Infrastructure Past, Present, and Future Casebook/Port of Newport News

This casebook is a case study on the Port of Newport News by Andrew Kearney, Trevaughn O'Neil, Walker Brock, and Jean Montanez as part of the Infrastructure Past, Present and Future: GOVT 490-004 Synthesis Seminar for Policy & Government / CEIE 499-001 Special Topics in Civil Engineering Fall 2022 course at George Mason University's Schar School of Policy and Government, and the Volgenau School of Engineering Sid and Reva Dewberry Department of Civil, Environmental, and Infrastructure Engineering. Modeled after the Transportation Systems Casebook Under the direction of Dr. Jonathan Gifford.

Summary
The Port of Newport News, known as the Newport News Marine Terminal (NNMT) is one of six terminals of the Port of Virginia owned by the Virginia Port Authority (VPA), an agency under the Commonwealth of Virginia under the auspices of the Virginia Secretary of Transportation and operated by the VPA's private subsidiary, Virginia International Terminals LLC (VIT). Located in Newport News, Virginia, NNMT covers around 57 hectares, 165 acres on the north bank of the James River, and specializes in services such as warehousing, heavy-lift cranes, breakbulk, and roll-on/roll-off capabilities. These services provided by NNMT help make the Port of Virginia the third largest port on the East Coast and help attract other industries to the Virginia Commonwealth and Newport News region such as distribution and manufacturing. The NNMT is the VPA’s main terminal for break-bulk and roll-on/roll-off services. Boasting world class services and operations, the port is the fastest growing in the United States, and is a driver for commerce and economic growth in the region because of its large employment of ten percent of Virgina's workforce , and access to major roadways such as Interstate 664, Interstate 64, US Route 17 and US Route 60 and over 36,000 feet of rail lines connecting to the Midwest. Through its specialized services, NNMT helps support Naval Station Norfolk, the world's largest naval base with shipbuilding and repairs as well as serving as a focal point of cooperation and support for numerous federal customer such as the Coast Guard, U.S. Navy, U.S. Army Corps of Engineers, and Customs and Border Protection.

History
 Origins of “Newport News” 

The city of Newport News was officially founded in 1896 but the area and harbor had a longer history reaching back to the 1600s. Originally an area of land claimed by the Virginia Company (a British trading company focusing on the colonization of eastern North America), the name supposedly comes from Captain Christopher Newport who would voyage several times to Newport and could give news of supplies. Around 1881 Newport News began a large amount of industrialization with the help of two large companies, the Chesapeake and Ohio Railroad which extended into Newport News in 1881, and the Newport News Shipbuilding and Drydock Company which began around 1886. Both companies were owned by Collis P. Huntington, an American Industrialist, who led the Peninsula Extension which expanded the railroad into Newport. This expansion eventually leads to the founding of the City of Newport News in 1896.

 Newport News Navy Shipbuilding, and World War I and II 

The Newport News Shipbuilding company quickly began making ships for the US military. By 1897 they had made 3 Gunboats for the Navy, the Nashville, the Wilmington, and the Helena. By 1906 they had built 5 Battleships, the Kearsarge, the Kentucky, the Illinois, the Missouri, and the Virginia. The US entered World War 1 in 1917 after the sinking of the Lusitania, and production of ships skyrocketed, with Newport News making at least 25 Battleships for the Navy. During this time there was also a shortage of housing for dock workers which led to the creation of Hilton Village, and it was financed by the government, which made it one of the first planned communities in the US. New highways were built in the area to connect the port to military camps. After the war they began creating Aircraft Carriers with the first being the USS Ranger which launched in 1933. In World War 2, Newport served a similar purpose and between 1938 and 1941 they built three more carriers, the Yorktown, the Enterprise, and the Hornet. These carriers also helped win the Battle of Midway, which was a major turning point of the war. The Enterprise would also go on to become the most decorated warship in the US Navy. Over the course of the war, the shipbuilding yards workforce more than doubled to keep up with its needs, this also led to a massive 77% increase in the town's population.

 Post-War Consolidation 

As the population increased a large number of people moved into the surrounding areas (mostly the Warwick area), which eventually led to issues with providing services to this large influx of people as taxes couldn’t keep up. There were a series of issues in trying to consolidate the surrounding areas between 1950 and 1955, but in 1957 the area of Warwick consolidated with Newport News becoming one city.

