Port is a ‘significant economic force,’ study says

Published 9:15 pm Thursday, November 21, 2019

A new study conducted by the College of William and Mary shows that the Port of Virginia is still “an expanding and significant economic force” in Virginia’s economy, according to a Port of Virginia press release on Wednesday.

The study focuses on the overall value of the port to the Virginia economy during fiscal year 2018. The results of this study were released Wednesday at the Governor’s Transportation Conference by John Reinhart, chief executive officer and executive director of the Virginia Port Authority.

According to the press release, the port contracted with the college’s Raymond A. Mason School of Business in early 2019 to measure the combined economic benefit of the port’s six terminals to Virginia’s economy during the 12-month span from July 1, 2017 to June 30, 2018.

Email newsletter signup

“We are building the foundation processes to create a steadily growing flow of cargo through this port for decades to come,” Reinhart stated in the press release. “We are speaking with our customers and the cargo owners using this port to better understand what their needs are today and will be twenty years from now. This information helps us build our model for sustainability and better execute our core function of serving our customers. The positive result of our effort is being felt throughout Virginia in terms of job creation and economic investment.

“The Port of Virginia is growing and the investments we are making are yielding world-class results,” Reinhart continued. “We are having positive effects on the Virginia economy and the goal is to be able to drive economic growth for decades to come. The cargo will go where it is treated the best and as this port grows, so do its benefits to all Virginians.”

The port contributes to Virginia economy in three ways, the press release states. First is the transportation of export and import cargo within Virginia and across it from other states and countries. Second is the export of goods made in Virginia, and third is the added processing and distribution of imports retained in the state.

Driven by an increase in imports, the port completed fiscal year 2018 having handled 2.8 million twenty-foot equivalent units of cargo, which is a volume increase of 2.4 percent, compared with fiscal year 2017.

“[The] availability of a unique deep-water port … able to handle a variety of container exports through nearly 30 international shipping line services direct to more than 90 foreign ports, provides global market access for Virginia businesses,” the study’s executive summary states. “Bottom line: this expands the volume they can produce and sell profitably. The production of Virginia-made exports is a major economic contribution attributable to Port of Virginia operations.”

The study’s authors are Dr. Roy L. Pearson, a retired William and Mary research economist who specializes in economic impact modeling, and Dr. K. Scott Swan, an internationally recognized professor of international business, innovation and marketing at William and Mary.

The last economic impact study, also conducted by William and Mary, assessed the port’s economic impact during fiscal year 2013.

According to the press release, the comparison between fiscal year 2013 and 2018 showed a 52.8-percent increase in spending, from $60.3 billion to $92.1 billion, representing 10.8-percent of Virginia’s estimated output purchases.

Gross state product rose from $30.5 billion to $39.3 billion, or by 28.77 percent, which represents 7.5 percent of Virginia’s gross state product for fiscal year 2018.

Labor income rose by 31.3 percent from $17.5 billion to $23 billion. The press release states that this represents seven percent of Virginia’s total employment compensation.

States and local taxes and fees rose from $1.4 billion to $2.1 billion, a 46.2-percent increase and 4.2 percent of total state and local revenues. Employment also rose in this span of time, from 374,646 to 397,094, a 6-percent increase and 9.5 percent of Virginia’s resident employment.

“The findings of this work emphasize the importance of the Port of Virginia and further underscore why a healthy port is critical to so many sectors of the economy as we go forward,” Reinhart stated. “The work is not done: we will continue to listen to the customers and cargo owners, continue to invest for the future and continue to work to get better. This is what a world-class port looks like.”