Cargo Business Newswire

Friday, February 14, 2014

New Virginia Port Authority director tackles budget

Virginia Port Authority executive director John Reinhart, former chief executive at Maersk Line Limited, decided to address the struggling finances of the port during his first week on the job.

Although the port projected a small profit this year, their figures were off, drawing criticism from new Transportation Secretary Aubrey Layne.

The port's operations have been in the red for five consecutive years, though the loss has been somewhat mitigated by an annual subsidy — a bit over 4 percent of the state's Transportation Trust Fund is allocated to the ports.

In the first six months of the fiscal year, "there's been a $10.5 million operations loss across the board … and you can't make it up on (higher cargo) volume," Reinhart told a group of maritime officials at the Virginia Maritime Association breakfast. "We're losing money on some of the cargo" moving through the port, he added.

VPA board chair Jeff Wassmer has said one of the problems includes big increases in rail traffic, which has increased overtime payments for the workers who deal with the associated cargo traffic jams.

The port's budget has been extended in many other ways. The agency's board of commissioners committed $4 million annually to finance the expansion of Route 460, which runs from Hampton Roads to Petersburg. They also paid for two recent port-related consultant studies, and the one focused on the VPA's operational arm, Virginia International Terminals, cost more than $1 million.

Reinhart named a couple areas in which the port can save money. He noted three large container ships are scheduled to call on Hampton Roads one after another after another, and getting the resulting glut of containers out of the port and toward their final destinations will be expensive. The ships ideally "should have been spread out over 2 months," he said.

He also said the Craney Island terminal, a project that when completed will dramatically increase the port's cargo capacity, should be pushed "a little bit to the right" on the timeline, noting a cheaper and quicker way to expand port capacity is to build out the state-operated APM Terminal facility in Portsmouth.

For more of the Daily Press story: dailypress.com