THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Sunday, July 17, 1994 TAG: 9407160301
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Long : 121 lines
When the SafBank Lines cargo ship Padrone docked at Newport News Marine Terminal on Friday morning, it was the latest in a rising tide of new shipping services coming to the Hampton Roads port this year.
The South Africa-based ship line, in a joint venture with Switzerland-based Mediterranean Shipping Co., will be stopping weekly in Newport News before steaming to the South African ports of Cape Town and Durban. From there, cargo may be shipped on to Australia on the lines.
The two lines have agreed to carry at least 5,000 containers into Newport News in the next 12 months.
The new service is one of several the port of Hampton Roads has picked up this year. With three new services to South America as well, and a rise in exports to an economically rebounding Europe, 1994 is becoming the best growth year in terms of general cargo handled for the port since the late 1980s.
Shipments of general cargo surged 12.4 percent through May compared to last year, the Virginia Port Authority reported. General
cargo refers to goods shipped in containers and ``break-bulk'' goods - such as cocoa beans - that are carried on pallets.
Yet despite the general cargo growth, all is not a sunrise over the bow for Hampton Roads. Coal exports are down. That has reduced the number of ships calling in the port.
Also clouding the horizon are competing East Coast ports. They are nipping at Hampton Roads' heels, trying to take away some of its cocoa bean and rubber imports - the port's break-bulk lifeblood. Indeed, port workers represented by the International Longshoreman's Association started voting Friday on wage concessions designed to keep the port more competitive for such imports.
``The success that we've had over the past 11 years has made us a target,'' said Joseph A. Dorto, general manager and chief executive of Virginia International Terminals Inc., which operates the Newport News terminal, Portsmouth Marine Terminal and Norfolk International Terminals for the port authority.
So far, the port has kept the poachers at bay. General cargo resumed growing after slipping 3.5 percent last year from 1992 because of the weak international economy.
In the first five months of 1994, the authority's terminals imported and exported 3.25 million tons of general cargo, up from 2.89 million tons in the same period last year and 3.07 million tons in the first five months of 1992, the port's biggest year ever.
``Predominantly, the growth has come on the container side of the business,'' Dorto said.
Clearly, that's the brightest side of the port business locally.
Coal shipments, the port's principal bulk commodity, are down 12.7 percent to 21.7 million tons in the first half of the year, compared with 24.9 million tons in the same period last year, reported the Hampton Roads Maritime Association.
Falling coal shipments reverberate from the docks to the West Virginia mines through the railroads that carry the coal.
With less coal being dumped into cargo holds and shipping lines cooperating to carry each others' cargo more, the number of ships calling on the port has fallen too. The arrangement reduces unused space on each vessel.
The number of commercial ship arrivals in Hampton Roads is down 5.5 percent to 1,250 in the first half of the year, from 1,323 in the first half of last year, the maritime association reported.
``It makes business difficult for everybody,'' said L.D. Amory III, president of the Virginia Pilot Association, whose members guide commercial ships through the port. ``It affects tugboats, pilots, the ILA - everyone in the port.''
But shipping is a mercurial business - one month tonnage can be up, while the next it's down, depending on any number of factors.
``It's important to look beyond today's statistics,'' said David C. Wible, president of T. Parker Host Inc., a Norfolk-based shipping agency. ``Certain aspects are up, others are down. . . . The state of our port depends on our ability to recognize the trends of the future.''
Indeed, the port's general cargo growth so far this year is vulnerable, Dorto warned. It's being threatened by other East Coast ports gunning for Hampton Roads' lucrative break-bulk trade. To stay competitive, the ports' operators have asked port workers to take a pay cut on break-bulk cargo handling.
The port's principal break-bulk commodities - cocoa beans and rubber - both suffered last year and aren't rebounding this year, Dorto said. Cocoa bean imports were down 29.2 percent last year, while rubber was down 7.8 percent, he said.
While 85 percent of the port's general-cargo trade is in containers, break-bulk cargo generates more revenue because it's more labor-intensive. Break-bulk revenues help the port compete with other ports for container business.
Without the revenue from break-bulk cargo, the terminals would have to raise what they charge for handling containers, Dorto said. That could lead to the port losing container traffic too, he said.
The problem is competition from other East Coast ports offering less expensive break-bulk service using non-union labor. Ports in Charleston, S.C.; Savannah, Ga.; Jacksonville, Fla.; and Philadelphia have developed such service in recent years.
Under pressure from break-bulk shipping lines looking to cut their costs, the port turned to its workers.
Break-bulk wage rates in Hampton Roads start at $16.50 an hour before benefits, while ports south of here have wage rates as low as $10 an hour, he said.
``We're certainly not asking them to come down to the $10 level, but they need to come down to somewhere between where they are now and $10,'' Dorto said.
The union has been negotiating the concessions for three months with the Hampton Roads Shipping Association, which represents the port's terminals, shipping lines and stevedoring companies.
``Labor and management in recent weeks have made great strides in together trying to understand the long-term effects of competition from other ports,'' Wible said.
The future of the port may be at stake.
``We have not lost any lines,'' Dorto said, ``but our belief is that, if we don't resolve this issue, we will.'' ILLUSTRATION: Graphic
STAFF
REBOUNDING...
SOURCE: Virginia Port Authority
[For complete graphic, please see microfilm]
by CNB