Southwest Virginia is one of the best places in the Commonwealth to view fall foliage, with its scenic country roads leading to peaks with spectacular views of the surrounding forest.
Strategic
International Airport Virginia’s next step to logistics dominance
Careful
The Norfolk & Western Class J #611, designed and built at the company’s East End Shops in Roanoke, is considered one of the most powerful, technologically advanced steam locomotives ever built and is the only surviving Class J steam engine. Retired from regular service in 1959, the 611 now runs a limited schedule of passenger excursions in the Shenandoah Valley each fall.
How Virginia’s Infrastructure Sets Businesses up to Succeed
HIGH-QUALITY
INFRASTRUCTURE is the underpinning of any successful business ecosystem. The most business-friendly policies and incentives will struggle to draw investment to an area where companies are not physically set up to succeed. High-quality infrastructure helps businesses operate without interruption, enhances resilience, reduces operating costs, and allows for quicker access to customers and suppliers.
With companies looking for any advantage they can find in a competitive business environment, Virginia has positioned itself as a trusted partner. Businesses can rely on Virginia’s infrastructure, from The Port of Virginia’s facilities to our airports to our road and rail networks, to get materials and products to their destinations quickly and smoothly. The Commonwealth is home to one of the most advanced ports in the world, four major cargo service airports, and more than 3,000 miles of freight rail. Virginia is also home to the main East Coast passenger highway (Interstate 95) and one of the busiest truck routes in the country (Interstate 81). The Commonwealth’s proactive improvements to those assets have helped to position Virginia as the No. 2 state for infrastructure in the country, according to CNBC’s 2025 Top States for Business ranking.
In this issue of Virginia Economic Review, we take an in-depth look at Virginia’s
infrastructure and the investments the Commonwealth makes to improve it, both for the benefits it brings businesses and the quality of life it grants its residents. We discuss connectivity in Virginia, the possibility of cargo service expansions at Washington Dulles International Airport, the cold chain and warehousing industries in the Commonwealth, and three different possibilities for Virginia’s infrastructure future — as a hub for intermodal shipping, a testing ground for the latest aviation technologies at NASA’s Langley Research Center, and a location for Advanced Air Mobility technologies. Also inside are discussions with Stephen Edwards, CEO of the Virginia Port Authority and The Port of Virginia, and Joe Dunlap, a supply chain industry veteran who is now chief supply chain executive at Legacy Investing.
We hope you enjoy this look at infrastructure in Virginia and how the Commonwealth has laid a foundation that sets companies up for success. Now let’s get moving.
Jason El Koubi President and CEO, Virginia Economic Development Partnership
WASHINGTON DULLES INTERNATIONAL AIRPORT
19% 8.5%
Increase in import + export weight, year-over-year Rotate, 2025
Increase in passenger activity, year-over-year
Metropolitan Washington Airports Authority, 2025
Increase in passenger activity, year-over-year
Norfolk International Airport, 2024
RICHMOND INTERNATIONAL AIRPORT
Increase in total cargo, year-over-year
THE PORT OF VIRGINIA
Exports Imports
3.5M 1.8M 1.7M
NORFOLK INTERNATIONAL AIRPORT # 6
Total
Twenty-foot equivalent units (TEU) volume
The Port of Virginia, 2024
6.9% 7.8% # 3
Richmond International Airport, 2024
$109B
Total cargo value The Port of Virginia, 2024
Container Port (TEUs) Business Facilities, 2025
TOP 10 NORFOLK ROANOKE
Logistics Hubs Business Facilities, 2025
25 U.S. Cities Best Prepared to Handle a Natural Disaster Business Facilities, 2025
This next phase of our expansion will allow us to continue to execute our strategy as the leader in power generation integration, again doubling our capacity in a very dynamic and fast-paced environment.
MARGARET SHAIA CEO, Acoustical Sheetmetal Company
Selected Virginia Wins
350
New Jobs
$45.8M
CapEx
Acoustical Sheetmetal Company, a manufacturer of highly engineered steel and aluminum enclosures for the power generation industry, will invest $45.8 million to expand its operations by building an additional 250,000-sq.-ft. building and adding significant machinery in the city of Virginia Beach. The project will create 350 jobs.
This is Acoustical Sheetmetal’s third expansion in its hometown of Virginia Beach since 2019. The company has continued to select Virginia because of its quality workforce, proximity to suppliers and customers, and business-friendly environment.
Support for Acoustical Sheetmetal’s job creation will be provided through the Virginia Talent Accelerator Program, ranked the No. 1 Customized Workforce Training Program in the United States by Business Facilities for the third consecutive year in 2025. The program, created by VEDP in collaboration with higher education partners, accelerates new facility startups and expansions through the direct delivery of recruitment and training services that are fully customized to a company’s unique products, processes, equipment, standards, and culture. All program services are provided at no cost to qualified new and expanding companies as an incentive for job creation.
Acoustical Sheetmetal Company, Virginia Beach
Selected Virginia Wins
Greater Richmond
Strickland Manufacturing
Jobs: 20 New Jobs
CapEx: $3.3M
Locality: Goochland County
Hampton Roads
Acoustical Sheetmetal
Company
Jobs: 350 New Jobs
CapEx: $45.8M
Locality: City of Virginia Beach
Land ‘N’ Sea
Distributing, Inc.
Jobs: 29 New Jobs
CapEx: $1.1M
Locality: City of Norfolk
New River Valley
ORBCOMM Inc.
Jobs: 51 New Jobs
CapEx: $3M
Locality: Loudoun County
Stratos Solutions Inc.
Jobs: 28 New Jobs
CapEx: $1.6M
Locality: Fairfax County
Technomics, Inc.
Jobs: 248 New Jobs
CapEx: $5.4M
Locality: Arlington County
Roanoke Region
Patton Logistics Group
Jobs: 25 New Jobs
CapEx: $10M
Locality: Pulaski County
Northern Virginia
22nd Century
Technologies Inc.
Jobs: 880 New Jobs
CapEx: $1M
Locality: Fairfax County
Medallia
Jobs: 100 New Jobs
CapEx: $2M
Locality: Fairfax County
Integer
Jobs: 83 New Jobs
Locality: City of Salem
QualiChem, Inc.
Jobs: 12 New Jobs
CapEx: $9M
Locality: City of Salem
Shenandoah Valley Caf2Code
Jobs: 20 New Jobs
CapEx: $135K
Locality: City of Harrisonburg
Southern Virginia
Green Recycle USA LLC
Jobs: 28 New Jobs
CapEx: $4.3M
Locality: Pittsylvania County
MerryGoRound, Inc
Jobs: 203 New Jobs
CapEx: $10M
Locality: Pittsylvania County
WB Alloys
Jobs: 30 New Jobs
CapEx: $6.6M
Locality: City of Danville
Southwest Virginia
White Rock Truss & Components, LLC
Jobs: 27 New Jobs
CapEx: $1.5M
Locality: Lee County
Northern Shenandoah Valley
Northern Virginia
Shenandoah Valley
Central Virginia
Washington, D.C.
Greater Fredericksburg
Lynchburg Region
Southern Virginia
South Centr al Virg inia
Greater Richmond
Northern Neck
Middle Peninsula
Virginia’s Gateway Region
Hampton Roads
Easte rn Sh
B ILT T
Virginia’s infrastructure investments underpin business resiliency
A growing segment of Virginia’s business and economic growth arises from relationships with companies and government entities across the nation and around the world — and our airports provide the connectivity that helps drive all this business activity.
JACK POTTER President and CEO, Metropolitan Washington Airports Authority
Connections are an essential foundation of business success — and businesses trust Virginia’s infrastructure to provide a multimodal transportation system that reliably connects them to suppliers, customers, and partners. The Commonwealth is home to one of the East Coast’s top seaports, four major cargo service airports, 12 freight railroads and more than 3,000 miles of freight rail, and some of the country’s most heavily traveled truck routes. More importantly, Virginia has a proactive stance on investing in improvements in the essential travel corridors that keep businesses connected.
It’s this emphasis on connectivity that drives many of the Virginia Department of Transportation’s (VDOT) more than 4,500 active improvement projects.
“Virginia’s highway network provides a critical link in the larger highway system within the eastern United States, making it all the more essential that VDOT make continued investments in its safety and reliability,” said Catherine C. McGhee, P.E., chief deputy commissioner for VDOT.
Ongoing projects include work to add travel lanes and other improvements
to the critical north-south backbone of the East Coast’s freight network. Nearly 50% of the state’s value of goods is transported along Interstate 81, which has the highest per capita truck volume in Virginia. VDOT reports that the corridor handles approximately $300 billion in goods and services each year. Continuous improvements are essential for ensuring the high degree of travel predictability on which businesses and freight haulers rely.
In addition, McGhee pointed out, “Widening Interstate 64 between Hampton Roads and Richmond will enhance connectivity and support movement to and from The Port of Virginia. Expanding our network of express lanes on Interstate 495 will reduce congestion in a region where population and employment opportunities continue to grow.”
This dense network is supported by a web of warehouses across the state. In the last three years alone, more than 30 million square feet of new and expanded warehouse space has been announced throughout Virginia, totaling an investment of more than $6 billion.
Travelers and shippers rely on the reliability afforded by these essential interstate connections. However, rail remains a leading conduit for cargo crossing Virginia because rail access reduces per-ton-mile shipping costs and minimizes reliance on long-haul trucking. The Association of American Railroads estimates it would take approximately 6.5 million trucks to handle the freight that moved by rail in Virginia in 2022. The Commonwealth is home to more than 3,000 miles of freight rail, all part of an ecosystem that offers direct service to points including Detroit, Chicago, and Kansas City. While this mileage puts the state at 21st in rail network size, the Virginia Department of Rail and Public Transportation (DRPT) notes that Virginia outperforms in terms of originating and terminating freight rail carloads. It comes in 13th for carload origin and 10th for carload termination.
To keep up with the growing rate of goods traveling by freight, The Port of Virginia has completed an $83 million investment in expanding its rail yard. With this expansion, the port positioned itself to move 2 million twenty-foot equivalent units (TEUs) of cargo in 2024, a 13%
VIRGINIA’S ROADWAY INFRASTRUCTURE
VDOT maintains and operates:
59,672 6 6 4 21,000+ 4,500+
increase over its prior year capacity. Cargo at the port sees an average rail-ready dwell time — time spent at a scheduled stop without moving — of 32 hours.
The port isn’t the only party investing in rail enhancements. Through its Transforming Freight in Virginia initiative, DRPT has plans for approximately 123 freight rail improvement projects through 2042. These projects, totaling approximately $536 million, aim to address bottlenecks impacting both passenger and freight rail operations. This includes investments in Class I railroads across the state to reduce capacity constraints, mitigate operational chokepoints, and increase efficiency.
Norfolk Southern Corporation points out that these investments help reduce
per-ton-mile shipping costs and minimize reliance on long-haul trucking. The rail operator infrastructure is the backbone of its ability to deliver safe, timely, and costeffective service. Investments in modern yards, intermodal terminals, and predictive maintenance systems help minimize delays and ensure consistent performance.
Norfolk Southern operates 1,990 miles of track across Virginia and works closely with state agencies to provide manufacturers with direct access to highperformance logistics infrastructure that supports growth and efficiency. The rail operator points to the Commonwealth Crossing Business Centre in Henry County as one of the most promising locations for leveraging freight efficiency to empower economic development.
Source: Virginia Department of Transportation
Norfolk Southern calls the industrial site a model of collaboration; it worked with state and local partners and industrial developers to create a 200-acre industrial site primed to attract quality businesses to the region.
CSX Transportation, the other major rail provider in the Commonwealth, operates nearly 2,000 miles of Virginia track to go with several other facilities. The company maintains a portfolio of about 1,000 rail-served sites and has launched the CSX Select Site program to identify, evaluate, and improve properties for industrial use.
