Winter expenses hit VPA’s bottom line

Virginia Port Authority lost $1 million in January, but is in the black for fiscal year.    The Virginia Port Authority posted its first operating loss – about $1 million – in six months.
   The result is an improvement over the $4.7 million loss in January 2014, one month before John Reinhart took the reins as chief executive officer, and represents the lowest January operating loss in four years. 
   One of Reinhart’s mandates from state officials is to make the Port of Virginia profitable after years of operating in the red. He and his team have made considerable progress, posting six consecutive months of positive operating income prior to January.
   The financial downturn stands in contrast to the growth in traffic. Container volumes grew 14.8 percent to 191,996 TEUs in January at the Port of Virginia versus the same month in 2014 (167,272 TEUs). Virginia has seen tremendous growth in container volume during the past three years, which contributed to heavy congestion that port officials are now correcting for. In January 2013, the port handled 158,766 TEUs.
   VPA said Friday its budget forecast called for losses in January and February as a result of expected seasonal headwinds and ongoing investments to improve service levels. “By no means do we believe this is acceptable. It shows that our budget is realistic and has integrity,” Reinhart said in a statement.
   The financial results were impacted by increased overtime to clear congestion created by closure of facilities for the holidays, labor taxes and assessments due at the start of the calendar year, extra expenses for winter operations and planning, volume discounts for some carrier contracts and expenses to handle higher rail volumes, the port authority said.
   Port facilities were closed for 36 hours last week because of a major snowstorm.
   VPA said February may be in the red, as well, because of the shorter number of days, lost workdays to snow, and the negative effect of exceptionally cold weather on operations.
   The port is showing a $5.2 million operating profit for the first seven months of the fiscal year, versus a prior year operating loss of $15.3 million.
   Read more about Reinhart’s progress improving service and financial performance in American Shipper‘s January magazine feature, “On the Mend.“