THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, January 22, 1996 TAG: 9601200196
SECTION: BUSINESS WEEKLY PAGE: 22 EDITION: FINAL
SERIES: Forecast 1996
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 77 lines
After two years of heady double-digit growth the port of Hampton Roads may catch its breath in 1996.
Port officials expect the port to grow this year, but not as fast as it has recently. In each of the past two years, general cargo shipped across the docks increased by more than 1 million tons, topping 9 million tons in 1995.
Coal exports hit a seven-year low in 1994 and rebounded dramatically in 1995, but are expected to grow more slowly. Through November, 47.4 million tons of coal had been loaded through the region's three terminals, 4.1 million more than in all of 1994.
``I don't think we're going to have another double-digit year,'' said Joseph A. Dorto, general manager and and chief executive of Virginia International Terminals Inc., which operates the state-owned terminals in Norfolk, Portsmouth and Newport News.
The Virginia Port Authority's marketing department expects tonnage growth between 3 percent and 6 percent in 1996 in Hampton Roads, the largest East Coast port after New York in both general cargo and containers.
Through November last year, 2,559 merchant vessels had called on Hampton Roads, up 8.34 percent from 2,362 ships in 1994's first 11 months.
One reason the port's growth may slow is that, unlike last year, no new lines have started shipping goods through the harbor, though Dorto said there are prospects a new line soon may call on Hampton Roads. Last year cargo increased thanks in part to seven new services that signed on in the previous year.
Indeed there are few remaining shipping lines in the world that don't already ship through Hampton Roads. The region may get a boost from the pending global alliance of Sea-Land Service Inc., the shipping unit of Richmond-based CSX Corp., and Maersk Lines, a giant Danish shipping line.
``I certainly don't feel like we're going to lose anything,'' Dorto said.
Sea-Land operates its own terminal in Portsmouth, adjacent to the Virginia Port Authority's Portsmouth Marine Terminal. Maersk calls at Norfolk International Terminals.
The two lines plan to combine their around-the-world services, both of which call here, and create a service through the Suez Canal hauling cargo between booming Southeast Asia and North Atlantic ports including Norfolk
One hitch ports up and down the East Coast face is the master contract negotiations with the International Longshoremen's Association. The current contract will expire in October and talks are ongoing to hammer out a new deal for dock workers that handle containers in all East Coast ports.
The laborers, who currently make $21 an hour working containerships, haven't gone on strike in Hampton Roads for more than a decade, but that's always a possibility in labor negotiations.
General cargo includes cargo shipped in containers and break-bulk cargo such as rubber and cocoa beans shipped on pallets or in bins. In Hampton Roads container shipments drove growth, while break-bulk shipments foundered.
``Break-bulk continues to be a very difficult product to get,'' said H.R. ``Bob'' Jones, president of Lambert's Point Docks Inc., a Norfolk terminal specializing in break-bulk that is owned by Norfolk Southern Corp.
Break-bulk shippers tend to go where the labor is cheapest.
Coal experts don't expect 1996's growth to be a dramatic as last year's. The two terminals in Newport News saw double-digit growth last year's. The region's smallest, Pier IX Terminal Co., nearly doubled. They aren't likely to be able to match last year's growth, but may be able to sustain last year's volume.
The region's largest terminal, Norfolk Southern Corp.'s Pier 6, is forecast to increase its volume by up to 2 million tons in 1996, said Mark Bower, the railroad's assistant vice president of export and metallurgical coal marketing.
The terminal at Lambert's Point in Norfolk loaded 27 million tons of coal through November, posting its first volume increase since 1991. There are some concerns that steel production in Europe, for which much of the coal shipped from Pier 6 is used, may slack off in the first half of 1996.
KEYWORDS: VIRGINIA PORT AUTHORITY by CNB