AIRPORT EXPANSIONS ENHANCE EFFICIENCY
Virginia’s airports are also positioned to support upward movement in business and cargo travel. “A growing segment of Virginia’s business and economic growth
arises from relationships with companies and government entities across the nation and around the world — and our airports provide the connectivity that helps drive all this business activity,” said Jack Potter, president and CEO of the Metropolitan Washington Airports Authority (MWAA).
Washington Dulles International Airport has seen, on average, 222 tons of cargo each year since 2021, and capacity continues to climb. For the second year, Dulles has been ranked as the fastest-growing international airport in America, MWAA reports. Over the next 15 years, MWAA plans to invest $9 billion in airport infrastructure to accommodate demand at Dulles and Ronald Reagan Washington National Airport. “The airports are a key factor in Virginia’s designation as a top state for
business — which helps spur the growth of the airports,” Potter said.
These capital investments aim to increase airport efficiency, benefiting customers and businesses alike. Projects include new gates and a Metrorail station at Dulles, which have led airlines to increase their nonstop flights from Dulles to destinations around the globe. They also include technology to move travelers more efficiently through the airport.
Queue Hub is an airport intelligence platform developed in-house by MWAA Labs to display live wait times at TSA security checkpoints at Ronald Reagan Washington National Airport. It is also in the testing phase at Dulles checkpoints. Real-time information is available in-
terminal and online, providing business passengers with a useful planning tool.
Through integrations with TSA and Custom Border Protection systems, Queue Hub applies machine learning algorithms and custom AI models to automatically deploy resources to the right lanes at the right time to minimize bottlenecks. The technology has reduced security wait times by an estimated 15% since becoming operational in 2023. In the future, MWAA expects its AI investments to speed aircraft turnaround times for even greater efficiency.
Through this and other investments in efficiency, Virginia businesses gain added assurance that their people and goods can get to their destinations on time.
VIRGINIA’S RAIL ADVANTAGES
75% Rail offers: Reduction in emissions by moving freight by rail instead of truck
Source: U.S. Department of Transportation Federal Railway Administration, 2022
THE NEXT
Washington Dulles International Airport
Strategic cargo play could make Washington Dulles International Airport Virginia’s next step to logistics dominance
IT’S NOT THE FIRST TIME
Washington Dulles International Airport, having served record numbers of passengers the past two years, has eyed an expansion of its operations, infrastructure, and ultimately, air cargo volume.
But this time, circumstances are different. This favorable environment is owed in part to Virginia’s other puzzle pieces falling into place, such as the massive $1.4 billion modernization effort completed at The Port of Virginia that could help grease the wheels of Dulles’ cargo rollers. And then there’s the $7 billion already being pumped into the Northern Virginia passenger hub, thanks to a newly negotiated airline agreement, which opens the door for significant infrastructure projects to roll out over the next 15 years.
These momentum boosters include a future fifth airport runway and a $700 million United Airlines concourse slated to open in 2026. Each of these strategic upgrades carries an upside to organically boost the planned cargo expansion.
“With an increasing volume of flights and passengers, there’s an opportunity at a minimum for additional belly cargo,” said Thomas Beatty, Metropolitan Washington Airports Authority (MWAA) executive vice president and chief operating officer.
Translation: With the coming surge in passenger flight capacity, your checked bag could be stowed in the same airplane belly as a load of fast-fashion merchandise that needs to arrive before the next TikTok trend goes viral.
And that’s just one way Dulles’ passenger flight wins can easily translate to cargo wins.
“I think the other big thing is that we just updated the Washington Dulles
International Airport Master Plan,” Beatty said. That comprehensive vision for the airport’s next 20 to 25 years is currently on its way to the Federal Aviation Administration for review.
“Dulles is in the strongest position in its history,” Beatty added.
BUILT-IN ADVANTAGES
These developments are additives for the fresh fuel in what’s been a sustained cargo gateway play for Dulles. The airport has grown its cargo haul over six decades to more than 300,000 tons annually. But while the airport is collecting and dispersing cargo as far as Ohio, Pennsylvania, New York, Connecticut, and the Carolinas, its total still pales to that of international competitors John F. Kennedy in New York (1.7 million tons), Newark (711,000), and Philadelphia (524,000).
Dulles already has a trove of built-in advantages that have helped it evolve into a thriving passenger airline hub with 46 airlines serving 160 nonstop international destinations. These include a strategic location that’s within a 24-hour drive of 70% of the U.S. population, a moderate climate, and the airport’s proximity to the Capital Beltway (Interstates 95 and 495), as well as I-270, I-66, I-81, and Route 15.
Additionally, Dulles’ sprawling 12,000acre real estate treasure puts it in rarefied air not just along the East Coast, but across the globe. As other airports’ cargo facilities are increasingly cramped for space, the global demand for air cargo capacity saw double-digit growth in 2024, further raising the volume on Dulles’ air cargo conversation.
“It’s always been a part of the conversation,” said Scott York, executive director of the Committee for Dulles, a nonprofit corporation that promotes the economic vitality of Dulles and its
environs, and former chairman of the Loudoun County Board of Supervisors. “We’ve discussed this topic off and on during my time on the Board. I think the opportunity of getting cargo there is much closer than in the past.”
The obstacles are twofold, but steep nonetheless: growing cargo-handling capabilities while enticing Virginia’s businesses to warm up to Dulles even more. So the Committee for Dulles held a joint meeting of its Legislative and Transportation & Economic Development committees, where a discussion took place among key stakeholders and decision-makers for the state, the airport, and other agencies.
ASKING THE RIGHT QUESTIONS
Not long after this meeting of the minds, a feasibility study of Dulles’ path to a cargo gateway was undertaken. It sought to explore three questions, the answers to which would set the flight plan for subsequent workstreams:
1. Is there enough cargo market share over the next five to 10 years to pursue expansion? Yes.
2. Does Dulles currently have the capacity and infrastructure to attract more demand? Not exactly, but it’s a little more complicated than that.
3. If the answers to questions 1 and 2 are “Yes,” does the project substantially matter to the Commonwealth? Yes, once a couple of the wrinkles in question 2 are ironed out.
Global air cargo consulting firm Rotate was charged with answering these questions, warts and all. “I think there are a lot of good things happening at Dulles,” said Ryan Keyrouse, the firm’s co-founder and CEO. “I was really surprised at what I found.”
The study also identified opportunities for cargo at the airport, including that local exports were bypassing Dulles. This freight in an area’s local footprint is known as an airport’s “catchment,” and when it loses cargo in its backyard, it’s known as “leaking.” Dulles was found to be leaking about half its catchment of exports as freight forwarders and logistics companies consolidated cargo at out-of-state airports as far away as Chicago to capitalize on economies of scale.
The study also found that Dulles was nearly running at its capacity for cargo — with some nuanced exceptions that could be among the first dominoes to fall along the road to expansion.
For example, while wide-bellied passenger aircraft arrived at Dulles from European departure points operating nearly at full capacity, return flights were far emptier — providing low-hanging-fruit space that could quickly accelerate momentum for Dulles’ cargo play.
“Quick wins will get them a little bit farther down the road,” Keyrouse said. “They’re connected to capitals all over the world with wide-bodied capacity.”
One other finding? While these passenger flights offered a golden ticket for cargo, it only pertained to certain cargo. Dulles was found to underperform when it came to sensitive or even dangerous materials requiring more high-maintenance transport.
READY FOR LAUNCH
The Dulles study didn’t just reveal potential opportunities to leverage and challenges to thwart en route to the airport’s ascension to becoming a cargo gateway. It also created several big boxes that the team of airport, state, and regional leaders will need to check, including:
◾ Scoring quick wins, including effectively defending their cargo catchment, securing anchor tenants, and hiring dedicated subject matter experts to lead the team forward
◾ Making short-term gains, including improved handling facilities and increasing storage capacity in efficient, cost-effective ways
I think the opportunity of getting cargo there is much closer than in the past.
SCOTT
YORK Executive Director, The Committee for Dulles
◾ Engaging the entire ecosystem with the story about why transforming Dulles into a cargo gateway just makes sense: freight forwarders, potential neighboring manufacturers, and the global cargo community
And of course, there’s also unfettered, transparent collaboration, which is table stakes in the air cargo industry. Keyrouse suggested that the team-building infrastructure ultimately charged with building the cargo infrastructure nailed this down from the get-go.
From there, it’s a balancing act on a massive scale, not just when and where to spend, commit, and collaborate, but also how to optimally build out the infrastructure that will support the increased cargo volume.
To that point, Beatty cited the deep analysis being conducted in line with the Washington Dulles International Airport Master Plan to find the “Goldilocks zone” between eliminating gridlock and avoiding empty buildings.
Much of the effort to transform Dulles into a cargo gateway depends on being able to leverage the highly successful growth mindset, proven experience, and problem-solving savvy demonstrated from the passenger side of commercial aviation to the cargo side.
“We’re here to solve problems,” said Beatty, who pointed to airport
leadership’s high-profile string of recent wins. “We’re open and transparent. We work with many airlines, many tenants, many concessions.”
And then there are also reasons why it needs to happen. Leading the list is that Virginia’s core industries require more and often specialized cargo capabilities, whether that means biopharmaceuticals, aerospace and defense, or advanced materials. These are industries that necessitate specialized air cargo considerations, from cold storage to heightened security.
And that’s perhaps the most telling microcosm for stakeholders looking to elevate cargo at Dulles: building the right infrastructure to support the right business at the right time, investment by investment, milestone by milestone.
At the end of the day, the idea of a major cargo gateway at Dulles isn’t just a pitch to the community of cargo decision-makers, global markets, or even the people of Virginia and beyond. Or a swing at an upper-deck expansion. It’s a promise to continue making Virginia the best partner it can possibly be, to everyone.
“I see a lot more enthusiasm because of the possibilities being more real now,” York said. “I think the study helped cement that opportunity. Not only in the minds of those outside the airport, but also those inside.”
Increased passenger activity at Washington Dulles International Airport offers the opportunity to transport additional cargo on passenger flights.
A CONVERSATION WITH STEPHEN EDWARDS
Stephen Edwards has served as the CEO and executive director of The Port of Virginia since 2021. VEDP Vice President of Logistics Eric Jehu spoke with Edwards about improvements at the port, how trade policy affects the port and its customers, and how the port serves as an economic engine for Virginia.
Eric Jehu: The Port of Virginia has been called “America’s Most Modern Gateway.” What is a gateway and what makes The Port of Virginia the most modern?
Stephen Edwards: A gateway is different from a port in the sense that, for Virginia, we will be the means by which people can move goods through the transportation chain, and not just a means to load and unload a ship. We’re determined that what we’ll be is exactly that: a gateway into and out of Virginia, the East Coast, and the Midwest. So we’re going to provide, hopefully, an advantage to people who wish to import and export through the Atlantic.
The tagline “America’s Most Modern Gateway” — our brand, really — reflects the fact that we believe we’re building, and in some cases have built, a really special gateway. That starts at the sea buoy when we talk about two-way channels for ultra-large ships, running through modern terminals, large cranes with great capability, using technology appropriately to move cargo, and then dealing with chassis fleets into trucking environments, providing truckers with service levels they can’t get in other ports. And integrating all that with a state that is investing in road infrastructure. When you come to the port, you get a differentiated service that will encourage you to do more business with us.
Jehu: Another thing that’s unique to your brand is the Virginia Model. Can you explain what that is and why it is so special?
Edwards: The Virginia Model is that the Virginia Port Authority is owned by the Commonwealth of Virginia, but we also operate our facilities. Being
owner and operator of the port means we can really influence good outcomes for people who choose to use Virginia, and we can then encourage people to come here. If we think that through, it answers the questions, “Who operates the terminals? Who owns the terminals? Who invests in the terminals? Who deploys technology in the terminals?”
