Post by norfolk trucker on Feb 14, 2014 7:52:04 GMT -5
New tunnel tolls could dull port's edge, raise prices
2/12/2014
By Robert McCabe
The Virginian-Pilot
© February 14, 2014
NORFOLK
Two weeks after tolls kicked in on the two tunnels linking Norfolk and Portsmouth, the economic impact on the trucking industry that serves the port is still coming into focus.
There appears to be a consensus that we all will pay more, even if it's just a little, for goods shipped through the tunnels.
Perhaps more importantly, there's concern that Hampton Roads' competitive position could be weakened as tolls rise and shipping executives take a harder look at the costs of doing business in the port.
"The biggest change, for the most part, is the cost being passed on to the shipper, which is in turn passed on to the consumer," said Danny Glover, owner/president of Suffolk-based GTL Transport Co., which has a fleet of about 60 trucks.
"Everything stops with the consumer, in one way or another," he added.
"Yeah, because he's the one paying the bill in the end - the person that's doing the consumption. And that's you and me."
On any given day, about 2,200 trucks call on the two big container terminals in the port of Hampton Roads - APM Terminals in Portsmouth and Norfolk International Terminals - that are effectively linked by the Downtown and Midtown tunnels.
The tolls that took effect on Feb. 1 at the tunnels, to pay for expansion and other work, originally had been set at $7.36 each way for big trucks at peak times - the eight busiest hours in the morning and afternoon/evening.
As part of Gov. Terry McAuliffe's toll-reduction plan enacted earlier this year, the peak-time truck rate dropped to $4 each way. It's $2.25 for trucks in the off-hours.
Truckers say they appreciated the relief - but they're still bothered by the fact that the tolls will float higher in the next few years, eventually reaching the amounts first announced.
"I would like to say 'thanks' and applaud our governor and his secretary of transportation for stepping up and helping all of us by reducing the tolls that were going into effect," wrote Frank Borum, a trucking executive and president of the Tidewater Motor Truck Association, in an email.
He said that if the original $7.36 peak-hour toll for trucks had gone into effect, "it would have been devastating," characterizing the tunnel deal the state signed with the builders as "absurd."
The Virginia Port Authority, in an emailed statement, acknowledged the burden the tolls have created for truckers.
"We know that the tolls are putting pressure on the motor-carriers moving cargo at the Port of Virginia and many have had to adjust the way they are doing business," the authority stated.
"Hopefully, the administration's decision to adjust to the toll structure softened the early impact somewhat. From our point of view, we haven't been experiencing problems regarding the flow of cargo, and this comes as a result of the planning and dedication of the motor-carrier community."
While thankful for the toll rollback, local trucking and shipping executives say any extra costs right now are particularly ill-timed. They've also been burdened by congestion at the container terminals as port officials struggle to cope with record surges in cargo.
Many port users say backups inside the terminals dwarf the problems caused by tolls.
"We really have been hampered in our ability to get goods out of here on time to our customers, because of the congestion," said Murray Bishop, manager of export and logistics at Virginia Beach-based Stihl Inc. The maker of outdoor power tools moves 4,500 40-foot containers through the port a year.
"The tolls have not hampered our ability to ship one thing."
Still, some trucking companies say the tolls have led them to take alternative routes and rearrange schedules to keep drivers from going through the tunnels during the costlier peak periods.
The 23 percent drop in traffic reported at the Downtown Tunnel after the tolls took effect can be attributed, at least in part, to truckers avoiding it at peak hours, Borum said.
John Lawson is an owner-operator who leases his rig to a trucking firm that handles all of the business transactions.
Lawson, who still does not have a transponder in his truck, said he and other drivers like him have been driving around the tunnels, taking Interstate 664, Interstate 64 across the High-Rise Bridge, Military Highway across the Gilmerton Bridge and "any other way that they can get around," he said.
On Wednesday, however, Lawson received a text message from the trucking firm he drives for saying he will now be reimbursed for any trips through the tunnels, he said.
"It was just a matter of time," he said.
Jerry McPeeks, Portsmouth-based agent for Five Star Transport LLC, based in Indiana, said his company has folded the toll charge into the cost of moving every container.
"I've had some question it, but they haven't stopped doing business," he said of customers.
Bishop, the Stihl manager, said his company's containers are hauled to and from the port terminals by a third-party carrier.
While at least 60 percent are handled at Norfolk International Terminals - a toll-free destination from Stihl's facilities - the balance go through APM in Portsmouth, which means going through a tunnel.
Still, the toll costs, which are generally folded into the total freight charge paid by its customers, are a tiny fraction of the total expense of shipping a container to Europe or Asia, Bishop said.
"It's not forcing our customers to alternate suppliers," he added. "I mean, it's having no impact in that way."
The tolls, in fact, may have a kind of silver lining, he added.
"Quite honestly, the truckers tell us that the traffic in the tunnel has been a little bit lighter since the tolls started, so they're able to move freight a little bit more efficiently," he said.
The Port Authority, in its statement, said the tolls eventually will be worth it.
"In the long run, the toll is going to pay for a new tunnel that will provide an easier, less congested transit for all drivers making the trip across the Elizabeth River," the authority said.
"Going forward, tolls will play an important role in the financing solution for transportation infrastructure improvements."
Some trucking and logistics executives see it very differently.
"The tolls will be a silent business-killer at first, but we will one day wake up wondering why all the new maritime and logistics jobs have gone to our competition to the South of us," wrote Keith Helton, executive vice president at Chesapeake-based Givens Inc., in an email.
McPeeks, the Portsmouth trucking agent, also voiced concern about how the tolls might affect the port's competitive position.
"We stole all this business over many, many years from the northern ports because of tolls and excessive charges" there, he said.
"A matter of fact, one of my customers today, jokingly, when I was giving him a quote, he says, 'Virginia's getting to act like they're in New York now with all these tolls, ain't they?' "
Robert McCabe, 757-446-2327, robert.mccabe@pilotonline.com