Joseph A. Dorto, the long-time chief executive officer of Virginia International Terminals (VIT), the operating arm of the Virginia Port Authority (VPA), announced Tuesday that he will retire at the end of March.
“I’ve been here for 34 years and it is time,” Dorto said. “You always hear, ‘leave on a high note’ and we just completed the second best year in our history, so I think this is the right time.”
Dorto joined the Virginia Port Authority in 1979 as the director of trade development shortly after all of the municipally-owned general cargo terminals in the Hampton Roads Harbor were unified under the VPA. Nine years later Dorto moved over to the VPA’s private terminal-operating company, VIT, where he eventually became CEO.
Dorto announced his retirement at a time of uncertainty about the future of the port, and the day after a briefing about the port by the Virginia Joint Legislative Audit and Review Commission (JLARC) to the state’s House Appropriations Committee. JLARC said its review had come to these key findings:
- VPA’s “market performance and outlook appear to be more positive than suggested” by a recent report by the London-based firm Drewry.
- The VPA “does not appear to be financially unsustainable, as suggested by the Drewry report. The port authority is positioned to generate a net profit during the next five years, particularly given the projected growth in cargo volume during that period.”
- "Administrative expenses could be reduced by eliminating duplicative administrative functions shared by the Virginia Port Authority and Virginia International Terminals."
- "Virginia International Terminals and Virginia Port Authority executives are compensated at levels higher than most other port authority executives in the United States."
JLARC said that nine VPA and VIT executives collectively made $2.9 million in fiscal year 2012 and that staff of the two organizations perform similar functions
, such as human resources and finance, but said the port's current organizational structure “does not appear to have been a major contributor to financial challenges.” Dorto had a base salary of $537,379, a bonus of $192,335, and total cash compensation of $754,330 when car allowance was included.
VPA and VIT operations have been under review since May, when APM Terminals, a subsidiary of the A.P. Moller Maersk group, made an offer to take over from VIT and operate the VPA facilities
in Hampton Roads, as well as its inland terminal. It did so under a Virginia law that allows companies to make bids to privately operate state-owned assets such as roads, bridges, railroads and ports.
Three similar bids to privatize the ports in 2009 were rejected by the state.
Since APM Terminals’ bid was submitted, a competing bid has been made by Maher Terminals, J.P. Morgan, and RREEF, an infrastructure fund affiliated with Deutsche Bank. (Another bid by the Carlyle Group has since been withdrawn.)
As part of the effort to evaluate the APM Terminals and Maher bids, VIT was also asked to submit a bid to continue to operate the terminals.
Dorto, throughout his career in Virginia, has had the responsibility of negotiating contracts with global steamship lines that call at The Port of Virginia.
In 2007, APM Terminals opened a privately-owned container terminal in Portsmouth that is widely considered to be the most technologically advanced in the United States.
While APM Terminals' sister company Maersk, as well as Evergreen, signed contracts to use the terminal, its efforts to attract other business were frustrated by the fact VIT had signed contracts with other carriers.
In the press release announcing his retirement, the VPA said it was Dorto who was instrumental in getting 95 percent of the steamship lines calling the port signed to long-term, 10-year contracts.
APM Terminals eventually leased its terminal to the VPA, and yesterday's announcement noted "Dorto played a critical role in negotiating the VPA’s 20-year lease with APM Terminals to operate that company’s facility in Portsmouth and establishing a second ‘port unification’ with all of the container terminals under the control of the VPA."
“Bringing that terminal into our operation was my proudest professional accomplishment,” he said.
"I will miss him greatly as a colleague and friend,” said Rodney W. Oliver, the VPA’s interim executive director. “His announcement comes at a time when the port has re-established its volumes and is rebounding from the downturn in the economy."
The generally favorable JLARC said "VIT Terminals performed better than ports of Savannah and New York/New Jersey after the recession." JLARC said while VIT Terminals fared worse in 2008-2009 during the recession, they recovered more quickly than other ports.
The JLARC report also noted Hampton Roads and New York dominate the movement of cargo from the East Coast to the Midwest, controlling 40 and 41 percent of the traffic moving to and from Illinois, Ohio, Michigan and Missouri, respectively, compared to just 19 percent for other East Coast ports.
VPA said at its board's Jan. 22 meeting commissioners will vote for the appointment of Joseph P. Ruddy, as the successor to Dorto. Ruddy is VIT’s executive vice president and chief operating officer.
VPA owns and operates four general cargo facilities on behalf of the state: Norfolk International Terminals, Portsmouth Marine Terminal, Newport News Marine Terminal and the Virginia Inland Port in Warren County. In addition, the VPA leases and operates APM Terminals in Portsmouth and the Port of Richmond. - Chris Dupin