If we think back the last few years, we’ve had the pandemic and a surge of cargo that came in during the 2021–2022 period. We had the tragic disaster of the Key Bridge collapse in Baltimore. It was a big pivot for us to pick up and serve the Baltimore market for a period of time and required a really quick response. When service levels are under pressure for whatever reason, the Virginia Model means ensuring that Virginia can respond.
We’re a very agile organization, which means that people should not experience service issues here that they may experience elsewhere. If you’re a trucking company and you want a chassis, we’re going to have a chassis available in our fleet at all times. Like a utility would, you are going to plan for peaking or surges, and it ensures that the rest of our facilities are running very, very smoothly.
Jehu: That’s a unique model relative to most other ports in the country, too, if I understand correctly.
Edwards: Very much so, but it’s proven itself time and time again. When one part of the gateway is required to perhaps take a financial margin reduction on behalf of the whole, we’re not arguing over which part of the sector takes the loss. We’re making sure that the whole sector thrives at all times so we can ensure good financial results. But at the
same time, if there’s a little bit of pain to be taken on behalf of the whole, we’ll take the pain on behalf of the whole.
Jehu: What are some challenges the port is facing? How are you adapting to challenges taking place in the flow of goods, whether it’s geopolitical, climate, or otherwise?
Edwards: The biggest challenge at the moment is geopolitical. As the administration works through our trade policy as a nation, we’re seeing the flow of goods move not perhaps in line with the market, but in line with tariffs and changes to tariffs. Goods might be frontloaded to avoid a tariff, or they might
be held back to let a tariff agreement be settled. So the normal peak season that a lot of us have grown accustomed to in our industry of back-to-school goods arriving, followed by goods for the holiday season, has changed. It changed during the pandemic with a surge of purchasing. It’s also changing now as people ask, “What is the tariff deadline to get goods into the country?” On the import side, you’re seeing peaks and valleys that are not normal.
As this continues and as the administration negotiates trade agreements, I’m sure we’ll see more of it. And that says to all in our industry, I think, that you must have the agility
to move around those scenarios. As you make capital investment decisions that may require part of your capacity taken offline whilst you modernize, it may not be through the normal pattern. For all of us, it’s causing forecasting to be difficult. But at the same time, it just boils down to, “Be agile, be ready, and there will be good outcomes from it.”
Jehu: I think that ties directly into the concept of the port often as an economic engine. Certainly, the geopolitical environment makes attracting business investment challenging. We see surges and then pullbacks in projects, but there’s been a lot more of that recently. Could you quantify your response in broad
Electric trucks like this one at Norfolk International Terminals are part of The Port of Virginia’s efforts to reduce emissions and become carbon neutral by 2040. The port fulfills all of its electricity needs at its marine terminals from renewable resources.
categories of the wholesaler, distributor, or manufacturer, or a prospect that may not even be domiciled in Virginia but has taken advantage of the gateway?
Edwards: Let’s start with the manufacturer. I think the best example of manufacturing that can really work for a port, and where we add value, is where is somebody manufacturing for North American consumers domiciled so that we can serve them? If they’re importing components or raw materials and then adding value to those in their Virginia or North Carolina sites — wherever those sites may be — we can actually provide them a service level that enables those goods or commodities to come into their manufacturing location. That manufacturing company is going to need components from all over the world.
What you then need is a port that services the entire world, so we can’t be in a situation that we have one or two marine services. Whether someone wishes to source from the European Union, Asia, India, or Africa, we need to provide that sourcing capability so we truly add value to a manufacturer.
Let’s think about an exporter. The largest exports from our nation are agricultural, so how do we provide transload agricultural facilities in our gateway that can connect to that network of ships? How do we provide water depth that allows ships to leave or arrive full so we can get the lowest transport cost to or from our port? Our attraction of transload facilities to allow efficient movement of goods that could trade differently around the world on a dollar-per-ton basis allows us to provide some competitive cost advantage to those sectors.
In terms of attracting businesses, we want to ensure that we can bring as many port-centric businesses as possible. How do we get them to make investments and locate in Virginia? Through industrial developers, third-party logistics companies, and distributors. We need to do it across sectors, so we work with the communities.
Once
we have that business running through our port, most go on to expand...We’ve got good connectivity up and down the East Coast to communities. We firmly believe that once we manage to get someone into our state, there’s normally a step two and a step three as they expand operations.
STEPHEN EDWARDS CEO and Executive Director, The Port of Virginia
If we look at some of the successes recently — industrial development in Suffolk or some of the new investments going into New Kent County, how do we make sure that industrial development is planned within those communities, that the roads are in place to and from the port, and that we can then attract cargo owners and thirdparty logistics companies to marry with those industrial developers?
Once we have that business running through our port, most go on to expand. So, having got their footprints here, they found our service levels good, that Virginia is a great state for doing business. We’ve got good connectivity up and down the East Coast to communities. We firmly believe that once we manage to get someone into our state, there’s normally a step two and a step three as they expand operations.
Jehu: The next thing that comes to mind in all development is energy. There’s certainly a focus on ESG and renewables. I know that the port is very proud of being 100% renewable, and that much of the equipment on the terminal is electric. How does that factor into the current environment with shifts in energy and increased demand on energy overall? How do you fit into the broader picture, the finite resource of energy in that plan?
Edwards: I think you’re correct in saying it’s a strong ESG focus for a number of port users and prospective clients of the port. We’re fortunate in that we have a clean energy agreement. We purchase for our electric users. We’re buying only clean energy, and we take that off the grid. As we develop further electrification of our assets, we’re currently deploying a very large grant we secured from the federal government to accelerate that and continue on the pathway to being a cleaner port.
We’re doing it in a sensible way, not because we’ve put it up against a mandate. We believe we can get there with correct investments on the right cycle. That way, we’re not trying to push the envelope so hard, we’re going to fail on service or overpay for assets.
Quite the opposite — we’re doing this in a lifecycle replacement program that we expect will work very well.
By working with the utilities, we’re building in redundancy, better substations, and better capabilities so that we’re capable of greater uptime. Dominion Energy is building the Coastal Virginia Offshore Wind project, and as the port, we have a big role in servicing that. It’s going exceptionally well, and what I think it’s proven to us as a port, and hopefully to the wider community of marine users, is we’ve now built expertise in handling some of the largest components that are going to move across American ports.
We’ve taught ourselves, our workforce, and others that we are a harbor that can handle big construction and big components very, very well. We’re helping the utility establish the offshore wind farm, we’re using renewable energy, but we’ve also gained an expertise whilst doing it.
Jehu: So much of this conversation up to this point has been about the port’s development strategy, but I know there’s a broader picture. There’s the Freight Advisory Board and other entities like that, which are looking at freight demand in the Commonwealth and the nation. Can you give us your take on what the freight strategy might be for the Commonwealth as a whole, and how that fits into the national picture?
Edwards: I believe this is one of the greatest advantages that Virginia brings to people looking to make
inward investment. If you’re making an investment decision, you need to know that where you’re choosing to locate is going to care for freight not just today, but for the long term.
In Virginia, we make a point of ensuring that all municipalities build freight strategies into their planning. We don’t have the option to ignore it, which differentiates us from a number of other locations. Most importantly, because of the value the gateway brings to the Commonwealth, we’re building freight strategies around the infrastructure that’s being built. So, if you think of Hampton Roads, we know we must have fast access to Interstate 95. That fast access is Route 58, and that’s why we can develop distribution strategies in cities such as Suffolk.
Then you come to Interstate 64. We see the state investing in widening I-64 between Williamsburg and Richmond, and tying that to the Hampton Roads Bridge-Tunnel investment, which is the largest active infrastructure project on the Eastern Seaboard. You tie that together and it means fast freight movement into the corridors.
Jehu: We’ve talked extensively about over-the-road connectivity with truckers, but what about the relationship between your port and other modes of transport used by customers?
Edwards: We’re a large rail gateway with both Norfolk Southern and CSX and, historically, significant investments such as the Heartland Corridor, which allowed double-stack trains to run from Chicago to Norfolk. We’ve expanded
rail access at Norfolk International Terminals in the harbor here, so we’ve got great rail capability, a service level nobody can match. Then if we look at the Virginia Inland Port in Warren County, we’ve just further developed that facility. Part of that has also been road-rail separation to allow greater fluidity in that area.
The same thing applies for airports and air freight. How do you create an ecosystem that allows all the economic benefits to be brought together in a harbor, whether it’s an airport or a seaport? For us, the most important factor was making sure that the Commonwealth viewed the supply chain and logistics business as a key plank of our success. I think that’s wellrecognized within the Commonwealth and allows us all to prosper.
The result is that we get great support from the General Assembly and the administration, which allows us to say, “We’re going to take this industry and make it the best in the nation.” We have not just built infrastructure — we’ve got people who want to use it to provide a service advantage to the customer. I hope that’s recognized by the people who score and rank things. I think it is. There’s more to come, and that’s perhaps the best part of our story. We’ve got a lot more being delivered and a lot more reasons for people to come and talk to us.
For the full interview, visit www.vedp.org/Podcasts
Under The Port of Virginia’s “Virginia Model,” the Virginia Port Authority owns and operates its facilities, including the nation’s youngest chassis pool.
Food and beverage, pharmaceutical companies rely on cold chain infrastructure to succeed in Virginia
As Virginia businesses build out and improve their cold chain infrastructure, they must be creative to grab a stake in the nation’s $42 billion business.
While the cold chain is based on keeping perishable food, beverages, and pharmaceutical products cold enough that they don’t spoil from factory to transport to warehouse, success for smaller companies can rely as much on sound decisions and sustainable instincts as anything else.
No one knows this better than Devon Anders. He’s president of InterChange Group, a midsized Rockingham Countybased warehousing specialist that entered the cold storage business in 2019 after a valued customer asked him to.
“We went from being an 8-to-5 business to 24/7,” said Anders, who has since become intimately aware of the risks and rewards of cold storage. For all the high costs of entering the business, the financial rewards can be considerable. That’s what’s nudged entrepreneurs of all sizes in Virginia and across the globe to enter the industry.
A MATURING ECOSYSTEM
Virginia certainly has plenty going for it as a place to ship and store cold products. Today, the biggest driver for cold storage construction in Virginia is the local prevalence of many big players in food and beverage and pharmaceuticals in and around the Commonwealth. All these industries are increasingly dependent on temperaturecontrolled storage facilities, said Anders.
Cold storage facilities in Virginia tend to follow the industries they serve. For InterChange, that’s the food and beverage industry that has flourished along the Interstate 81 corridor in the Shenandoah Valley, which is home to four of the top five agricultural localities in the Commonwealth.
Other cold storage hotspots in Virginia have developed next to key pieces of internationally focused infrastructure — Air Cartage Express has cold storage facilities for pharmaceutical clients adjacent to Washington Dulles International Airport and in Suffolk, convenient to The Port of Virginia, while InterChange and other companies have opened facilities in Hampton Roads, convenient to the port’s facilities there.
When Anders was looking at entering an already-established industry, he knew he had to get creative. He knew he was going up against the big boys like Lineage, United States Cold Storage, and Americold, which already had footprints along the I-81 corridor. He had to differentiate himself from the competition. That’s when he got the idea of topping his warehouse roofs with solar panels when he built and later expanded the facility.
“We were the first in the state to do this,” he said. “I thought we’d missed the boat, but we were actually ahead of the curve.”
There’s not enough space on the warehouse roofs to generate sufficient solar power to refrigerate the entire building. Still, InterChange is offsetting roughly one-third of its monthly electric bill — which, next to its workforce of 400 employees, is one of its larger expenses. Seven years later, the solar paneling has already paid for itself, and with a projected lifespan of 20 years, the rest is gravy.
SPECULATIVE BUILD SLOWDOWN
In Virginia, and nationally, the postpandemic cold storage construction boom has slowed a bit. What’s not completely clear, said Anders, is where it will go from here. Broadly speaking, speculative cold storage construction is increasingly being replaced by build-tosuit opportunities, according to recent research by Colliers International.
