “The port has had a very solid performance since the beginning of the year and that will continue to be the focus: to build volumes and market The Port of Virginia as the East Coast’s premiere facility.” – Eric Kulisch
