(The following story by Kathy Adams appeared on The Virginian-Pilot website on February 11, 2009.)
NORFOLK, Va. — With Hampton Roads’ home prices, retail sales and port traffic all down, 2008 delivered more bad economic news than good.
Coal exports were one shining exception.
Dumpings at Hampton Roads’ three coal terminals skyrocketed nearly 50 percent last year to 42.3 million tons, making 2008 the best year in more than a decade.
“It was an exceptionally strong year,” said Mark Bower, assistant vice president of export, metallurgical and industrial coal marketing for Norfolk Southern Corp., which operates the Pier 6 coal terminal at Lambert’s Point Docks in Norfolk.
A “perfect storm” of international events was responsible for Hampton Roads’ coal renaissance, said David Host, president and chief executive officer of Norfolk ship agency T. Parker Host Inc. A cold winter in China, flooding in Australian coal mines, high shipping rates and the weak U.S. dollar all contributed to high demand, he said.
But that “storm” has passed. While September saw coal colliers lining up in queues of more than 15 ships waiting to load, the line ha s only two or three ships these days, Host said.
Industry analysts predict that the coal market will continue to cool this year, driven partially by manufacturing slowdowns and cheaper natural gas for utilities.
But Hampton Roads still should see plenty of business, Host said. Norfolk is home to Pier 6, and Newport News has Dominion Terminal Associates and Kinder Morgan Energy Partners LP’s Pier IX.
At a recent coal conference, Host heard estimates that exports of metallurgical coal – used to make steel – might fall 25 percent and exports of steam coal – used to produce electricity – might fall 40 percent. Even if those predictions come to pass, he said, the local terminals would export 26 million tons this year, Host said.
“It’ll still be a good year,” he said. Before 2008, “the last year that we shipped more than 26 million tons of export out of Hampton Roads was 1998.”
That could protect the jobs created during last year’s surge. Dominion Terminal Associates hired 25 people and Pier IX hired 10. Pier 6 also upped staffing, Bower said, but Norfolk Southern could not provide numbers Tuesday.
Despite slowing shipments in November, December and January, work has held relatively steady for the docking pilots who help guide ships into the port, said Jeff Davidson, president of the Association of Virginia Docking Pilots.
“It’s lightened up some, but it’s not bad,” he said. “It’s down probably about 25 percent” from the fall.
Cape Henry Launch Service, which provides water taxis and delivers supplies to vessels at anchorage, hasn’t been so lucky.
“The coal market has dropped out, and it has affected us directly,” owner Gary Bradford said. “The ships can come in and go straight to the pier, so they need no launch service.”
The launch service is exploring new businesses to compensate, such as removing sewage from ships, he said.