Even then, the projected slowdown may be short-term, said the Colliers study, which estimates the average age of cold storage buildings in the nation’s
top markets at 31 years old. That will ultimately lead to a demand for more modern, efficient spaces and an increase in new cold storage construction. Concurrently, cold storage construction could also be boosted over time by global growth in the perishable product trade.
That’s why competitors like WCS Logistics, formerly Winchester Cold Storage, are looking to Virginia for growth. WCS was founded in 1917 as a company focused exclusively on apple storage, a strong business in its home markets of Frederick County and Winchester.
Just a few years later, it added 370,000 square feet of storage space on 14 floors and suddenly held the title of the largest apple storage facility in the world.
Within a decade, WCS evolved from storing apples on the floor to storing them in huge barrels. And in the 1950s, it started converting those to controlled atmosphere storage rooms. It wasn’t until the 1970s that it started to add freezers. Today, the company is completely out of the apple business and has transformed into a cold storage facility that houses products from frozen vegetables to poultry.
The shift made things more complicated for WCS — because industries where there is no room for compromise on room temperature require alarms for the alarms.
“I can’t even tell you how many different alarms we have across our facilities to alert us to any problems,” said Peter Yates, WCS’s chief operating officer and general manager. These automatic alarms are tied into everything from
freezer temperatures to the operation of the freezer condensers to the proper mixture of carbon dioxide and ammonia in the freezers.
WCS’s location in the Northern Shenandoah Valley is an asset, convenient to Interstates 81 and 66, as well as the Virginia Inland Port (VIP), an intermodal facility in Warren County that plays a major role in the cold chain in the area. Food products come in from The Port of Virginia’s Hampton Roads facilities, then are transported to the VIP, where they can be quickly moved to value-added processors in the I-81 corridor, then quickly out to market.
ENSURING FOOD SAFETY
Perhaps the single biggest impetus for cold storage construction in Virginia and elsewhere dates back almost 15 years. The Food Safety Modernization Act (FSMA), signed into law in 2011, shifted focus across the industry from responding to foodborne illness to preventing it.
That was a serious shot in the arm to the cold storage industry. Suddenly, perishables that used to be stored on unrefrigerated docks now had to be stored in chilled facilities that ensured specific temperatures, including eggs, soft cheeses, various vegetables, fish, and shellfish. The law also established requirements for information sharing between carriers and facilities and requires companies to maintain records on food shipments for two years.
Another unlikely growth catalyst was the COVID-19 pandemic. Because of the nature of the business,
WCS Logistics, Frederick County
WCS Logistics, Frederick County
InterChange Group, Rockingham County
InterChange was viewed by the federal government as an “essential” business during the pandemic and could continue operating when other companies could not. “We had to help keep the grocery shelves full,” said Anders.
While pharmaceutical products were not covered under the FSMA, the industry is highly regulated. The U.S. Food and Drug Administration requires pharmaceutical companies to demonstrate that their products are stored and transported under appropriate conditions. Proper temperature control across the pharmaceutical supply chain is particularly crucial for vaccine efficacy.
Anders estimated that it costs roughly three times more to build and operate a cold storage facility than dry storage. That’s one reason why so many hedge funds have jumped onto the bandwagon. The demand for cold storage has been driven by things like growth in online grocery shopping, food company consolidation, and the growing need for temperaturecontrolled storage for pharmaceuticals. Hedge funds are particularly lured by the cold storage industry’s stability and its unique resilience during economic cycles and downturns.
PRIMED FOR GROWTH
Nationally, Anders said, the cold storage industry is projected to enjoy an annual growth rate of 15% to 18%, and if that holds true, it could be a positive sign for growth in Virginia.
Because it costs so much to enter the cold
storage industry, competition is limited as well. Even then, the very existence of smaller players like InterChange is what makes the cold chain industry in Virginia so fascinating.
InterChange was founded in 1993, when its founders turned an old factory in Augusta County into a warehouse. Anders came aboard in 1997, when the company built another warehouse in Rockingham County. By 2000, they had 10 employees and five dry storage warehouses, and the company has since opened a sixth warehouse in Warren County.
Then came the move into cold storage. The company had started out in the field when it converted one warehouse to cold storage back in 2003, after a customer specifically requested it.
Since then, it has learned that it’s usually more economical to build new cold storage facilities from the ground up. Between 2019 and 2022, InterChange built a state-of-the-art cold storage facility with more than 430,000 square feet of storage space.
At this point, InterChange has nearly 1 million square feet of temperaturecontrolled space across Virginia. The potential payoff is the big driver.
“The barrier to entry is higher due to the capital costs,” Anders said. “In general, it’s risk-reward. Your risk is higher, so your reward will be higher.”
“At a lot of cold storage operations, the pickers and packers and such can only be in those environments for 20 or 30 minutes at a time before they need to
step out to warm up,” said Joe Dunlap, chief supply chain executive for real estate company Legacy Investing. “Automating more of that space will also benefit those employees working in somewhat harsh environments.”
EXPANDING OPPORTUNITIES
That potential reward has enticed Anders to continue expanding into cold storage. InterChange has invested more than $100 million into cold storage expansions in the last seven years.
And there’s more to come. The company is planning yet another $35 million cold storage expansion in Rockingham County that will help serve the needs of the region’s major food and beverage businesses. The next phase will add more than 150,000 square feet to its largest facility, bringing the final capacity to more than 600,000 square feet.
WCS, meanwhile, views itself as occupying the proper space within the Virginia cold storage ecosystem, having opened two new cold storage facilities in the past six years and bringing nearly 150,000 square feet of storage online. Yates called the company “big enough, but small enough” — big enough to provide the same services as bigger companies, but small enough to provide the customer a direct connection to the company’s managers.
While cold storage specialists like InterChange and WCS might appear to be blips on the overall cold storage screen, they represent the essence of why many companies turn to Virginia as a key link in the global cold chain.
INSIDE VIRGINIA’S
The Port of Virginia’s investments have made it a key destination for shippers to bring their products to the United States through the East Coast. The port was ranked as the highestperforming in North America in 2021.
Careful planning at The Port of Virginia and other key properties has the Commonwealth poised for development
In a global economy increasingly reliant on seamless supply chains, warehousing has become a critical pillar of commerce. Dry warehousing, used to store non-perishable goods like furniture, electronics, and clothing, underpins everything from e-commerce to manufacturing. The COVID-19 pandemic accelerated this shift. Disruptions to global shipping, spikes in online shopping, and a renewed focus on supply chain resiliency prompted businesses to rethink their logistics strategies, fueling unprecedented demand for storage and distribution facilities.
The global warehousing market is surging, projected to reach $1.73 trillion by 2030, up from $1 trillion in 2023, according to Grand View Research. This growth reflects not just changing consumer habits, but a fundamental transformation of how commodities are moved and stored.
This evolution is especially apparent in Virginia. With its strategic Mid-Atlantic location, deep water ports, expanding highway and rail networks, and a business-friendly environment, the Commonwealth is fast becoming a warehousing and logistics powerhouse. Now, Virginia is constructing the ultimate logistics apparatus, complete with automated warehouses, efficient on-ramps and off-ramps like ports and interstates, and a growing ecosystem of companies looking to ship smarter and faster.
PORT-POWERED DEVELOPMENT
Much of Virginia’s warehouse surge can be traced back to The Port of Virginia’s aggressive infrastructure investments and unique operating model. The port’s $1.4 billion Gateway Investment Program includes terminal upgrades, the deepening and widening of its channel to accommodate two-way traffic for ultra-large container vessels, and major road improvements such as the Hampton Roads Bridge-Tunnel expansion. These improvements have positioned the port as one of the most modern and efficient on the East Coast.
“That gives developers the opportunity to invest with confidence about the investments that they’re making,” said Russell Young, vice president of Port Centric Logistics at the port.
Unlike traditional landlord-operated ports, The Port of Virginia owns and operates its terminals. That allows for faster, more strategic decisionmaking and a high degree of customer responsiveness. This model has become a powerful draw for companies outside the Commonwealth, particularly in sectors like e-commerce, food and beverage, auto parts, and consumer goods.
West Coast firms are increasingly diversifying their supply chains to the East Coast to better serve markets east of the Mississippi, Young said. On top of that, companies in the Northeast are
consolidating operations by establishing centralized facilities in Virginia to efficiently distribute across the Mid-Atlantic, Northeast, and South.
As companies reassess their logistics strategies in response to shifting trade dynamics and rising operational costs, Virginia’s streamlined, port-owned model offers control and adaptability that set it apart from landlord-operated alternatives. Cross-dock facilities and large warehouses, ranging from 100,000 to 1 million square feet, are in high demand. Beyond port infrastructure, businesses value Virginia’s direct rail connectivity to Midwest manufacturing hubs.
REIMAGINING WAREHOUSES
Virginia’s strategic positioning as a shipping hub isn’t the only factor driving the warehouse sector’s growth.
Legacy Investing, an Arlington Countybased real estate firm, is pioneering a new model of industrial real estate development, bundling automation capital directly into leases. Inspired by the data center industry, this model allows tenants to lease both space and automation equipment under a single payment structure, a model they describe as “warehouse as a service.”
This approach addresses a critical challenge for many companies: the high upfront cost of automation. By writing off the initial costs of structural automation, like robotic picking systems, over a long lease, tenants can adopt advanced logistics technology without the typical financial burden. For high-volume industries such as directto-consumer retail, food and beverage, and life sciences, this can significantly
improve margins and scalability.
“I can give the tenant the first year rentfree until they’ve ramped up and started shipping,” said Joe Dunlap, Legacy Investing’s chief supply chain officer and founder of supply chain and real estate consultancy firm BlueJ Advisors. “Now, I can give them a payback period that’s less than a year, if not immediate.”
Virginia is a natural fit for this model. The Commonwealth boasts pad-ready sites, a deep skilled labor pool, and streamlined permitting processes, all of which shorten the development timeline for industrial projects.
The implications extend beyond business operations. Automated warehouses require fewer employees overall. But those roles — such as mechanics, technicians,
Several of Virginia’s top-notch colleges and universities offer logistics and warehousing programs, including the Center for Packaging and Unit Load Design at Virginia Tech.
Most
[automated warehouse] jobs are going to look and feel more like manufacturing jobs. They’re going to be much better and more competitive.
JOE DUNLAP Chief Supply Chain Officer, Legacy Investing
and programmers — are higher skilled and significantly better paid than typical warehouse labor. This makes automation particularly attractive for rural communities, where labor pools may be smaller but can support higher-paying positions with proper training and infrastructure.
“Most of those jobs are going to look and feel more like manufacturing jobs. They’re going to be much better and more competitive,” Dunlap said.
TAKING THE LONG VIEW
Amid the fast-paced rush to develop warehouse space, some firms are opting for a more measured, longterm approach. One example is Sauer Properties, Inc., a family-owned company based in Richmond, which is developing the Sauer Industrial Center, a
300-acre site in Henrico County adjacent to Richmond International Airport that could support up to 2.5 million square feet of industrial space.
Unlike many developers driven by shortterm returns, Sauer intends to hold its developments for 10 to 20 years or more. This long-term bet allows them to be selective with the clients they choose to work with. Sauer also has the runway to build features that could help enterprise tenants attract and retain skilled employees, including a thoughtfully designed industrial park with lush outdoor spaces and walking trails.
“I think we have an advantage in that we can be patient,” said Marshall French, the company’s director of real estate development and construction. “We don’t have to deploy capital right now just to put up buildings — we can take our time with development and find the right users.”
Richmond’s central location, affordability, and infrastructure make it an ideal inland hub for logistics and manufacturing. In addition to the port’s Hampton Roads facilities down the road in Norfolk, Richmond is home to the Richmond Marine Terminal and its barge service, along with connectivity from the nearby intersections of interstates 64, 85, and 95.
