Virginia Port authority signs 10-year, $500 million deal with CKYH
The Virginia Port Authority's terminal operating company has signed a coalition of ocean carriers to a 10-year deal worth more than $500 million.
The authority announced Tuesday that Virginia International Terminals Inc. reached the deal with the CKYHU consortium, made up of the Cosco, "K" Line, Yang Ming, Hanjin and United Arab Shipping lines. That group is VIT's largest customer.
With this deal, about 97 percent of VIT's business is locked into 10-year deals.
"I don't think there's any port on the East Coast that has 10-year contracts and that has that many contracts locked up," said Joseph A. Dorto, VIT's chief executive and general manager.
VIT has been pursuing such deals to guarantee revenue and to prevent business from defecting to the $450 million terminal opened in Portsmouth last year by APM Terminals. However, one major shipping line, Evergreen, recently announced that it was shifting one of its services from a VIT terminal to APM's operation.
The deal with CKYHU was signed late last week and dates re troactively to May 1, Dorto said. It had been in the works for almost two years.
It guarantees the movement of about 160,000 shipping containers annually through Norfolk International Terminals, the authority's largest facility. But Dorto said the group already is moving about 250,000 containers a year through VIT's terminals, about one-quarter of the total volume.
Dorto said Jerry A. Bridges, the state-controlled authority's executive director, played a key role in landing the deal. So did the physical improvements that the Port Authority is making to the Norfolk terminal, such as a larger berth and a larger rail yard for moving cargo containers.
Even with this deal, Bridges said the authority remains hungry for more business.
"We know there is more business out there and we intend to go and get it," Bridges said in a statement.
The authority announced Tuesday that Virginia International Terminals Inc. reached the deal with the CKYHU consortium, made up of the Cosco, "K" Line, Yang Ming, Hanjin and United Arab Shipping lines. That group is VIT's largest customer.
With this deal, about 97 percent of VIT's business is locked into 10-year deals.
"I don't think there's any port on the East Coast that has 10-year contracts and that has that many contracts locked up," said Joseph A. Dorto, VIT's chief executive and general manager.
VIT has been pursuing such deals to guarantee revenue and to prevent business from defecting to the $450 million terminal opened in Portsmouth last year by APM Terminals. However, one major shipping line, Evergreen, recently announced that it was shifting one of its services from a VIT terminal to APM's operation.
The deal with CKYHU was signed late last week and dates re troactively to May 1, Dorto said. It had been in the works for almost two years.
It guarantees the movement of about 160,000 shipping containers annually through Norfolk International Terminals, the authority's largest facility. But Dorto said the group already is moving about 250,000 containers a year through VIT's terminals, about one-quarter of the total volume.
Dorto said Jerry A. Bridges, the state-controlled authority's executive director, played a key role in landing the deal. So did the physical improvements that the Port Authority is making to the Norfolk terminal, such as a larger berth and a larger rail yard for moving cargo containers.
Even with this deal, Bridges said the authority remains hungry for more business.
"We know there is more business out there and we intend to go and get it," Bridges said in a statement.