Hong Kong line may trim port volume

January 08, 1991|By John H. Gormley Jr.

Edwin F. Hale, the head of a Baltimore-based barge company, said yesterday that he expects the port of Baltimore to lose a significant amount of business late this year when a steamship line based in Hong Kong reorganizes its East Coast service.

"It's going to mean a big loss, a very large volume. That volume will be lost" to the port," Mr. Hale said.

The steamship company, Orient Overseas Container Line Ltd., announced late last month that it was ending its partnership with several other Far Eastern lines effective in December of this year and would reorganize its service by placing "much greater emphasis on intermodalism for East Coast destinations."

Although OOCL has not stated flatly that its ships will cease calling at East Coast ports, that is what Mr. Hale and others in the industry expect.

They interpret the "greater emphasis on intermodalism" to mean that OOCL will no longer send its ships through the Panama Canal to the East Coast and instead will unload its ships at a West Coast port and send the containers east by rail, a route known as a "land bridge."

OOCL's ships do not now call at Baltimore, but Baltimore does handle substantial amounts of OOCL cargo that move by Mr. Hale's barge company, Hale Container Line, between Baltimore and Hampton Roads, Va.

OOCL handles about 150,000 tons of Far Eastern cargo in Baltimore annually, the Maryland Port Administration says. A loss of 150,000 tons would be about 4 percent of the total container traffic handled at the state's public marine terminals last year.

Mr. Hale said he hoped that not all of OOCL's Far Eastern traffic would be lost to the port and his barge company, since other steamship lines that still provide all-water service between the East Coast and the Far East would try to capture it.

"Traditionally, when somebody drops the water route for land bridge, they lose market share," he said.

Although the port might retain some of the traffic, the loss would damage his company, waterfront labor and the state's taxpayers, Mr. Hale said, predicting a "very negative effect" on the port.

Ironically, Baltimore stands to lose cargo from a line that just a short time ago represented one of the port's brightest hopes for new business. Port officials were trying to interest OOCL in becoming a tenant at the state's new Seagirt Marine Terminal.

A decision by OOCL to end direct water service to East Coast ports would be in keeping with an industry trend that has cost all East Coast ports substantial amounts of cargo in recent years. Mr. O'Malley said that 60 percent to 70 percent of the cargo originating in the Far East now travels to the eastern United States by a land-bridge route.

Steamship lines generally charge their customers more for the land bridge than for all-water service. For the customers, the land bridge shortens delivery time by about a week. For the steamship line, the land bridge means fewer ships can serve the same market, since eliminating the trip through the Panama Canal to the East Coast cuts thousands of miles from each voyage.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.