Port of Virginia expands reefer capacity

Port of Virginia expands reefer capacity

Thirteen new stacks are now in use in Virginia International Gateway (above) as the port also gets clearance to import and export more refrigerated goods through its terminals. Photo credit: The Port of Virginia.

Beneficial cargo owners (BCOs) in Virginia will benefit from a pair of recently completed improvements at the Port of Virginia to increase terminal capacity and expand its refrigerated cargo capabilities for importers and exporters, lowering transportation costs and shortening transit times.

The port authority this week announced that the 13 new stacks at the Virginia International Gateway (VIG) terminal are now fully operational, doubling the terminal’s annual handling capacity and increasing its refrigerated cargo capabilities by 66 percent. The development comes shortly after the port passed through the US Department of Agriculture’s (USDA’s) Southeast In-Transit Cold Treatment Pilot program.

Prior to the start of the program in 2013, perishables were sent to ports in the Northeast and transported on refrigerated trucks to the Southeast. The pilot enabled refrigerated containers to enter a participating US Southeast port after a two-week cold treatment en route to protect against fruit flies and other pests. Cold treatment is a process by which perishable fruit imports have their pulp brought to a certain temperature for a period of time to fulfill USDA quarantine requirements.

Regional reefer competition

Ports across the Southeast have been increasing their efforts to create more terminal capacity and expand their refrigerated cargo profiles.

The Port of Savannah recently unveiled expansion plans that will allow it to handle up to six 14,000-TEU vessels simultaneously by 2024, while also creating new container stacks this year to complement the approximately 40 existing stacks going back nearly two miles in its mammoth Garden City Terminal. Months after the Port of Virginia cuts the ribbon on its expanded VIG rail yard in the spring, Savannah will bring the Norfolk Southern portion of its Mason Mega Rail project online, which port authority executive director Griff Lynch believes will save shippers between 24 and 48 hours on transit times by building 10,000-foot train sets on site.

The Port of Charleston is transitioning from manual pickers to more than 60 rail-mounted gantry cranes (RMGs), which will enable stacks to be placed closer together and increase capacity to 700,000 TEU annually at the Wando Welch terminal. The conversion should be complete before the end of 2019.

In refrigerated cargo, these peers to the south have also taken strides similar to Virginia. The ports of Charleston, Everglades, Savannah, Miami, and Wilmington, North Carolina, previously graduated from the USDA program and have ambitious goals to grow imports and exports of fruits, vegetables, and flowers.

The Port of New York and New Jersey dominates the refrigerated import market on the East Coast with a 15 percent share of refrigerated imports in the US, according to PIERS, a sister product of JOC.com within IHS Markit. By comparison, Savannah owns a 3 percent share, Norfolk 2 percent, and Charleston 1 percent. Savannah, Norfolk, and Charleston’s market share has been relatively constant between 2016 and now — shifting less than a percentage point. In 2017, Savannah imported 43,358 reefer TEU, Norfolk had 32,065 TEU, and Charleston had 13,102 TEU. New York-New Jersey handled 225,008 TEU, Wilmington, Delaware, processed 163,520 TEU, Philadelphia handled 140,935 TEU, and Port Everglades imported 97,252 TEU, according to PIERS.

Refrigerated imports to the US consist primarily of fruits from South America, including blueberries, mangos, citrus, grapes, avocados, bananas, apples, and pears. On the export side, shipments are largely vegetables, chicken, pork, and beef.

“This is important for logistics and supply chain managers importing agricultural products because it means this cargo will get to its market more quickly,” said John Reinhart, executive director of the Virginia Port Authority. “When construction is finished, we’ll have nearly 900 reefer spaces [in VIG and Norfolk International Terminals], which is a 66 percent increase in total reefer capacity. We have the necessary federal approval and capacity to help develop Virginia into an export and import center for refrigerated cargo.”

Port Miami has parlayed its reefer capabilities into a thriving flower import business, converting cargoes that were once exclusive to air cargo into containerized ocean freight.

In addition to the latest on-terminal improvements, the Port of Virginia offers inland reefer moves via its Richmond Express barge service, which serves the state’s capital three times per week and has more than 40 power units on board. “There are users of RMT that use the barge to move reefer cargo, and interest in that service continues to grow,” Reinhart said. “The work we are doing in this area of business is helping to diversify our cargo mix and build a sustainable future for this port.”

Two such potential future customers for the barge service could be Lidl, the discount grocery chain founded in Europe that has locations in the mid-Atlantic and Carolinas, and Sabra Dipping Co., widely known for its hummus products in supermarkets, both of which currently use the Richmond terminal.

Conventional container cargo

The completion of the new stacks at VIG takes the terminal to 28 total container stacks served by 56 RMGs, which should increase capacity to 1.2 million container lifts per year.

The 13 stacks complement 15 existing stacks, also served by RMGs. Cranes serving the older stacks are on a schedule to be refurbished throughout the year, with two stacks already complete and three more under way.

Port drivers have long complained about inconsistent turn times in VIG. Although there are many reasons, according to the drivers, one complaint is equipment breakdowns, which can turn a single transaction into a multi-hour ordeal. With the new stacks online, older cranes can be shut down for refurbishment with minimal disruption.

By the end of spring, VIG will receive four new ship-to-shore cranes and an expanded rail yard capable of building 10,000-foot trains, like in Savannah, will be completed too.

For shippers, it’s just the beginning of a big year in the Southeast in which the words “expansion” and “increased capacity” will be common themes as ports begin marketing these improved facilities to shippers.

Contact Ari Ashe at ari.ashe@ihsmarkit.com and follow him on Twitter: @arijashe.