“Henrico is a great location to develop,” French said. “It’s very pro-business with robust infrastructure and a highly educated workforce that we think is going
to be attracting a lot of those high-quality tenants who fit well strategically with our vision for this development.”
Sauer’s strategy is also resilient in the face of market fluctuations. While U.S. warehouse vacancy rates have recently ticked up, compounded by tariffs and supply chain reshoring, Sauer isn’t too worried about its industrial base.
“To us, the current vacancy feels more like a normalization, though we’ll definitely keep an eye on it,” French said.
SMART GROWTH, SMARTER WAREHOUSES
Despite economic headwinds and geopolitical uncertainties, Virginia is continuing to reinvent its supply chain operations with little disruption.
The Commonwealth is wrapping up the Gateway Investment Project and is on track to complete the Hampton Roads Bridge-Tunnel expansion by early 2027. Meanwhile, Legacy Investing is scaling its warehouse-as-a-service model, a move Dunlap said is the “foundation of longterm competitiveness for companies.” And Sauer is slated to kick off Sauer Industrial Center’s initial phase of development within the next six to eight months. The project will be developed over the next five to 10 years.
Together, these efforts are positioning Virginia not just as a player in the logistics space, but as a national leader shaping the future of warehousing.
The State of American Warehousing
A Conversation With Joe Dunlap
Joe Dunlap is the founder of BlueJ Advisors, a supply chain consulting firm for owners, operators, and investors. Previously, he spent nearly a decade at CBRE, where he oversaw the company’s supply chain practice, and has decades of supply chain experience with Accenture, FORTNA, Dematic, and UPS. VEDP Vice President of Logistics Eric Jehu spoke with Dunlap about the warehousing ecosystem in Virginia and nationally, how to better incorporate supply chain issues into site selection, and the concept of warehousing as infrastructure.
Eric Jehu: This issue is about infrastructure in Virginia, and I regard warehousing as infrastructure. I’d like your reaction to that.
Joe Dunlap: Oftentimes when you see supply chains represented visually, you see this linear flow from raw materials to manufacturing to finished goods, then maybe to an origin port vessel that goes to a destination port, followed by deconsolidation or transload to a distribution center, and finally to a retail store or customer’s home, with lots of little trucking and transportation mechanisms in between. But when you look at that linear diagram and all the touch points across the broader supply chain, there’s some real estate component in every facet of the supply chain.
I look at warehousing as a buffer for production versus consumption. Warehouses sit between the manufacturing process and the demand for goods. If warehouse storage weren’t there, manufacturing processes would have to produce at a different rate to fill order quantities so vessels or trucks could get goods to their final destination on time.
I think warehouses serve a vital function in the broader supply chain to buffer manufacturing, to feed manufacturing, to offload finished goods away from production so that production is either buffered at the manufacturing site or,
more typically these days, closer to demand. We wouldn’t be able to service demand efficiently if we didn’t have warehouses in between.
Jehu: So the short answer to the question is yes.
Dunlap: Yes, America’s warehouses are vital infrastructure.
Jehu: Are we in Virginia in position in the U.S., broadly speaking? Do we have what we need to accomplish what the businesses and industries we’re trying to attract have set out, or do we have more work in front of us?
Dunlap: It’s not a static answer. The answer is probably no, considering where we are with the expected influx of investments coming back to the United States, in spite of a lot of vacancy right now. The U.S. has certainly made progress, but there are still a lot of gaps. I think I last read that since 2023, almost a billion square feet of new warehouses had come online that were delivered nationally, and about 80% of that was speculative construction.
That building boom has pushed up a lot of these warehouse vacancies at different rates in different markets. But nationally, by the end of 2024, it was almost 8%, and third-party logistics providers took up a significant portion. Every study I’ve seen, whether it’s CBRE, Cushman, or others, is showing that third-party
logistics providers, by and large for the last 10 to 12 years, took the largest proportion of warehouse leases over that period. Especially during the pandemic, more and more companies were looking for short-term quick outlets of capacity.
Jehu: Certain parts of the country have higher vacancy rates. Others have lower vacancy rates. Virginia is one of the lower ones, but we do have a lot of capacity coming online in the near term. Are we in the right position?
Dunlap: It’s another variable answer, a supply-demand equation. Currently, demand’s not as strong as it once was. Otherwise, there would be lower vacancy in those markets you’re describing. Developers often wait for clear demand signals before they commit to the buildout. So how quickly can they ramp it up? They want to wait as long as possible until there’s a contract signed so that the investment is covered quickly by a leased building.
So are we ready? Do we have sites? Can we ramp up in time? There are some other interesting dynamics probably happening relative to building size. The number of million-square-footers built out over the last five years has been tremendous relative to the previous five years. Will we see that buildout going forward? Not as often, unless there’s a tenant in tow, ready to commit to that million-square-footer. I think we’re going to see more small facilities.
Jehu: What, in your view, would be the appropriate intersection of warehousing and commercial development and policy?
Dunlap: Are you familiar with the U.S. Department of Transportation’s FLOW program and that interchange of data across the value chain, which is part of enabling that long-range master planning?
Jehu: From what I understand, the FLOW program grew out of the COVID-19 pandemic and the pullback. Then the surge of goods through the country basically choked the infrastructure.
But at the same time, if you can see the wave coming and can prepare by spreading the impact out, you have to share the information. You need open communication. Everything has to mean the same to everybody. If we say “arriving,” it has to reference the same point in time at the same locations. Assuming you have continuity of data and communications, I completely agree that it gives you the best version of a forecasting vehicle that you could possibly come up with.
Dunlap: It’s got a long way to go, but it’s a start. Having industry-specific versions of FLOW to accommodate variations in how they want to share data is probably the next evolution of FLOW.
Jehu: Your past employer is a larger firm, and many of the industries we necessarily focus on in the traded sector space, because they go beyond state borders for their revenue, tend to be larger organizations. Warehousing and trucking are two industries where the small business operator is the dominant entity. Is there a natural misalignment or a missed opportunity where our focus is on the traded sector when one key piece of the infrastructure is largely met by
independent warehousing operators?
Dunlap: One of the things that comes to mind is public policy for land use and pollution. Other regulatory impacts were largely written for large consumers — large users of industrial. Do you apply the same stringent policy to smaller mom-and-pops that run 50,000-sq.-ft. warehouses that may service larger supply chain components? Do they have to hit the same hurdles and regulatory requirements written to target big offenders? Part of me would say maybe there should be some easing of those burdens for smaller companies, such as tiered compliance systems or incentives.
[Virginia] has made some pretty aggressive investments in advance of these industries needing to build out these ecosystems… Clearly, the state is doing a lot of things right.
JOE DUNLAP Chief Supply Chain Executive, Legacy Investing
Jehu: Are there opportunities, as the life of a manufacturing project is developing, to improve on what we do today in terms of considering the necessary components of goods movement in and out of a site? To have the appropriate parties at the table at the right time, which ultimately leads not just to better site selection, but better overall employment and career paths, and the right investment in the right infrastructure?
Dunlap: The way I think about it is that it’s the natural evolution of operation.
A supply chain operation tends to be one of risk-mitigation, or risk-aversion, and ideally a crawl-walk-run approach to stage-gate CapEx investment. I don’t want to make my end-all, be-all investment in capital on Day One. I want my investment in capital to coincide with volume increases, as production increases, or distribution increases to keep my cost per unit at a predictable level.
One of the things that Legacy Investing does is take ownership of the capital investment for the equipment to help companies reduce their cost per unit and need for labor that may not offer the best wage rate in the community. Maybe they only need 200 or 300 people if I’m able to automate the building significantly. Most companies can’t afford automation themselves on Day One.
If I can incorporate fixed infrastructure automation into the building — because at that point, it’s as integral as lighting or HVAC — I can amortize that investment over a longer period, lowering the cost for that tenant. I’m able to give that tenant a year of free rent, and if they start shipping by the 12th month, guess what? They’re cash flow-positive from Day One because they’re paying the lease as they’re starting to generate revenue. I think it’s those kinds of creative solutions that Virginia is already looking at that will probably benefit bringing more automation and higher-wage positions to the state.
Jehu: And it changes in a couple of ways. One is the direct example of an automated warehouse space. Now you have maintenance technicians, electricians, and programmers who are more on the IT and systems side. And then there’s the expertise around the product being stored. That leads to QC and clean-room packaging and all those types of things.
Dunlap: These job types you described look more like wages for manufacturing
jobs. So, what was a NIMBY reaction now becomes, “Yeah, bring that to my community because you’re bringing me better wages.” It’s now an attractive operation in my backyard for people who were traditionally material handlers and forklift drivers.
Jehu: You get career mobility, you get connectivity to other industries, and then you’re essentially establishing infrastructure for the manufacturer through warehouse distribution. Are there examples of where this is being done today, or where we’re taking steps from the policy perspective?
Dunlap: Siemens and Apple have opened sites that look and feel like an automotive ecosystem in the way the suppliers are vital to those locations. The suppliers may not have been there on Day One when these sites opened, but they need support to help bring those other suppliers closer to provide just-intime replenishment on the line.
Jehu: I was looking to you for examples of where this behavior is active today.
Dunlap: I don’t think these were done like you were saying it should be done.
Jehu: But now it looks that way.
Dunlap: It looks that way in retrospect because somebody made the bet. The answer is probably no, they’re not doing what you’re describing. But in retrospect, it’s a self-fulfilling prophecy. They’ll probably work to get those suppliers located as close as possible.
Jehu: Take that industry specificity out of it for a second and look at Virginia — how Virginia stacks up from our investments in warehousing as infrastructure space, and then our industry sectors and the areas where we’re focused. If it’s not automotive and not electric vehicles, do all the same principles apply in the food
and beverage space, the pharmaceutical space, or some of those other spaces?
Dunlap: I certainly see the size of investments the state has made in the last five years, more so than the previous five years, like deepening and widening the port for ultra-large container ships. That investment is going to draw a lot more volume through the port, which will inevitably benefit the state across regions and industries.
The multimodal connectivity you have from Norfolk reaching, what is it, 75% of the U.S. population within two days? When I was at CBRE, we did a significant project with the port and the state to look at some of these recommendations. A couple of years ago, I got to see all the new development just in the past three years from before that. It was like night and day. Clearly, the state has made some pretty aggressive investments in advance of these industries needing to build out these ecosystems.
Has the state been enabling these campus-style ecosystems with the vision to make these investments? I don’t know. If they have, kudos to you, but you certainly have made investments where I think it becomes a bit easier. Was it 34 million square feet of new or expanded warehouses in Virginia just in the past few years? I think around 18,000 new jobs came as a result of that. Clearly, the state is doing a lot of things right.
Jehu: This has been great. Thanks for making the time, and hopefully we can do a 2.0.
Dunlap: It would be fun.
For the full interview, visit www.vedp.org/Podcasts
‘Reimagining the Art
of the Possible’
Exploring the possibilities of intermodal transport in Virginia
IF YOU IMAGINE timelines as train tracks and key events as moments when tracks converge, this is a pivotal time for rail in Virginia.
On July 29, the largest rail operator in the United States, Union Pacific Railroad, announced it was buying Norfolk Southern Corporation one of two freight rail operators in the Commonwealth (along with CSX Transportation) and a major operator in 22 states east of the Mississippi River.
If the U.S. Surface Transportation Board approves the purchase (after a review expected to take about two years), the deal would erase a bottleneck that forces railroad operators on either side of the Mississippi to stop and transfer cargo to another operator.
The Virginia Inland Port in Warren County opened in 1989 to help The Port of Virginia gain more business. The Virginia Port Authority recently completed $15 million in capital improvements to the facility, expanding railroad track to handle larger trains and adding container handling equipment.
Norfolk Southern Corporation recently announced a merger with Union Pacific that, if approved, will create the first transcontinental railroad under a single entity in the United States. The merger, under which Union Pacific would acquire Norfolk Southern, would remove a bottleneck at the Mississippi River that could make a potential intermodal facility in Virginia more viable.
