tasc-hampton roads partnership presentation

Regional Trends and Opportunities

Tidewater Association of Service Contractors

Bob SharakHampton Roads

PartnershipNovember 21, 2007

Hampton Roads

About the Hampton Roads Partnership

• Unique public-private Leadership organization formed in 1996.– 17 localities, 111 members– Chief elected officials and key

leadership in business, education, military, and labor.

• Mission– Provide leadership on

strategic issues that improve the region’s competitive position in the global economy.

Hampton Roads

About the Hampton Roads Partnership

• Goal– To engage in activities

leading to higher living standards for residents of Hampton Roads and stronger, more agile communities

– Only organization focusing on regional strategic issues

Hampton Roads PartnershipStrategic Plan

• Education – School Readiness

• Start Strong – Educational Attainment – Technological Research

• Hampton Roads Research Partnership

– 6 universities, 2 federal labs and a research institute

– 2 US EDA Grants ($1.2M)– Focus Areas: Sensors, Bio-

science and M&S

Hampton Roads PartnershipStrategic Plan

• Transportation – Traffic Congestion

• HRTA– Public Transit

• Regional Transit Study

• Regional Citizenship– America’s First Region

Campaign– Regional Stewards

Group

Hampton Roads PartnershipStrategic Plan

• Economy – Modeling & Simulation

• M&S Strategic Plan• State Budget Request• MODSIM World 2007

Conference & Expo

MODSIM World 2008!!MODSIM World 2008!!September 16-18 2008September 16-18 2008Virginia Beach, VAVirginia Beach, VA

Economic ImpactsModeling and Simulation Industry

Hampton Roads PartnershipStrategic Plan

• Economy – Port/Logistics

• Technology/ Automation– HRRP/WIRED Grant

• Logistics Hub– To be continued…

Identifying Regional Trends

Identifying Regional TrendsMajor Drivers of the

Regional Economy• Defense

– 2006 DoD spending approx. $16.8 billion (ODU)

– More than one-third of the $72 billion regional economy.

– Accounted for approx. 75% of Regional Economic Growth since 2001. (ODU)

Identifying Regional TrendsMajor Drivers of the

Regional Economy• Defense

– Nearly 112,000 military personnel, second largest concentration of military in the nation.

– Over 11% percent of all jobs. (HRPDC)

21.00%

30.10%

23.70%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Vietnam (1969-1974) Regan Admin. Build-up(1983-1988)

War on Terror & Iraq(2001-2005)

Growth Spurts In Hampton Roads Gross Product

Source: Old Dominion University Economic Forecasting Project

Identifying Regional TrendsMajor Drivers of the

Regional Economy• Defense

– 2002 and 2003 growth strongest since the 1980s Reagan build-up. (ODU)

– Major growth spurts have come with Defense build-ups.

– It almost doesn’t matter what happens in the rest of the economy.

Identifying Regional TrendsMajor Drivers of the

Regional Economy• Defense

– Base closures • Reduce GRP $404.5

million by 2020. • Lose 1,223 civilian,

921 military and 248 contractor jobs by 2011.

Identifying Regional TrendsMajor Drivers of the Regional

Economy• Defense

– Slowing Defense growth slowing regional growth.

– 2007 regional growth below the historic average, slowest since 2000. (ODU)

– 2006 growth rate revised downward. (ODU)

Peak Rate

13.7%

Peak

Spending

$606.6bn

Identifying Regional TrendsMajor Drivers of the

Regional Economy• Defense

– Navy• FY 2008 active duty end

strength 45,000 below FY 2004 total.

• Battle force fleet 286 ships and submarines, compared to 292 ships and submarines. (CSBA)

• 11 aircraft carriers versus 12 in FY 2004. (CSBA)

– Air Force • Active duty end strength

projected to decline 48,000.

If Not Defense, Then What?I want to say one word

to you. Just one word. Are you listening?

“Logistics”

Distribution & Logistics

Why Logistics?• Facilitate Cargo Handling

& Transportation• Done Well it Lowers

Costs & Capital• Is Its Own Industry in

Today’s Global Economy• Done Very Well it Attracts

Other Business

Distribution & LogisticsMajor Drivers of the

Regional Economy• Port

– Over 30,000 jobs attributable to the Port. (ODU)

– Freight movements expected to increase dramatically in next 20 years from 2 million TEUs in 2005 to 5 Million by 2030. (Moffat & Nichol)

Distribution & LogisticsMajor Drivers of the

Regional Economy• Port

– APM Terminals investing $450 million in a new 300-acre container terminal in Portsmouth.• 2.1M TEUs Per Year• Phase1 2007• Finished 2009.

Distribution & LogisticsMajor Drivers of the

Regional Economy• Port

– Fourth VPA Terminal– 600-acre Craney

Island– $2,200,000,000

Investment– Stage 1 2017– 2.5 million TEUs/year

Distribution & LogisticsMajor Drivers of the

Regional Economy• Port

– Majority moved by truck • Increase 80 percent over

the next 20 years• Rail to grow 40 percent

too– By 2026, congestion will

reduce peak hour speed to 25 MPH.

– Traffic congestion affects rail too at intermodal transfer points.

Distribution & LogisticsMajor Drivers of the

Regional Economy• Port

– Rail could carry more – Heartland Corridor

project stretching from Norfolk to Chicago.• Cuts 233 miles from

the existing route• Reduce travel time by

a day and a half.

Distribution & LogisticsMajor Drivers of the

Regional Economy• Port

– Hampton Roads Transportation Authority

• Third Crossing• Southeastern Parkway• Dominion Boulevard • Midtown Tunnel• U.S. Route 460 • Widening I-64 (Peninsula)• Widening I-64 (Southside)

Distribution & LogisticsPort Business Trends• Outsourced

Manufacturing/US Imports

• Big Box Retailer Distribution Centers

– 10 To 15 Million SF are already In use

– Additional 20 to 60 Million SF Will Be Needed by 2030

Major Distribution Center Locations

Near Major Transportation Routes

Distribution & Logistics

Port Business Trends • An Opportunity

– $100bn in East Coast Containerized Cargo is Discretionary and its Growing

– All Of It Needs To Be Handled and Managed• Represents roughly $4 - $6bn in logistics services

– Handle It In Hampton Roads• Capture $1bn in logistics work??

Distribution & LogisticsPort Business Trends• Customers Desire:

– Low port cost and diverse services

– Cargo handling outside the port– Pre-zoned and available land – Efficient Transportation– Logistic Services – Distribution Center Development

• Door-to-Door Infrastructure• Friendly Business Environment

Distribution & LogisticsLand Use Planning• Work to identify best

locations– Good infrastructure

• Utilities• Roads

– Inexpensive Land– Good Labor Force– Buffers to non-

complimentary uses• Residential• Schools

One Consideration

US 460

Norfolk Southern

US 58

CSX

Buffer Area(s)

Industrial Area

Distribution & Logistics

Closing Thoughts?• Port Related Foundation

– Focused on Growth

• APM is Open• Craney Island in Progress• Heartland Corridor Opens

2009• New US 460• Panama Canal

Expanding 2014

• Conclusions?

• Questions?

Thank You!

Robert SharakVice President

Hampton Roads Partnership430 World Trade Center

Norfolk, VA 23510757-625-4696 (P)757-625-4684 (F)rsharak@hrp.org

www.hrp.org