VIRGINIA PORTS PURSUE S. AMERICAN BUSINESS

VIRGINIA PORTS PURSUE S. AMERICAN BUSINESS

The ports of Virginia, which lured away a big chunk of Baltimore's container traffic in recent years, now are aiming their sights at Chilean fruit imports that flow through Philadelphia.

The Virginia Ports Authority hopes to attract South American fruit shippers by building a new warehouse. The 100,000-square-foot facility is expected to be completed this fall in Newport News, one of five sites in the port complex at Hampton Roads, Va.Other East Coast ports' efforts to get South American fruit business have met with mixed success.

Philadelphia is expected to handle some 38 million cases of seasonal Chilean fruit this year, about 70 percent of the South American fruit that enters U.S. ports. The Port of Los Angeles handles the rest.

"We're working with the Chileans on getting some of that fruit," said J. Robert Bray, executive director of the Virginia Port Authority. "There's going to be a need to expand beyond Philadelphia."

"This is no surprise to us," said John LaRue, executive director of the Philadelphia Regional Port Authority. "We're always ready for competition and well-positioned to handle the current needs" of Chilean shippers, he said.

"There's a possibility, because the fruit trade is growing 20 percent a year, that a port like (Hampton Roads) could attract three or four ships a year," said Richard E. Coffey, a maritime consultant in Baltimore. "But I don't see it becoming in any way a big threat to Philadelphia."

Virginia's push into the fruit trade comes as the port's containerized cargo business is leveling off after a decade of torrid growth.

Last year, the Hampton Roads complex handled a record 7.6 million tons of general cargo, a 6 percent gain from 1990 and the port's ninth consecutive annual increase. The rate of growth, however, has cooled since the late 1980s, when annual volume gains consistently hit double digits.

The port expects another single-digit rise this year, largely because of

uncertain world economic conditions, the drop in imports, and the pooling of vessel and terminal space by steamship lines.

"The effect of. . .(pooling) has been a diversion of ship calls," said the Virginia Port Authority's Mr. Bray. "That's been a problem for the port business."

"It's going to be a tough year unless the economy springs," said John D. Covaney, the authority's senior managing director of marketing.

There are signs that the situation may improve, Mr. Covaney said last week. At least in Virginia, "things are starting to loosen up. . .Exports are showing a tremendous swing," he said. "If that continues, and imports improve, we will be really solid, and our objectives (for the year) will be surpassed."

The authority, which now has 37 lines calling at its terminals, is also counting on expanded cargoes from several lines, including Wilhelmsen Lines, National Shipping Co. of Saudi Arabia and the Middle East service of Sea-Land Service Inc.

Cargo volumes also could be affected if the U.S. government ends its prohibition against Russian-flag ships calling at Norfolk, and humanitarian aid to Eastern Europe picks up. "There's just so many unknowns out there," said Mr. Bray.

The fruit facility at Newport News is described as a "flexible facility" that will be equipped to handle chilled and refrigerated storage.

It is being built next to two docks served by rail lines owned by CSX Corp.'s CSX Transportation unit. Workers at the facility will be represented by the International Longshoremen's Association.

The Virginia authority is talking to a Chilean consortium of shipowners and growers about calling in Newport News, Mr. Covaney said. Port officials also are talking with importers and retail stores throughout the United States to build a distribution network for Chilean winter fruit.

If the port can convince South American lines to make Newport News their first port of call on the East Coast, Virginia will be able to "compete into the Midwest" with Philadelphia for the fruit trade, Mr. Covaney said. "We can serve a very large portion of the market. . .It's a constant effort putting the pieces together."

But the competition with Philadelphia will be stiff. Philadelphia has three refrigerated terminals and has invested more than $3 million during the last 18 months to expand its cold storage capacity to "create additional opportunities" for the Chilean carriers, said Mr. LaRue.

Philadelphia's key advantage is its extensive distribution system, primarily small trucking firms, that move refrigerated cargo as far as Denver.

"We have 1,500 to 2,000 trucks available in this region every week," said Mr. LaRue.

"The problem Norfolk will face is, where will all the trucks come from all of a sudden to do the job?" said Mr. Coffey, the consultant in Baltimore. ''For the Midwest, they will have to build that truck structure around them."

Still, "there's no question Philadelphia gets congested," he said.