February 28, 2017

Georgia, Virginia ports propose deal to collaborate across broad front

Proposed agreement would allow for integration of terminal investments, operations, strategic planning and marketing.

By DC Velocity Staff

The Georgia Ports Authority (GPA) and the Virginia Port Authority (VPA) proposed yesterday to integrate the ports' terminal investments, operations, planning, and marketing, a major step by North American ports to leverage their resources to accommodate increased cargo flow from the introduction of mega-container vessels and the opening of the expanded Panama Canal.

The proposal to implement the joint compact, called the "East Coast Gateway Terminal Agreement," was filed Friday with the Federal Maritime Commission (FMC), which must approve an agreement of this nature.

In a joint statement, the ports said the agreement "encourages voluntary cooperation in the areas of operational and supply chain efficiencies, safety, communications, and customer service." Both ports are state owned, and each authority operates its terminals rather than relying on terminal operators, as many ports do.

The respective executive directors, VPA's John Reinhart and GPA's Griff Lynch, said the widened and deepened Panama Canal is prompting larger vessels with more containers than ever to reach the U.S. East Coast through the isthmus. As a result, customers are seeking "gateway ports" that "can leverage sufficient landside infrastructure to ensure the free flow of cargo," they said.

In a separate e-mail, the Port of Virginia, which is owned by VPA, said both authorities believe they could benefit from the same level of cooperation that is behind the formation of several global ship alliances, where vessel capacity is shared and rationalized to provide cost-effective service to the shipper and beneficial cargo owner (BCO). "Like the ocean carriers, ports are seeking greater efficiency. Competing in the global market requires being able to look at issues from a comprehensive viewpoint. We see this as an innovative collaboration to improve service in the supply chain," the port said.

Both authorities will share best practices in the areas of terminal operating systems, training, cargo handling, vessel turn times, and infrastructure, as well as supporting the marketing promotion of all-water routes from the U.S. East Coast to the international marketplace via the canal, according to the statement. GPA runs the Port of Savannah, the nation's fourth-busiest containerport, according to the American Association of Port Authorities (AAPA). The Port of Virginia, which runs four terminals located on the Hampton Roads harbor, is the sixth-busiest U.S. containerport, according to AAPA data.

Over the years, there have been dozens of similar agreements at ports worldwide. Though each port-to-port agreement is different, they all share the common objective of greater cooperation. For example, the FMC in 2012 approved an agreement between GPA and the nearby South Carolina Ports Authority to discuss operational issues. The adjacent ports of Los Angeles and Long Beach, which combined make up the nation's busiest port complex, cooperate in implementing environmental initiatives and in reducing cargo storage fees to reduce congestion.

The ports of Seattle and Tacoma, which launched their own joint initiative in 2015, cooperate on infrastructure, promotion, management, and environmental issues related to their marine cargo business. The Seattle-Tacoma venture, dubbed "The Northwest Seaport Alliance," was considered unique in that it involved creating a third organization to manage facilities in two locally governed ports through their respective elected five-member commissions, according to Tara A. Mattina, a spokeswoman for the Alliance.

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