“Today, freight moving across the country often requires interchanges between railroads, which introduce delays, increased complexity, and added cost,” a Norfolk Southern representative wrote in an email. “By creating a unified network, we would remove these friction points, resulting in faster, more predictable service.”
In a new rail network that would operate in 43 of the 48 contiguous American states, the Commonwealth is positioned to become a key node. Virginia has a skilled workforce, a central location on the East Coast, and a strong port infrastructure that includes the deepest, widest port on the East Coast.
Union Pacific CEO Jim Vena agreed, saying, “Imagine cargo arriving at The Port of Virginia — whether electronics, textiles, or agricultural goods — moving seamlessly across the country to inland markets and West Coast destinations without delay.”
The proposed deal would create
America’s first transcontinental railroad under a single entity and comes months after Virginia began studying how to boost its capacity to handle freight more efficiently in a tumultuous era. Freight rail in the U.S. hasn’t fully recovered from the hit it took during the COVID-19 pandemic. Wars in Ukraine and along the Red Sea have disrupted supply chains for American businesses that depend on trains and trucks to transport raw materials, components, and finished goods from ports, while tariffs imposed by the Trump administration have further complicated logistics planning.
“Global disruptions have prompted many companies to rethink their supply chains and bring production closer to home,” a CSX spokesperson wrote in an email. The representative added, “We’re facing a different world than what we were just a few years ago. Supply chains, policy, and consumer behavior are shifting rapidly. Virginia’s rail infrastructure — and CSX’s role within it — remains a competitive asset.”
EXPLORING THE POSSIBILITIES
One possible answer being investigated by the Commonwealth: building intermodal facilities, where shipments travel between trucks and trains in containers.
“It’s reimagining the art of the possible when it comes to freight,” said Karen Jackson, a senior fellow with the Commonwealth Center for Advanced Logistics Systems (CCALS), a Petersburg-based applied research center with partners including VEDP, the Virginia Chamber of Commerce, The Port of Virginia, the University of Virginia (UVA), Virginia Commonwealth University, Virginia State University, Longwood University, and Old Dominion University.
Jackson was hired by CCALS to build collaboration between those universities, state agencies, and industry facing logistical challenges — familiar ground for her, since she served as Virginia’s secretary of technology from 2014–2019.
CSX Transportation operates approximately 2,000 miles of track in Virginia, including the CSX A-Line Bridge over the James River in Richmond.
Her interest in intermodal was sparked by a question: What is the best way to move cargo that takes up less than a full truck? That, combined with research into intermodal sites in other countries, quickly led to follow-up questions:
◾ How is cargo now moved around, in, and out of Virginia?
◾ Are new intermodal models and/ or assets emerging to improve the efficiency of movement and reduce truck traffic, noise, and pollution?
AI and related technology enable the Commonwealth to project how it might optimize its network by growing or adapting it. So CCALS has begun a three-step investigation:
1. How does freight move now?
2. How might changes optimize movement in the future?
3. Is there enough demand among those who move freight to make new intermodal infrastructure a worthwhile investment?
To tackle the first two questions, CCALS is working with VEDP and UVA’s systems engineering program, one that has experience modeling the movement of freight at the Commonwealth’s ports.
Virginia isn’t alone in trying to adapt — other states are too. CCALS wants to help Virginia get ahead of the curve. “That becomes a competitive economic
win,” Jackson said.
TRANSCONTINENTAL POTENTIAL
She’ll find an intrigued partner in Norfolk Southern, the company said: “For Virginia, [the merger with Union Pacific] could improve the prospects for a new intermodal facility, which would serve as a strategic hub within a transcontinental system.”
Virginia has experience creating facilities that can be used by trucks, trains, and even boats. The Virginia Port Authority opened an inland port and multimodal facility in Warren County in 1989 to help compete with the Port of Baltimore, while capitalizing on road and other infrastructure
Norfolk Southern Corporation’s merger with Union Pacific could make it cheaper to move trains across the United States.
advantages along the Interstate 81 corridor. The goal: move 20,000 containers a year.
The Virginia Inland Port (VIP) succeeded — its annual volume doubled its goal and drew new business. But the path to success was initially bumpy. In its first month of operation, the inland port moved just 16 containers.
That rocky start serves as a lesson for intermodal’s backers in Virginia — first make sure you have sufficient demand, and in both directions. That’s the perspective of Devon Anders, president of InterChange Group, whose warehouses include one in Front Royal that provides 48,000 square feet of dry, refrigerated, and frozen storage.
“It’s not a ‘Build it and they will come’ type of a thing,” he said. “You need to go in and secure some significant amounts of business.”
The VIP works well for big players that move so much freight they can negotiate deals with Norfolk Southern that produce savings comparable to using trucks alone.
But for an importer with lower volumes, the math doesn’t always add up.
Increasing activity at The Port of Virginia’s Norfolk facilities is great for Hampton Roads, but benefits don’t always extend very deep into Virginia. Consider the federal investment to build the Heartland Rail Corridor between Norfolk and Chicago in 2009. Doing so cut transit time from three days to two. But the first stop after Norfolk is Columbus, Ohio.
“That’s a very active line for The Port of Virginia, but those containers completely bypass Virginia,” Anders said.
Location is also a focus for John Larkin, a longtime transportation logistics analyst who now serves as a strategic advisor on transportation and logistics at Clarendon Capital. He said the VIP had a cap on growth as an intermodal location because it’s too close to the intermodal yard in Norfolk.
“You can’t generate intermodal efficiencies over 200 miles. There’s always a trucker who will do it for less,” he said.
Larkin added that the Union PacificNorfolk Southern deal could be a gamechanger, reshaping how freight is moved nationally in ways that could make a new intermodal facility in Virginia more viable.
Until now, railroads were only willing to build intermodal for long-haul, heavyuse lanes.
‘REIMAGINING
“The poster child for long-haul, highdensity lanes is Chicago to Los Angeles,” Larkin said. “Something like 90% of intermodal traffic flows in the 10 biggest intermodal lanes.”
Intermodal yards are expensive to operate, he said, so railroads build them only when savings over long-haul trucking outstrip those costs.
CAPITALIZING ON EFFICIENCIES
If Union Pacific acquires Norfolk Southern, the balance sheet for intermodal could change by making it cheaper to move trains across the continent. Eliminating the bottleneck near the Mississippi River could cause an increase in transcontinental train freight.
“The trick, in my book, is less to focus on freight originating in Newport News and more on freight originating in Los Angeles or Seattle or Chicago, inbound to Virginia, which could be moved intermodally and then distributed locally by truck,” Larkin said.
New intermodal development makes the most sense near Interstate 95 and close to major cities and distribution centers, he said. The strongest location would be near Washington, D.C.; other strong possibilities would be close to Richmond or Roanoke.
The current rail network mostly moves finished goods made overseas from ports in double-stacked trains. The proposed merger and onshore manufacturing could reshape that network and make short hauls more viable.
“Instead of just transporting finished goods over long distances, you could be transporting raw materials, semifinished materials, finished materials, components, subassemblies, and finished products — all within the U.S.,” Larkin said.
Innovative Partnerships
AND LAND USE AT LANGLEY
NASA research facility looks to use its capabilities to advance drone research
NASA Langley Research Center, Hampton
When President Donald Trump announced in June he would “unleash drone dominance,” it’s no surprise that the Commonwealth looked to NASA and its 108-year-old Langley Research Center in Hampton for guidance.
Drone technology has advanced quickly, but the rules and technology to use drones safely in crowded airspace have not. Enter Langley.
“We want to offer our capabilities, our expertise,” said Kevin Rivers, Langley’s associate center director, Technical.
“Advanced Air Mobility could revolutionize how we do business in the Commonwealth.”
BOOSTS FOR AVIATION, MANUFACTURING
NASA Langley has already forged partnerships with:
◾ Firefighters, to use drones to suppress wildfires when darkness or smoke make manned flight impossible
◾ First responders, to target relief and rescue operations during and after natural disasters
◾ Manassas-based aerospace company Electra, to test aircraft that use one-tenth the space to
land and take off as conventional planes, with a hybrid electric engine that reduces noise and emissions. Electra has more than 2,200 preorders for its nine-passenger model and flew a smaller model in 2024 at NASA Langley.
◾ The United Network for Organ Sharing in Richmond, to use drones to speed organ delivery, increasing transplant success rates
“If we can shorten transit time to get an organ to the hospital, then we can increase the opportunity for someone to use that organ,” Rivers said.
NASA Langley is developing technology that enables drones to detect one another and avoid collisions, which has been tested at NASA Wallops Flight Facility in Accomack County on the Eastern Shore. An advanced air corridor between Langley and Wallops might be in the future, boosting economic development in Hampton Roads and beyond.
Wallops is home to the Mid-Atlantic Regional Spaceport, a commercial facility to launch into low-Earth orbit craft designed to manufacture things in a microgravity
environment, which could lead to a competitive edge over terrestrial-bound manufacturers. Langley has expertise in how best to land spacecraft.
“It could be medicines. It could be electronics,” Rivers said. “There are so many things that could be manufactured in a low-microgravity environment that would be a huge advantage.”
An air corridor moving people and products between Langley and Wallops would be a boon to Hampton Roads. “That would be a game-changer,” said Doug Smith, chair and CEO of the Hampton Roads Alliance.
ALIGNING POTENTIAL PARTNERS
NASA Langley is partnering with Joint Base Langley-Eustis — they share a fence line — to offer their site for companies seeking to test drones and flight control systems in an urban environment — all without the need for Federal Aviation Administration approval because the Langley facilities can certify on their own.
To operate drones safely and effectively, engineers need to understand the atmosphere where they fly — another area of focus at Langley, where wind tunnels and experts in fluid dynamics test the varied conditions encountered by drones and advanced aircraft.
When it comes to designing navigation and air space control, NASA Langley has world-class mathematicians and a proven legacy of success. It was there that a team that included three Black women did the math that enabled John Glenn to become the first American to orbit the Earth — a story shared in the 2016 Best Picture nominee Hidden Figures
Just as complicated as the math: the new drone rules proposed by the FAA. The first public draft, published in August, clocked in at 173 pages.
“We have a different perspective from regulators and commercial entities that are trying to bring those systems to market. We can be an effective, honest broker,” Rivers said.
The effort to attract business is aided by another accomplished neighbor — the Thomas Jefferson National Accelerator Facility (Jefferson Lab), a nuclear physics research facility with the U.S. Department of Energy.
While people associate NASA with space exploration, one-third of Langley research is on advanced aviation, including measuring ways a supersonic jet built by Lockheed Martin, the X-59, muffles sonic booms. It was sonic booms that prevented the Concorde from flying over land, a limitation that made it a money-loser. The X-59 is designed to overcome that constraint while flying 925 mph, 40% faster than the speed of sound, and halving flight time between Washington and Los Angeles.
A HISTORY OF BREAKTHROUGHS
The trailblazing work at NASA Langley is a source of pride in its hometown of Hampton, which has a network of bridges and roads named in tribute to NASA astronauts, said Mike Yaskowsky, the city’s interim deputy director of economic development.
Langley doesn’t just provide a storied history — it’s integral to building a prosperous region and state. Hampton has partnered for years with NASA, offering grants to local companies seeking to commercialize the agency’s technology.
In recent months, collaboration has expanded, with NASA Langley drawing leaders from VEDP and the Hampton Roads Alliance to tour a research center that houses 200 facilities across 764 acres, employing 3,400 civil servants and contractors.
“With advances in air mobility, in my lifetime, I may be traveling in a vehicle without wheels, and NASA Langley will likely play a major role in making that a reality,” Yaskowsky said.
NASA Langley is one of Hampton Roads’ prized jewels, along with the Jefferson Lab, numerous colleges and universities, and 17 military bases. It could become an innovation corridor that draws companies to the region.
