Panama Canal Expansion: Impact on Virginia

Ms. Jodie Love Community Affairs

Sister Cities International Annual Meeting April 27, 2012 The Port of Virginia

• Owned by The Virginia Port Authority and the Commonwealth of Virginia and Operated by Virginia International Terminals • One of the Largest Volume Ports on the East Coast, and One of the Most Successful Commercial Shipping Ports in the World VPA Terminals Economic Impact of The Port

• The Port of Virginia is an Economic Engine for the Commonwealth

– 345,000 Port and Port-Related Jobs Statewide

– $41 Billion in Business Revenues

– $1.2 Billion in State and Local Taxes

• Increased Port Growth Results in More Jobs and Revenues for the Commonwealth

Source: 2008 Economic Impact Study by William & Mary Mason School of Business Selected Distribution Facilities Using The Port of Virginia Top 10 U.S. Ports

Rank Port TEUs U.S. Market Share 1 Los Angeles 7,831,902 20% 2 Long Beach 6,263,499 16% 3 New York/New Jersey 5,292,025 14% 4 Savannah 2,825,179 7% 5 Oakland 2,330,214 6% 6 Seattle 2,139,577 6% 7 The Port of Virginia 1,895,018 5% 8 Houston 1,812,268 5% 9 Tacoma 1,455,466 4% 10 Charleston 1,364,504 4% Top 10 U.S. East Coast Ports

U.S. East Coast Rank Port TEUs Market Share 1 New York/New Jersey 5,292,025 35% 2 Savannah 2,825,179 19% 3 The Port of Virginia 1,895,018 13% 4 Charleston 1,364,504 9% 5 Jacksonville 856,636 6% 6 Miami 844,996 6% 7 Port Everglades 798,150 5% 8 610,918 4% 9 Wilmington (NC) 265,074 2% 10 Palm Beach 216,967 1% U.S. East Coast Competitive Ports Water Depth

Jacksonville 38 ft 4,500 TEU

Wilmington, NC 42 ft Savannah 8,500 TEU Charleston 45 ft

NY/NJ (2012) Baltimore Norfolk 50 ft 12,500+ TEU

Norfolk 55 ft (authorized) Based on fully loaded vessel Top Commodities

EXPORT IMPORT Paper & Paperboard, incl waste Furniture Logs & Lumber Auto Parts Soybeans & Products Paper & Paperboard, incl waste Wood Pulp Rubber, Natural Grocery Products Non-alcoholic Beverages Mixed Metal Scrap Woodenware Pet & Animal Feeds Toys Poultry Tobacco Tobacco Granite Grains & Flour Products Plastic Products Top Trading Partners

EXPORT IMPORT China China Germany Germany Belgium India Netherlands Brazil Indonesia Italy India Indonesia Brazil Netherlands Japan Belgium United Kingdom France Saudi Arabia Vietnam Forecasted Global Demand

• Global cargo volumes rose 11% in 2010 • Forecasted to increase 300% by 2040 – Containerized trade grows 2X faster than the U.S. GDP – Fundamentals of growth are still the same • Outsourcing • Emerging markets • Growing U.S. consumption • Rapidly increasing exports • Free trade agreements with South Korea, Columbia, and Panama Forecasted Global Demand Containerized Trade Grows 2X Faster Than GDP

U.S. GDP and TEU Trade: 1980 - 2010 600

500 - 40

U.S TEUs TEUIndex (Millions) 400 - 30 U.S GDP 300

GDP Index GDP - 20 200

- 10 100

0 - 0 Emerging Markets Shifts Demand World Trade Lanes Shifts in Trade Good for Port of Virginia

1 1 1 3 1 2 2 2

China to West Coast India/Southeast Asia to China to East East Coast Through Coast Through Suez Canal Panama Canal Expansion of the Panama Canal

• $5.25 billion capital investment program to modernize and improve the Panama Canal

• $190 million channel deepening project began in 2002

• $1.6 million project to redesign a third set of locks Panama Canal Expansion - New Locks Will Accommodate Post-Panamax Vessels

160’ 106’ 18 containers 13 wide containers wide

110’ 180’ Existing Locks Post-Panamax Locks Suez Canal

Port Said Mediterranean Sea

Lake Timsah Bitter Lakes

Sinai Peninsula Suez Overall length: 120 miles Width: 590ft / 622ft Max. permissible draft: 62ft The canal is sea level, no locks. Panama Canal vs. Suez Canal

Port of Virginia

Hong Kong, China Suez Canal Suez Canal

Panama Canal

Via Panama Canal Via Suez Canal Distance: 11,021 nautical miles Distance: 11,705 nautical miles Virginia Sets Deep Draft Record with MSC Roma

The Port of Virginia set a mark that no other port on the US East Coast can equal: it loaded a containership so heavy that it needed 48.5 feet of water to sail. MSC Bruxelles

• At 1,105 feet long, the MSC Bruxelles holds the record for the biggest containership ever to enter the Hampton Roads Harbor.

• Vessels of this size regularly call on The Port of Virginia

• Our channels and terminals can handle these vessels fully loaded unlike any other port on the East Coast International Gateway

Intermodal Connections Heartland Corridor National Gateway

Europe Chicago

Craney Island Marine Terminal St. Louis 54,000 Jobs Virginia $6B in National Benefits Service To All U.S. Markets in 48 States

Memphis

Atlanta Suez Canal International Trade Lanes The Port of Virginia’s Deep Channels Make it the Only East Coast Port Able to Handle World’s Largest Ships

South Panama America Canal Expansion Intermodal Gateway

Over 1.9 million TEUs moving over the Port in 2011 were transported by:

4% Barges

30% Rail

66% Trucks

Source: Terminal Operator CY2011 Growth Track

NS CSX

Both CSX and Norfolk Southern are upgrading their rail network in order to send double-stack trains from east coast ports like Virginia to the mid-west. The Heartland Corridor

New route is double-stack eliminates more than 230 miles. Opened Sept. 2010. The National Gateway

– Connects Norfolk to the Midwest and beyond

Chicago NY/NJ/PA – NW Transfer Yard

Columbus enables CSX service to St Louis new major markets Norfolk

– Expedites traffic through Memphis Chicago and St. Louis gateways Birmingham Atlanta

Jacksonville CSX National Gateway New Orleans CSXT double stack routes Other CSXT routes Tampa

Miami Future Craney Island Marine Terminal

Phase 1 – June 2025 Total Acreage: 220 Pier Length: 3000 ft. Depth: 52 ft. Cranes: 6 Capacity: 1.5M TEUs Cost: $1.2B Environmental Programs

• On-terminal storm-water retention & treatment • Electric powered ship to shore gantry cranes • LED lighting systems reduce energy consumption • Sound walls minimize noise pollution

Ultra low emission locomotives to shunt intermodal rail cars throughout our on-dock rail yard

"GO" program: Voluntary diesel retrofit/ replacement truck and vessel hybridization and fuel switch program

http://www.portofvirginia.com/corporate/environment/go-program.aspx Good Corporate Citizen

• Economic engine for Virginia • Socially responsible • Environmentally responsible

Plum Point Park, VPA Project Contact Information Jodie M. Love External Affairs Virginia Port Authority 600 World Trade Center Norfolk, VA 23510 (757) 683-2130 (757) 683-2166 FAX [email protected] www.portofvirginia.com www.craneyisland.info

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