Port of Virginia hungry for biomass

By Kenneth Norris, Contributing Editor, Pulp & Paper International

NEW YORK, Aug. 8, 2011 (RISI) - Possessing the deepest shipping channels on the US East Coast, and with modernized terminals and expanded rail connections to critical markets, the Port of Virginia is positioning itself for the future. Today ranked sixth in the US in terms of cargo volume, the Port of Virginia, led by the Virginia Port Authority (VPA) has improved profoundly since 1981 when it was ranked 30th.

Forest products are an important part of the import/export mix and their successes are represented by three different "Top 10" rankings for the Port of Virginia. On the export side, 926,000 tons of woodpulp was shipped in containers through the port in 2010, a volume that ranked Virginia fourth in the top 10 based on weight.

Paper and paperboard volumes shipped by breakbulk equaled 569,000 tons also during last year, earning a number six ranking. Wood exports, primarily raw logs, earned a ninth ranking with 462,000 tons. Wood, mainly destined for the slumbering housing industry, was the largest import forest product for Virginia in 2010 with 365,000 tons.

"Our forestry-related commodities and cargo have always been an integral piece of business for this port and I don't see that changing," says Jerry A. Bridges, executive director of VPA.

Forest products are an important part of the mix for the Port of Virginia as it has reached into the Top 10 ranking for US ports.

Open doors

Growth is on the horizon for the Port of Virginia, especially in answer to overseas demand for biomass energy. The port is seeing heavy interest from transporters far and wide seeking to export wood chips and pellets to Europe in reaction to the EU's 2020 plan for incorporating sustainable energy goals. Exhibiting at the upcoming PPI Transport Symposium 19 in Amsterdam, the Netherlands, the port will be spotlighting its facilities and assets to capture more business.

Other US ports are also seeking to exploit this new market, but the Port of Virginia has an ace up its sleeve. Instead of relying on new markets alone, the Port of Virginia is drawing new business from traditional markets as the port expands.

Earlier this year, the VPA vacated the Portsmouth Marine Terminals (PMT) in favor of the APM Terminals. The move to the containers terminals at the Virginia APM facility, one of the world's most technologically advanced terminals, has been a boon in efficiency for the Port and the VPA, helping to increase volumes overall at the port and boasting some of the most environmental-friendly environments in North America.

The move also opened the doors for new tenants at the PMT and the opportunity to take a step away in the energy-export race. The 217-acre facility is on deep water to handle a variety of vessels and equipped with on-dock rail that is well suited for multiple cargos. Exporters of wood chips and pellets have shown considerable interest in this facility, noting its close proximity and easy access to the large crop of new biomass pellet plants being constructed or planned for the US Southeast.

"As the economy improves, I think we'll see an uptick in this business," says Bridges, "and there is a real potential for us to capture some bulk chip and pellet business with the availability of PMT."

Boasting some of the most technologically advanced terminals in the world, Port of Virginia continues to attract business from biomass to newsprint.

For more traditional cargo, a deal struck between Kruger Inc., the Montreal-based paper-company, and CrossGlobe Group, a Glen Allen-based logistics firm, will bring approximately 150,000 tons of newsprint per year through the port. Approximately 40,000 tons of the newsprint will go to The Virginian-Pilot, a well-read local newspaper, and other publications. The remaining 110,000 tons will be packed into containers and exported to India and Brazil.

Long on assets

The VPA has good reason to be optimistic about the future. Long-term relations with large companies who are steady importers and exporters of forest products should carry the Port to higher results. Companies like Weyerhaeuser, International Paper, Mercury Paper, MeadWestvaco, Kruger Pulp and Paper, Bahia Pulp, Lowe's and Home Depot give VPA a strong history of relationships to build on for forest product-related commodities.

Natural assets also add heavily on the plus side of the ledger for the Port of Virginia. The 50-foot shipping channel and no overhead obstructions mean the port can handle any ship afloat, including the new Triple-E container vessels ordered by Maersk. The port also sits within a day's drive of more than two-thirds of the nation's population, actively competing with the larger US East Coast ports.

But perhaps the greatest asset for the port may be the Virginia Inland Port, the VPA's inland intermodal ramp, which is a crucial component for wood exports. During season, raw hardwood logs coming out of the Ohio and Blue Ridge valleys are collected for export, loaded into containers and placed on rail for transport to the port. Arriving at the harbor, the cargo is fumigated and loaded for export. This kind of efficiency is just one example that the Port of Virginia is using to distinguish itself.

From woodpulp, paper and paperboard to wood chips and pellets, the Port of Virginia has made a definite statement that it wants to compete with the most successful ports in the world. When the "Top 10" ranking for ports comes out next year, few may be surprised to find the Port of Virginia near the top again.