 Shipbuilding for the Navy (Post World War II - Present) 

Newport Shipbuilding continued to build more ships for the Navy, and in 1955 built the first “super-carrier” the USS Forrestal. In 1960, Newport finished their first nuclear power submarine, the Shark. In 1961, they built the Enterprise, which was the first nuclear-powered carrier. In the mid-60s Newport finished building two new carriers, the America and the Kennedy, and began working on a set of 9 nuclear power submarines. Between the early 70s to the late 2000s the shipyard mainly focused on 10 nuclear power carriers that were all designed and built in Newport. During this time, they also build 29 Los Angeles Class Submarines between ’76 and ‘96 Since 2008 they have been working the first of the new class of carriers, the Gerald R. Ford, and have been working on Virginia Class submarines.

Newport News Marine Terminal as an Infrastructure Component
Newport News Marine Terminal is an expansive port that offers 60 acres of outside storage with at least 968,000 square feet of covered storage space. The port also contains two piers that each harbor four vessel berths for expected water vessels. The pier has 3480 feet of berth space that consist of a 40 foot draft depth to accommodate approximate water vessel lengths of 850 feet. With such a large amount of space, the facility also contains 18,990 feet of Class 1 rail provided by CSX Transportation (a leading provider in rail & rail-to-truck services.) Along with the Class 1 railway the port also provides multiple passageways to places around the country, The Landside Access provided by NNMT includes roads that lead to Interstate 664 (I-664) to provide goods and services to different states, roads to US route 60 to access different cities within the Virginia Area, and access to 25th Street which is a direct road into the city of Newport News. The Waterside Access for NNMT consists of two parts. The first part of the Waterside access would be its connection to the James River. From this river water vessels are able to service the Port of Chesapeake, Hopewell, Norfolk, Portsmouth and Richmond which are all located locally in Virginia. The James River then feeds into the Chesapeake Bay which is the second part of NNMT's Waterside Access. The Chesapeake Bay is a system of Rivers that connect NNMT to other ports in the DMV area including - the Washington Navy Yard located in the District of Columbia, the Port of Annapolis and Baltimore located in Maryland, and the Port of Alexandria and Cape Charles which are located further up in Virginia. Along with the Waterside Access of the Newport News Marine Terminal is the Newport Shipyard which offers on-site refit and repair services for ocean vessels.

Infrastructure Performance
The Newport News Marine Terminal has continued to remain an efficient and dependable port throughout the years. During a time with tariff-driven trade wars, economic ruin and the Covid-19 crisis, Newport News Marine Terminal has been on top of the manufacturing and redistribution of goods. A major consequence from the pandemic was its impediment on manufacturing mostly being the production and supply of goods. Although many critical businesses remained operable the supply for goods was either halted or slowly decreased while the demand for products continued to grow. The port had to adjust to accommodate their customers who were heavily affected by the pandemic. The Marine Terminal's persistence and determination during the pandemic led to its most productive year on record. NNMT recorded "more than 3.5 million TEUs" (Twenty-foot equivalent units) starting in the year 2021. (The fiscal year started in June 2021 and ended this year in May). Stephen A. Edward the CEO and executive director acknowledged the port's success to "the entire port of Virginia team along with its supporting partners in delivering best-in-class performance." The port has also delivered exceptional ship repair to yachts, recreational boats, and commercial vessels. The Newport Shipyard has serviced a multitude of maritime vessels for customers and armed forces alike and has not had any trouble doing any carpentry, metal work, mechanical or electrical repairs to get each vessel in its best working conditions. In conclusion, NNMT has remained a vital infrastructure component that benefits the citizens of Virginia but also the Marines and Navy forces that are serviced by the port.

