VPA 2040 Master Plan Executive Summary - The Port of Virginia

Final Draft December 2008
Virginia Port Authority
2040 MASTER PLAN
creation of a port-wide chassis pool, new on and offsite container yards, all straddle carrier based
operations, new wharfs and automated security gates. A new on-dock rail yard at NIT with a
capacity of handling 500,000 containers when fully developed will open its first phase soon.
Several East Coast ports have indicated they have plans for expansion. Most of those plans still
require environmental review, permitting and approval. Despite competition in the near term
from Maersk’s new facilities, VPA’s advanced position on expansion will likely result in
maintaining or increasing its market position on the East Coast.
The long-term growth rate in TEUs used for financial planning and budgeting purposes is 5.0
percent. Negative growth is used for planning in fiscal 2009 followed by low growth in 2010 to
reflect the current economic conditions. The compounded average growth rate since 1978 has
been 8.12 percent. Global Insight’s most recent East Coast Ports forecast is 6.3% through 2025.
When the Heartland Corridor, distribution center growth and opportunities specific to the Port of
Virginia are considered a forecast for demand growth over 6.1% for the long term is achievable
for VPA terminals. 21 VPA considers 5.0 percent conservative as it assumes no additional
increase in market share. This conservative baseline provides a level of assurance and a
contingency when the viability of funding major capital programs is evaluated.
The forecast update completed in 2008 is higher than the forecast completed in 2003 and 2006.
In VPA forecasts the rate of growth used was and continues to be a conservative percentage rate
and actual results continue to exceed forecast. The forecast anticipates some slowing in growth
between 2008 and 2010. This accounts for the transition of some cargo to the new APM
terminal discussed previously. Growth projections at 5.0% (low), Global Insight’s US 5.2%
middle-low), a 6.3% (middle-high) achievable east coast growth rate and the thirty year
historical 8.12% (high) that accounts for continued favorable conditions is shown below. Under
any of the forecasted growth scenarios shown below, demand approaches or exceeds today’s
terminal capacities estimated at 3.3 million TEU close to the timeframe the Craney Island
Marine Terminal is scheduled to open in 2020.
21 Moffatt & Nichol adjusted Global Insight Baseline Demand Forecast
Moffatt & Nichol EX-22