NASA Langley Research Center, Hampton
“Just as the Massachusetts Institute of Technology attracts top talent and entrepreneurs to Boston, NASA Langley is a vital part of our aerospace ecosystem, fueling companies and investment in Hampton Roads — an opportunity that can be further leveraged,” Yaskowsky said.
‘THE FUTURE OF AVIATION’
That air mobility work is underway, said Smith, who was especially impressed with NASA’s Air Traffic Operations Lab, where pilots navigate virtual drones through New York and Los Angeles. “We think air mobility is a very strong play for Virginia,” Smith said. “This is the future of aviation.”
NASA Langley has laid groundwork for collaboration, he explained, creating a strategic partnership office that engages leaders in industry, academia, and government, and preparing a Space Act Agreement that will enable NASA staff to work with key players in the private and public sectors.
One beneficiary could be Newport News/Williamsburg International Airport, which is so close to Norfolk and Richmond that it struggles to attract conventional aviation. Newport News City Council has committed $4 million to help the airport shift from conventional aircraft to innovation, logistics, and advanced mobility. A turnaround could attract business to 350 acres of adjacent land that is primed for development. The Hampton Roads Air Study last year projected that by 2045, Advanced Air Mobility could generate $16 billion in new business and create 17,000 jobs.
“We are fortunate to have NASA Langley virtually next door to the airport,” Smith said. “Clearly, they can play an important role in shaping the future of aviation at this amazing asset.”
NASA is conducting research into Advanced Air Mobility to facilitate low-altitude passenger transport, cargo delivery, and public service capabilities, including this air taxi testing at Langley Research Center in Hampton.
The Future of
Regional Air Travel in Virginia
Innovative flight technologies could connect major hubs with underserved areas
Virginia’s transportation network faces congestion issues that come with population growth, and air travel is no exception. A report from the Virginia Innovation Partnership Corporation found that while the Commonwealth has 66 public-use airports, only nine serve commercial airlines, leaving many smaller communities disconnected from regular passenger flights. These constraints slow economic activity and restrict mobility.
Advanced Air Mobility (AAM) could help close the gap. This emerging sector includes electric and hybrid aircraft, drones, and other platforms designed for short trips, small landing areas, and flexible service. By connecting major hubs with underserved areas, AAM could ease traffic congestion, bypass flood-prone roads, increase access to remote areas, and more fully employ Virginia’s underused airports. The Commonwealth’s geographic diversity, infrastructure, and proximity to federal decision-makers put it in a strong position to lead in this next era of mobility.
VIRGINIA’S PLAN FOR THE SKIES
Scott Denny, Virginia’s Advanced Air Mobility manager at the Virginia Department of Aviation, said the state is
moving quickly to address transportation challenges through innovation.
The Virginia AAM Strategic Plan outlines how to safely integrate new aviation technologies into the National Airspace System while driving economic growth. The plan is community-led, bringing together local governments, regional partnerships, and private businesses to identify infrastructure needs and test solutions, with the state providing funding, expertise, and coordination.
“It is our road map on how businesses looking to come in and operate in the Commonwealth can do so,” Denny said.
Two major pilot projects are now underway. The Stafford-WarrentonWinchester Project uses small drones for package delivery and first responder support. These drones could deliver Narcan during an overdose or a defibrillator to a cardiac arrest victim, cutting response times. The project will collect operational data, test safety protocols, and build a cost-per-mile model for multiuser services.
“By the end of this project, we hope to demonstrate — first and foremost — that drones can operate safely, whether delivering packages or performing similar tasks, and that they can do so in and around existing airports,” Denny said.
The second project, a collaboration with Virginia Tech’s Mid-Atlantic Aviation Partnership, focuses on electric or hybrid “air taxis” like the Joby Aviation aircraft and the Electra EL-2 Goldfinch, which can carry four to five passengers. These aircraft could one day connect remote communities across congested corridors, offering a faster, cleaner alternative to driving.
Virginia has invested $1 million in these initiatives through a one-time allocation from the General Assembly. Both aim
to deliver a minimum viable product within 18 months, creating proof-ofconcept models to attract operators and investors. Denny noted that Virginia’s proximity to Washington, D.C., its strong defense and aerospace presence in Hampton Roads, and its mix of urban and rural environments provide ideal conditions for testing and scaling AAM technologies. These projects also support the Federal Aviation Administration’s (FAA) push to regulate “beyond visual line of sight” drone operations, a milestone that could unlock widespread commercial drone delivery.
You’re opening up air travel to underserved communities.
SCOTT DENNY
Advanced Air Mobility Manager, Virginia Department of Aviation
By opening new travel markets through the Commonwealth’s airports, AAM could relieve pressure on clogged roadways, expand access for rural communities, and reduce last-mile shipping costs. “You’re opening up air travel to underserved communities,” Denny said.
A CAUTIOUS APPROACH
While AAM promises solutions to many of Virginia’s transportation problems, not all stakeholders are ready to commit.
The Metropolitan Washington Airports Authority (MWAA), which operates Washington Dulles International Airport and Ronald Reagan Washington National Airport, is taking a measured approach. It is monitoring developments in three categories: small electric vertical takeoff and landing (eVTOL) aircraft with 100-mile ranges, larger electric or hybrid aircraft for up to 50 passengers, and next-generation supersonic planes for long-haul travel.
“We’re in the infant stages,” MWAA CEO Jack Potter said, adding that the technology is “something businesses, airports, and the state needs to be planning for.”
The hesitation stems from regulatory uncertainty and unclear demand. The FAA has yet to finalize operational and safety guidelines for AAM, and infrastructure needs remain undefined. Questions range from where to place vertiports in dense urban areas, to how to meet electrical demands for charging, to ensuring safe integration with existing air traffic. Space constraints are another factor. Dulles has room to expand, but Reagan’s tight footprint and restricted airspace present unique challenges.
“Every airport would have to be looked at separately to know what flexibility exists,” Potter said.
Even so, Potter acknowledged that AAM could unlock “huge opportunities.”
Linking smaller airports directly to Reagan, Dulles (see page 15), Richmond International Airport, and Norfolk International Airport could bypass highway congestion and reduce travel times for business and leisure travelers.
The authority is ensuring its long-term plans remain flexible, making room for future AAM infrastructure while learning from early adopters elsewhere.
INNOVATIVE TECHNOLOGIES
Some of Virginia’s most promising transportation solutions might come from just above the waterline.
That’s where REGENT Craft Inc. is betting big. The Rhode Islandbased startup is developing all-electric Seagliders, technically known as wing-in-ground vessels. These “flying boats” are designed to connect coastal communities faster, cleaner, and cheaper than today’s options.
“We really do see this reduction in both travel time and ticket price, which are usually mutually exclusive,” said
REGENT Vice President of Government Relations and Defense Tom Huntley.
Seagliders operate in three modes — float, foil, and fly — and spend most of their journey cruising about 30 feet above the water, using what’s known as ground effect. This aerodynamic zone reduces drag, allowing high-speed travel while avoiding gridlock and crowded flight paths. Groundeffect travel allows Seagliders to cover nearly 200 miles on a single charge with today’s battery technology.
Safety is reinforced with a tripleredundant control system, and operators can navigate using standard boat controls, easing the transition from traditional maritime operations. Because they operate over water, they are regulated as maritime vessels by the U.S. Coast Guard and the International Maritime Organization.
Huntley says REGENT is in the “very early stages” of deciding where to scale domestic manufacturing. While its first production facility is underway in Rhode Island, the company is exploring opportunities in Virginia — a move that would capitalize on the Commonwealth’s strengths in manufacturing and shipbuilding and could create jobs in maritime operations, maintenance, and repair.
On Virginia’s expansive coastline along the Atlantic Ocean and Chesapeake Bay, Seagliders could bypass traffic chokepoints, shorten commutes, and improve access to jobs and health care for communities often isolated by geography or flooding. The Commonwealth’s strong defense presence could also make it an early market for the technology. “It fills an unmet need in the transportation and
Electric vertical takeoff and landing aircraft (eVTOL), like this craft shown at the 2025 World AI Conference in Shanghai, is a technology with potential to reduce travel times and connect remote communities with transit options.
defense markets,” Huntley said.
THE NEXT WAVE OF MOBILITY
While Virginia’s public authorities navigate regulatory complexities, momentum is building. The Commonwealth’s pilot projects and partnerships are laying the groundwork for adoption when the regulatory environment matures.
In an era when transportation bottlenecks hinder economic growth, emergency response, and quality of life, AAM offers a compelling vision for Virginia’s future. Whether through drones delivering urgent medical supplies, air taxis bypassing traffic on Interstate 95, or Seagliders linking flood-prone coastal towns, the Commonwealth is preparing to adapt and help shape the next wave of mobility.
Virginia state programs help vets use their experience to land logistics, infrastructure jobs
Sam Northington doesn’t want any military veteran to struggle like his dad did. After 20 years in the U.S. Air Force, his father retired as a master sergeant and went back to college to get his teaching credentials.
“That didn’t really fit him. He never really taught,” Northington recalled. “From there, he went on to be a mechanic and then ended up selling furniture off a rental truck.”
Northington is the Virginia Infrastructure Academy coordinator for the Virginia Community College System (VCCS), charged with creating and aligning certificate training programs to match the state’s community and business needs. Part of his job is charting pathways for veterans like his father, who are looking for their second act after leaving service.
“I wish there had been someone to let my dad know there were multiple career opportunities available to him,” Northington said. “That probably would have provided him with better opportunities than he had.”
A READY-MADE WORKFORCE
Virginia has the second-largest population of veterans in the country,
with nearly one out of every 10 residents a former service member. The state’s community colleges and veteran job training programs are working in concert with industry to offer veterans numerous options for retraining, within months or even weeks, to well-paying civilian trades and careers in the infrastructure and logistics industries and beyond.
“Our programs allow veterans to get short-term training for long-term careers, so when they’re about to transition out, they can enter a field of their choosing very, very quickly,” Northington said.
It helps that former service members tend to have the qualities employers desire. “One of the most common requests I get from employers is, ‘Can you send me somebody who’s going to show up every day on time, try their best, and do a good job?’” Northington said. “Well, the military is used to doing that. There’s no need to worry about that.”
Veterans can take several paths toward higher education and preparing for careers at any of Virginia’s 23 community colleges. One common path is an associate’s degree, which can lead to a job or serve as a stepping stone to a bachelor’s degree.
1 10 OUT OF EVERY
Virginia
residents is
a
former service member
Vets can also pursue a noncredit workforce credential through the FastForward program, which pays for up to two-thirds the cost of select credentialing programs at local community colleges. VCCS trains for more than 600 industry-related credentials, and about 170 meet the FastForward criteria, said VCCS Associate Vice Chancellor of Career Education and Workforce Programs Randall Stamper. Those criteria include:
◾ The credential is directly aligned with a specific occupation or occupational cluster that the labor market data shows is going to grow
◾ There’s been reasonable growth in that occupation over time
◾ Businesses in the region are willing to provide letters of support, attesting that the credentialing program at a local college represents the skills they want to hire for
Source: Virginia Department of Veterans Services Source: Virginia Community College System
“We only fund those credentials that are reasonably going to get you into an entry-level job, or maybe a slightly advanced job, in an industry that you can then build a career out of,” Stamper said.
The programs generally range in length from six to 10 weeks. Careers covered by FastForward logistics offerings include commercial truck driving, remote pilot operation, site management, and numerous careers related to road maintenance, like flagging and paving.
Collectively, FastForward enrolled 15,753 program participants last year, a 17% increase from 2023 and the most since the program’s inception, according to a recent report from the State Council of Higher Education for Virginia. Median annual wages for participants increased $10,551, or 50%, in the 12 months following program completion, the report stated.
Median annual wages for FastForward participants increased in the 12 months following program completion
$10,551
These students are older than average, with a median age of 34, and most have dependents, Stamper said. They’re also more likely than average community college students to be receiving Supplemental Nutrition Assistance Program or other public benefits.
