Cargo Business Newswire

Monday, October 20, 2014

Virginia ports’ truck congestion in September undermines profits

Despite a boost in exports at the Port of Virginia in September, truck congestion may be depleting the port's operating income.

The Virginia Port Authority, which operates terminals in Portsmouth, Newport News and Norfolk, said in September the ports handled a total of 201,113 TEUs, an 8.6 percent increase year-over-year. This is the port’s third consecutive month in which volume has exceeded 200,000 TEUs.

Although container cargo amounts continue to increase, the Virginia Port Authority only generated $102,827 in operating income last month – although it is a major improvement from this time last year, when the port authority was millions of dollars in the red.

Since July 1, the port posted a $4.3 million profit during the first three months of the first quarter of the 2015 fiscal year. That’s up from a $3.4 million loss during the same period last year – which capped six consecutive years of operating losses.

"The heavy volumes and profitability continue, but our delivery service to the motor carriers is not acceptable," said John Reinhart, Virginia Port Authority CEO and executive director. "We are pushing our capacity limits at both Virginia International Gateway (VIG) and Norfolk International Terminals (NIT). We’re already working vessels at Portsmouth Marine Terminal, and that move is designated to provide a measure of relief to VIG and NIT, but our truck gates and service time remain an immediate area of focus."

In September, truck volume increased 21 percent, with 76,782 TEUs transported by truck last month – 13,359 more TEUs than handled in September 2013.

"As a result, we’re experiencing congestion at our truck gates and increased time turn-times," Reinhart said. "This is putting a service burden on our motor carriers."

Reinhart said weekend truck gate hours have been extended to better manage peak season volume, all while incurring extra costs. He added that volume incentive priced into contracts with some cargo also caused revenues to dip in September.

For more of the Daily Press story: www.dailypress.com

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