Excerpt from Wall St. Journal about our Port
Excerpted and condensed from the Wall Street Journal, Market Watch, Feb. 16, 2011, 6:36 p.m. EST
New Deals Buoy Richmond Port
By Bobby White
RICHMOND—Investments made to boost Richmond’s ailing port into a major gateway for car shipments appear to be paying off as manufacturers begin to move in.
In January, Richmond announced that car maker Subaru of America Inc. had agreed to a five-year contract to import and process more than 30,000 cars a year through the port. The deal followed the September launch of Honda Motor (NYSE:HMC) Co.’s 15-year agreement with the city, which will see it import about 150,000 vehicles through Richmond annually.
The combined contracts will net Richmond more than $90 million in tariff fees that it will levy on the car shipments over the duration of the agreements. The contracts also will result in about 200 new jobs in direct and ancillary positions, said James Matzorkis, executive director of the Port of Richmond.
In addition, the East Bay city is negotiating with Toyota Motor (NYSE:TM) Corp. and Chinese auto maker BYD (THE:HK:1211) Co. to ship cars through the port. A Toyota spokeswoman said the company was actively looking at all Bay Area ports and a decision has yet to be made about Richmond. BYD didn’t return calls seeking comment.
The new contracts arrive after a tough stretch for Richmond in the 1990s and earlier this decade, as the port faced an expensive environmental cleanup and lost business to cities with more up-to-date shipping facilities.
“We’ve taken some hits in the past, but we’re definitely making gains now,” said Mr. Matzorkis.
Richmond leaders also say the improved port will provide an economic shot in the arm to ailing city coffers. Richmond, population 102,000, had to cut some city services for the year ending June 30 to offset a drop in tax revenue. The city’s unemployment rate is 17.5%, nearly double the national average.
“We’re like many other cities out there who are struggling,” said Tom Butt, a Richmond city council member. “So to see such a return on our investment is huge.”
The port faces stiff competition from larger rivals along the West Coast. But a shift within the shipping industry toward cargo-container traffic pushed car makers to seek relationships with midsize and small ports, buoying ports like Richmond.