“They’re adults, they’ve had kids, and they want to stop working two or three low-wage jobs and find a way into a career,” he added.
HELPING MILITARY FAMILIES
Joe Sanders works directly with these students as an instructor and the assistant coordinator of the Manufacturing and Logistics programs at two Richmondarea community colleges, Brightpoint and J. Sargeant Reynolds, through the colleges’ shared workforce development division, the Community College Workforce Alliance (CCWA). The vast majority of program enrollees on both campuses attend for free with the help of state grants, he said.
Sanders, a veteran himself, sees his job as helping the whole family — at all stages of military and post-military life. “We love our active military and veterans, but we also do not want to forget about the dependents who are looking for opportunities as well,” he said.
One of the most common requests I get from employers is, “Can you send me somebody who’s going to show up every day on time, try their best, and do a good job?” Well, the military is used to doing that.
SAM NORTHINGTON Virginia Infrastructure Academy Coordinator, Virginia Community College System
CCWA aims to make course offerings fit the population — whether that’s scheduling 5:30 a.m. classes online so active service members can attend before they start their day, launching military cohorts in logistics programming, or informing the military population that credentialing programs are available regardless of rank or status.
“Some of those people have been out for six months. Some have been out for five years,” Sanders said. “For us, it’s no different. They’re out. They’re looking for an opportunity. How can we help?”
Vets can see how their military experience translates into college credits or credit toward a certification through a portal called Credits2Careers. The portal also shows potential college credits for FastForward certifications, if a vet had pursued that route before going for a degree.
“One of the things we hear all the time is the military and industry, they’re speaking different languages,” said Emily Jones-Green, coordinator for the Credit for Prior Learning program at the state’s community colleges.
CREDIT FOR EXPERIENCE
The portal helps to bridge that gap, said Jones-Green. “The students are able to say, ‘This is what my military career was, and this is how I would be able to put this in a civilian industry language,’” she said. Conversely, if someone from the civilian business world were talking to a veteran, “They could say, ‘You were an E-5. I know what an E-5 is now. Let’s talk about how that would be relevant to this industry and what your path to promotion would be within our organization.’”
As an example, Jones-Green dropped the military resume of her brother, a U.S. Coast Guard veteran, into the portal. Within seconds, a list of colleges and applicable credits appeared, showing that the applicant would already have credits toward programs and degrees as diverse as an infrastructure certification, a program at Tidewater Community College in power motor tools and repair, and 21 credits toward an associate’s degree in applied science and information technology. For those vets who want to go into a field not directly related to their military experience, she said, a technical studies degree often allows for maximum usage of credit for prior learning.
The Credits2Careers initiative allows veterans “to shorten their amount of time in the classroom and then get into the labor market and the workforce a lot quicker,” she said.
The hope is that it encourages Virginians as well as folks originally from other states to make a home in Virginia after their military service ends.
“Some will come out of the military and want to go right into education,” Sanders said. “Some will come out and want to go to work. Some will come out and want to try taking night classes and still work. We want to make sure we give them as many opportunities as we can.”
Wherever a vet is from, whatever he or she hopes to do post-military, the state of Virginia wants to meet them where they are — and hopes they will remain in the Commonwealth.
“If they’re not from here, and we’re able to tell them, ‘Hey, we can give you this credit and help you get your degree,’ they might be more likely to stay here and be part of the Commonwealth and contribute back to the area,” said Jones-Green.
The Virginia Community College System provides logistics training for veterans and non-veterans alike, with Paul D. Camp (left), Tidewater, and Virginia Peninsula (below) community colleges serving the veteran-heavy Hampton Roads region.
Alchemco expands its concrete waterproofing customer base with VEDP International Trade assistance
While most waterproofing products do their job entirely on the outside of a surface, Alchemco, Inc.’s products work from the inside out. The company has used VEDP’s International Trade services to pursue a similar inside-out path for its growth.
VEDP’s trade services help businesses identify potential new markets, develop market entry strategies, and locate strategic partners. Those services were a natural fit for a company aiming to put a proven product in front of new audiences.
Henrico County-based Alchemco manufactures enzyme-based waterproofing products for concrete construction. Their proprietary technology was developed by chemist Curt Nelson in the 1970s and stands out in a field of primarily oil-based, exteriorfocused sealants.
A LIVING SEALANT
Alchemco’s waterproofing technology is based on a bio-catalyst that seeps into concrete and remains active. The product forms a durable membrane that protects the structure from cracks and contamination — and when cracks do form, the catalyst reacts by adapting to reinforce the affected areas, ensuring the protective membrane stays intact.
The company’s products are used in myriad applications — bridges, parking structures, water parks, and water treatment plants, among others — and are designed to protect a structure for its entire life cycle. They are made of nontoxic ingredients and certified to be free of volatile organic chemicals.
FROM THE INSIDE OUT
“Once they’ve seen it work, people run with it,” said Sascha Sainer, vice president of global sales. “Contractors love it because they generally make more money with less labor. It’s faster and less problematic.”
In addition to contractors and developers, Alchemco also has a strong consumer base in government infrastructure projects. Transportation departments in countries and states are attracted to the longevity the company’s products provide.
“We’re able to extend the service life of a piece of infrastructure,” said CEO and President Mario Baggio. “All the infrastructure projects are the main assets a state or a country has.”
HELP IN SCALING UP
Baggio bought the intellectual property for the company from Nelson in 2018
and initially handled the international work himself. By 2020, he was investigating several territories for international sales, including Brazil and other South American countries. But for all his enthusiasm, Baggio didn’t have the capacity or experience to effectively manage the intricacies of operating in new markets.
Alchemco first engaged VEDP’s trade services to help find reliable partners in foreign markets. VEDP’s trade programs provide direct support to Virginia companies committed to increasing their international export sales as a corporate growth strategy. Its established network of international service providers helped Alchemco navigate numerous hurdles in establishing its export program, which included getting a foot in the door.
“If I’m cold-calling an international client who has no idea where we
are, it’s completely different from a local company calling them in their shared language,” Baggio said. “It’s a completely different approach because VEDP immediately gives credibility
that I don’t have in a particular market. Even if you’re a small, growing business here, not a billion-dollar company, we have credibility as if we were a billiondollar company.”
‘STRONGER, SMARTER, MORE COMPETITIVE’
That credibility extends to more official channels as well, with VEDP partners helping companies like Alchemco with required certifications and other regulatory compliance issues, which can vary significantly between countries. VEDP helped Alchemco identify those requirements early in the export process, providing guidance and vetting international partners to help them remain in compliance. As Baggio put it, the company has become “stronger, smarter, and more competitive” in the markets it enters.
VEDP also provided grant support for Alchemco to participate in global trade shows, elevating its brand visibility while keeping its costs affordable. Those kinds of events are often where foot enters door in an international sales strategy. For a company like Alchemco, the goal is to get that first project and showcase what its products are capable of.
“To start in a territory is extremely challenging,” Baggio said. “Every client is going to ask what projects you’ve done there, and say, ‘After you build a project, you call me.’ It’s a chicken-egg situation. But in every continent where we work, we’ve been at least doubling our sales year after year.”
Baggio estimates that Alchemco’s revenue is eight times what it was four years ago, and that they have been roughly doubling in size every year. International sales are a huge part of that increase as the company has expanded into key markets, including Kenya and the Philippines.
“We are growing exponentially fast at the moment, not just in the United States, but around the world,” Sainer said. “It’s a multiplier of hundreds of percent. It’s way faster than we thought it would be internationally.”
Alchemco, Inc., Henrico County
A CENTER OF COMMERCE FOR 4 CENTURIES
Commercially established in 1607 and home to nearly 2 million residents across 15 localities, life in Hampton Roads ranges from the vibrant city neighborhoods of Norfolk to the sunny oceanfront of Virginia Beach to the rich history of Williamsburg, Jamestown, and Yorktown. The region has a strong military presence, with 15 military bases providing a steady stream of well-trained potential workers. Hampton Roads has a rich arts culture including the renowned Chrysler Museum of Art in Norfolk and the Museum of Contemporary Art in Virginia Beach, which has presented exhibitions from luminaries including Maya Lin and Kara Walker in recent years.
HAMPTON ROADS
hampton roads offers:
Housing costs 3% less than the national average
Historical sites including the original Jamestown colony, numerous American Revolution battlefields, and Colonial Williamsburg
Abundant outdoor recreation opportunities with 3,000 miles of shoreline, 100 miles of dedicated street and nature paths, and the southern terminus of the Virginia Capital Trail
Including the shores of the Atlantic Ocean and the Chesapeake Bay, Virginia Beach has more than 35 miles of coastline, the world’s longest stretch of pleasure beaches according to the Guinness Book of World Records.
The 35,000-object collection
was
by
at the Chrysler Museum of Art in Norfolk
described
John Russell of The New York Times as “one any museum in the world would kill for.”
Colonial Williamsburg is the world’s largest living history museum, designed to represent life in the area in the 18th century.
ReAlta Life Sciences, Inc., in Norfolk was founded by scientists from The Eastern Virginia Medical School and Children’s Hospital of The King’s Daughters. The company is focused on harnessing the power of the immune system to address life-threatening diseases.
Hampton Roads is home to 33 colleges, universities, and trade schools to train and prepare a strong regional workforce. The region is home to three community colleges: Virginia Peninsula (pictured), Tidewater, and Paul D. Camp.
Norfolk State University is a historically Black university with alumni including actor J.B. Smoove (“Saturday Night Live,” “Curb Your Enthusiasm”), Basketball Hall of Famer Bob Dandridge, and Evelyn Fields, the first woman to head the National Oceanic and Atmospheric Administration’s Commissioned Officer Corps.
Founded in 1693, the College of William & Mary in Williamsburg is the second-oldest institution of higher learning in the United States and the ninth-oldest in the English-speaking world.
Old Dominion University in Norfolk offers 175 undergraduate and graduate degree programs, including concentrations in aerospace, marine sciences, and in other fields with particular prominence in the region.
Military installations in Hampton Roads represent all branches of the U.S. armed forces. Approximately 15,000 active duty personnel transition out of the military each year in the region.
aircraft carriers for the U.S. Navy.
Newport News Shipbuilding is Virginia’s largest industrial employer and the sole designer, builder, and refueler of
Economic Development Partners in Virginia
VEDP works in close partnership with local and regional economic development organizations. For a full list of local and regional partners, visit www.vedp.org/Regions
In addition, VEDP regularly works with a wide network of statewide partners, including:
State Leadership Partners
Governor
General Assembly
Major Employment and Investment (MEI) Commission
Secretary of Commerce and Trade
Secretary of Finance
Secretary of Education
Secretary of Labor
Secretary of Transportation
Project Delivery Partners Policy and Programmatic Partners
Colleges and universities across the Commonwealth (e.g., UVA, Virginia Tech, William & Mary)
CSX, Norfolk Southern, and short-line railroads
Dominion, AEP, and other electric utilities
The Port of Virginia
Virginia Community College System
Virginia Department of Agriculture and Consumer Services
Virginia Department of Environmental Quality
Virginia Department of Housing and Community Development
Virginia Department of Rail and Public Transit
Virginia Department of Small Business and Supplier Diversity
Virginia Department of Taxation
Virginia Department of Transportation
Virginia Innovation Partnership Corporation
Virginia Tobacco Region Revitalization Commission
Virginia Tourism Corporation
GO Virginia
State Council of Higher Education for Virginia
Virginia Agribusiness Council
Virginia Association of Counties
Virginia Business Council
Virginia Business Higher Education Council
Virginia Cable Telecommunications Association, Virginia Manufacturers Association, Virginia Maritime Association, Virginia Realtors Association, and many other trade associations
Virginia Chamber of Commerce, as well as many local and regional chambers of commerce
Virginia Economic Developers Association
Virginia Farm Bureau
Virginia Municipal League
Virginia Association of Planning District Commissions
