Va. Port Authority reports profit loss
The Virginia Port Authority reported this week it incurred a $560,000 loss in February — due to winter weather — and that resulted in work slow downs and work stoppages.
The authority budgeted a $288,000 operating loss for the month, but ended up closing its shore ports for four days in February. Between the closures and the slowed productivity due to cold weather, the port saw a .8 percent reduction in shipments compared to February 2014, resulting in a loss.
Joe Harris, a spokesperson for the authority, said while February is “traditionally” a low shipping volume month, it still caught the authority by surprise.
“You never want to budget for a loss, but if your budget has any integrity, you look at past trends and how cargo moves,” Harris said. “Yes, we budgeted for a loss based on our forecasts, but we had no idea we’d lose four work days to weather.”
Harris said the “back-to-back” snowstorms in February had a “significant ripple effect” for the authority’s performance. However, he said the authority should be able to bounce back.
“February was a bad month, but it’s not because we did anything … the weather just didn’t agree with us,” Harris said. “While the goal is to make money, the larger goal is to be financially solvent at the end of each year and to have the necessary mechanisms in place to sustain business at the port for many years to come.”
Harris also said the ports can only operate so fast to catch up with a backlog in shipment.
“We have a maximum operational capacity because if we start moving too fast, we might compromise the safety of our personnel,” he said.
However, in terms of the fiscal year, which started July 1 last year, the operating profit for the port is $4.6 million. In 2014, the year to date was a $16.6 million loss, which means performance improved in 2015 by $21.2 million.
Harris said the $21.2 million in improved profit performance is a significant “swing” for the port.
“We’re on the right path,” he said. “We’re going to have an off month here and there and we forecast for them, but at the end of the year, the goal is to be solvent and profitable.”
Part of the closures included a temporary halt to eastbound export rail traffic. Harris said those stoppages did not affect the Virginia Inland Port, north of Front Royal.
“The Inland Port had some lost work days due to snow, but because of the size of the Inland Port we’re able to get that up to normal operating stance pretty quickly,” he said. “At the Inland Port, you don’t have vessels waiting to get in and in terms of acreage, it’s smaller than our coastal properties.”
Harris said while he has not seen the preliminary figures for March’s performance at the port, he anticipates a large increase in shipping container volume. However, volume does not equal profit, Harris said.
“We expect March to be significant in terms of container volume, but I don’t know if it’s going to be profitable,” he said. “When you have record container volume, you have record amounts of equipment being used to service that volume and record amount of labor … we’re talking lots of overtime.”
Contact staff writer Henry Culvyhouse at 540-465-5137 ext. 184, or email@example.com