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May 26, 2014

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32 THE JOURNAL OF COMMERCE MAY 26.2014 TOP 100 IMPORTERS AND EXPORTERS By Joseph Bonney JOHN REINHART WEARS nice suits, but not on Saturdays. That's when the Virginia Port Authority's CEO dons casual garb and roams the port's container terminals. The on-site inspection is a weekly rou- tine for Reinhart. As he gets a ground-level view of how the terminals are running, he talks with dockworkers and asks questions: What are you doing? How can it be done bet- ter? What are your ideas? It's not idle chatter. Reinhart's conver- sations have a tone of urgency. The former Maersk Line Ltd. CEO describes himself as "kind of impatient," and the port he joined on Feb. 10 is under pressure to change its operational and financial course — and to do it quickly. For years, the Port of Vir- ginia enjoyed a reputation as one of the best-run, most effi- cient U.S. ports. Then came last winter. High volumes on bigger ships coincided with a series of storms that delayed vessel arrivals and clogged terminal operations. Truck turn times approached six hours on the worst days. In addition to delaying pickups and deliveries and wasting truckers' time, the congestion caused the port authority's operating costs to balloon. This added to the agency's financial deficits and intensi - fied the political spotlight the state-operated port has been under since former Gov. Bob McDonnell's aborted privatization effort three years ago. Current Gov. Terry McAuliffe has warned that he won't tolerate continued losses. "Don't tell me how much our cargo is up if we're los- ing money on every piece of cargo. Growth for the sake of growth, without profit, is not something I'm into," he said in a recent speech to the Hampton Roads Chamber of Commerce. The port authority has taken steps toward stability. Broad-based industry task forces for truck and rail operations are working on long- term improvements, and several quick fixes to operations have been implemented. The port authority posted a $150,000 operating profit in March, the first in its current fiscal year, which began last July. The agency expects its full-year loss to be below the initial $23 million forecast. Eras- ing deficits is essential to attracting needed capital investment, Reinhart said. Terminals are running more smoothly, although drivers still complain of delays in the transfer zones where containers are transferred to and from trucks. One morn- ing this month, Reinhart showed a visitor a TV monitor on his office wall. The image showed trucks no more than two deep at terminal gates. "I see progress," said Shirley Roebuck, president of Gilco Trucking in Portsmouth, Virginia. She said the port authority is focus- ing on the right things, but that much work remains to be done. George Berry, an owner-operator who organized a loose-knit group of drivers to seek faster turn times and other improve- ments, said he's encouraged by early results from the port's motor carrier task force, on which he serves. "So far, so good," Berry said. "We're moving toward a brighter future. I just wish it had happened sooner." Shippers and carriers are watching closely. When the Port of New York and New Jersey was gridlocked last summer, some shippers looked to Virginia as an alternative. The port's 50-foot-deep channels and Mid- west rail connections put it on anyone's short list of potential East Coast load centers. Virginia's attractiveness became a mixed blessing last winter. Large ships thrown off schedule by Atlantic storms swamped port terminals with thousands of containers that dockworkers had no time to sort. Truckers picking up containers had to wait for long- shoremen to find the right box, which often was at the bottom of a stack. The crisis exposed a fundamental prob- lem. "We were trying to handle increased volume with no additional equipment and no major changes in processes," Reinhart said. "We were trying to do more the same way. That doesn't work. "The ships are getting larger, the vol- umes are increasing. The challenge for us is to provide service at a faster pace, with no additional cost," he said. Loaded import and export container vol- ume at Virginia jumped 12 percent last year Virginia's Mr. Fix-It With a new leader at the helm, the Port of Virginia is adjusting to growth in volumes and bigger ships "We want to focus on solutions inside, and grow out. It's all about the cargo. Cargo will go where it's treated well." John Reinhart

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