Funding
The Newport News terminal, like its sibling facilities nearby, is sustained mainly by the revenues it produces from its port activities. The terminal has the capacity to handle break-bulk, roll-on / roll-off cargo, shipbuilding, and large storage facilities including 60 acres of outside storage and 968,000sq ft of covered storage. According to the VPA’s 2022 Annual Comprehensive Financial report, for the international terminals the total amount of operating revenue is $873,707, while the total of operating expenses is $876,048. Additionally, the facilities also receive funds from state grants for specific new constructions or maintenance. Huntington Ingalls Industry (HII), the largest military shipbuilding company in the country has a facility in the port that focuses on building U.S. Navy nuclear aircraft carriers, submarines, refueling, complex overhaul, and carrier inactivation. Aside from its transportation connections via water, the Newport News terminal also is connected to rail transportation provided by CSX Corporation. The terminal is just off from Interstate 664 to downtown Newport News and has easy access to Interstate 64, US Route 17, and US Route 60, all of these allow for easy movements of goods from the terminal to its national and international partners. According to the VPA annual financial report, the top 5 trading partners when it comes to exports are China, Brazil, India, Netherlands, and the United Kingdom. Meanwhile, the top 5 import partners are: China, India, Germany, Italy, and Brazil.

Future Development
With the volume of cargo coming through NNMT steadily and consistently increasing, plans have been made for the expansion of the port to accommodate the increase in traffic through the port. The Port of Newport News is one of the fastest growing ports in the United States and helps support the world’s largest naval base. NNMT is expected to invest $1.5 Billion into its infrastructure improvements between 2015 and 2025. This has led to the implementation of the FY2022-2065 2065 Master Plan, a commitment of over more than forty years to expand the port to meet the growing needs of its customers including the U.S. armed forces, civilian customers, and the growing population in the region. The main emphasis of the Master Plan involves steady investment leading to consistent growth and connectivity with other parts of the world including South America, Asia, and Africa; and investing in increasing current capabilities. A $350M investment will be made to deepen the thimble shoal channel by 55 feet, to remove sediment build up in the water accommodate more traffic coming through the Chesapeake Bay into Norfolk Harbor and the James River and is set to be done by 2024 and become the deepest port on the East Coast. By the end of the Master Plan the NNMT will increase its status as the port best suited for warehousing, rolling cargo and breakbulk cargo. Logistical investments will also be made to update and replace old equipment at the end of their service life to accommodate the traffic and cargo volume increases. The investments for the expansion of the port will be funded by the VPA’s Capital Investment Plan (CIP), a combination of federal and state funds, and port revenue and will use a tiered approach to allocate funds towards the most in demand infrastructure projects including dredging, updating and increasing the efficiency of existing facilities, and constructing new ones. The CIP is forecasted and calculated to provide unconstrained growth through 2065 while making positive cash flow annually. The need and desire to expand the port and its infrastructure is a result of increased volume coming through the port which causes logistical issues such as congestion, delays, and increased emissions of Greenhouse Gasses such as Carbon Dioxide (Co2). The surge in volume and resulting congestion from larger ships carrying greater amounts of cargo helps increase the risk of supply chain shortages and crises, prompting a proactive effort by the VPA to increase the capacity of each port under its authority. The forty-three yearlong Master Plan encompasses not just improved infrastructure for increased port capacity and expansion of services, but also environmentally safe operations.

Environmental Impact
Another foremost aspect of the VPA Master Plan is the commitment to operate all ports, including Newport News on 100 percent clean energy by 2032 and net zero carbon emissions by 2040, operating in an eco-friendlier manner and being more energy efficient. The high degree of industrial activities in the port brings up concerns of increased pollution of air emissions and toxic chemicals leading to negative health effects such as cardiovascular disease and diabetes. This leads to the commitment of the port to operate in a manner of cutting emissions to as close to zero as possible and balancing emissions by removing an equal amount of carbon from the atmosphere as released into it. Aside from NNMT’s efforts to operate at net zero carbon emissions by 2040, the VPA has made efforts as early as 2008 to utilize operations and systems to promote sustainability and environmentally friendly operations as part of the Environmental Management System (EMS). The EMS is designed to identify environmental risks relating to port operations and begin efforts to improve efficiency. Examples of this include identifying ways to reduce air emissions, and managing waste generated from port operations, and embracing recycling practices. The EMS program is certified by the International Standards Organization, making it the first of its kind to operate on the East Coast.

Key Figures
VA Secretary of Transportation - Ensures the state of Virginia has access to outside markets by overseeing and maintaining transportation networks and services.

Virginia Port Authority - State agency and owner of the Port of Virginia, including Newport News, reports to Secretary

Virginia International Terminals LLC - Private subsidiary of VPA who has operated the port since 1981.