Tuesday, August 4, 2015

Vancouver USA Slashes Current Budget by 18%

By Mark Edward Nero

The Port of Vancouver USA Commission on July 28 voted unanimously to slash the port’s current-year budget by 18 percent, bringing the amount down from $98.7 million to about $80 million.
The new budget also includes a 15.3 million reduction in operating revenue and a $13.5 million reduction in operating expenditures.

The changes are in response to the failure of a new freight-hauling venture, dubbed the Dedicated Rail Service, to generate as much revenue as predicted. The service moves North Dakota agricultural products west in railcars that would have otherwise been empty when returning from dropping off eastbound shipments.

Bulk agricultural products are one of the port’s key service areas, so when the service began last fall, the port was hopeful that it could fill the gap between Washington farmers’ growing needs for product movement and the railroads’ current capabilities.

However, the service hasn’t come close to generating the revenue the port projected it would.
The port’s original 2015 budget, which commissioners approved last November, pegged rail service revenue at $18.5 million, but the revised budget figures such revenue at $3.28 million, 82 percent less than originally projected.

Additionally, the revised budget drops the rail service’s expenses to $3.16 million, down 80 percent from an initial estimate of $16.64 million. If the numbers hold up, then the program would bring the port a profit of just over $120,100 in 2015, substantially less than the just under $2 million originally projected.