Virginia signs 10-year contract with CMA CGM
The Virginia Port Authority Wednesday said its operating company, Virginia International Terminals, has tied up a 10-year contract with CMA CGM one year after the French steamship line cut the ribbon on its new North American headquarters in Norfolk.
The 10-year contract, valued at more than $125 million, guarantees that CMA CGM will have an annual throughput at the VPA terminals of at least 55,000 containers. But Joe Dorto, chief executive officer and general manager at VIT, said in a statement that he expects CMA CGM to eventually exceed its minimum throughput requirement.
“In these long-term contracts that we’ve been working on it is generally understood that the carriers will exceed their contracted throughput,” Dorto said. “As I’ve said all along, these companies are guaranteeing their ability to grow at this port. The people at CMA CGM know that as their cargo volumes increase, they will not have any capacity issues in Virginia — they ‘ve got it in writing.”
On an annual basis, CMA CGM has had a throughput of 15,000 to 30,000 containers since the line began calling in Virginia in 2000. The vessels call at Norfolk International Terminals and at Portsmouth Marine Terminal.
“This is a very fast growing steamship line,” said Tom Capozzi, VPA’s senior director of marketing. “Since 2000, CMA CGM’s business here has increased 298 percent. We know this company has very aggressive growth plans, in terms of adding new services, and I think Virginia will figure prominently in those plans. We’re very pleased to have this business secured for the next decade.”
Dorto estimates that 70 percent of the port’s business is now secured with 10-year contracts — the port already has 11 such agreements in place with the Grand and CKYH alliances, China Shipping, Turkon, Mediterranean Shipping Co. and ACL.
“I think before the end of the year we will sign one or two more of these long-term contracts,” Dorto said.
In 2005, The Port of Virginia had its most successful year on record, handling 1.98 million TEUs.