With cargo down, '90 is 'year to be forgotten' for port

March 06, 1991|By John H. Gormley Jr.

Following the release of statistics yesterday showing that general cargo at the state's piers declined 11 percent last year, Baltimore port director Brendan W. O'Malley called 1990 "a year to be forgotten."

The port's poor performance was the result of a lagging national economy and "book-end strikes" -- one at the beginning of the year and one at the end -- as well as the loss of traffic from three major steamship lines, according to Mr. O'Malley, executive director of the Maryland Port Administration.

One of the three, Maersk Line, diverted some of its ships to Norfolk, Va.; a second company, Farrell Lines, ceased making direct ship calls to Baltimore; while a third line, Topgallant, went out out of business. The lost cargo from those three lines amounted to almost 500,000 tons,according to Mr. O'Malley. That represents the lion's share of the 633,000-ton decline reported yesterday by the state port agency.

The state has invested hundreds of million of dollars in recent years on terminals and facilities to handle general cargo -- such things as containers, autos, heavy equipment, machinery and boats. The terminals that handle coal, grain, ore and similar bulk commodities are generally built with private funds and operated by private companies.

The state has concentrated its investment on general cargo because it generates more benefits for the local economy. According to an economic impact study done for the port by the Martin O'Connell Associates consulting firm, a ton of container cargo produces seven times as many jobs as a ton of coal. For automobiles the figure is 16 times as many jobs per ton. Break bulk -- a category which includes such things as machinery, steel and lumber -- produces 13.7 times as many jobs per ton compared with coal.

The losses reported yesterday by the MPA came in three crucial categories in which the state has invested funds in order to generate employment and stimulate the local economy. Container traffic was down about 9 percent, falling to 4.3 million tons. Autos were off about 14 percent, to 395,000 tons, a figure that includes the state-owned but privately operated Toyota terminal. Break bulk tonnage fell by over 18 percent, to 910,000 tons.

The MPA's total in 1990 was 5.1 million tons, compared with 5.8 the year before. That represented the second straight year that the port has lost cargo. In 1989, the MPA also reported a bad year, in large part because of a prolonged dispute with longshoremen over jobs at the port's dockside rail yard that opened in the fall of 1988.

The ports of Hampton Roads, Va., the port of Baltimore's principal competitor, handled 7.2 million tons of general cargo last year, a 7.5 percent increase over 1989. Hampton Roads has been growing rapidly in recent years, with much of the growth coming at Baltimore's expense.

The figures reported yesterday by the MPA do not include general cargo handled at private terminals in the port, figures which the port agency says are not yet available. In past years, MPA terminals have accounted for almost 90 percent of the port's general cargo.

John C. Martin, of Martin O'Connell Associates in WellesleyMass., said that the port remains an important part of the state's economy. A study done by his company based on statistics for 1989 found that the port was directly responsible for 14,600 jobs and was indirectly responsible for an additional 10,100 jobs. The port generated $915.5 million in personal income, $1.9 billion in business revenue and $67 million in state and local taxes, according to his report.

He said the job statistics for 1990 have probably fallen. "One would assume, given the tonnage lost, there were some jobs lost," he said.

Mr. O'Malley said he thinks the port's worst days are past. ThSeagirt Marine Terminal, a $250 million container-handling facility that opened this fall, in combination with a year of labor peace, should produce cargo growth, he said. The movement of goods needed for the reconstruction of Kuwait also should benefit the port.

"1991 I expect to be a much improved year," he said.

The port does face one decisive battle in the coming year: the effort to keep Maersk Line in Baltimore. Maersk is by far the most important steamship line in the port, accounting for about 500,000 tons annually. The line currently divides its service between Baltimore and Hampton Roads. Baltimore averages two Maersk ships a week, while Virginia gets the third.

Burdened by the costs of operating out of two mid-Atlantic ports, Maersk is about to choose between the two ports. The loss of Maersk would be a tremendous blow to Baltimore's efforts to reverse its fortunes.

Maersk's departure would represent "a grievous loss" for the port of Baltimore, said Mr. O'Malley.

On the other hand, a decision by Maersk to drop Hampton Roads in favor of Baltimore would be a great psychological and marketing victory. Maersk is considered one of the best-run companies in the industry. Its choice of Baltimore would lend credence to the argument that Baltimore really has come to terms with its problems and arrested its decline.

A decision is expected in the next two months.

Mr. O'Malley said the MPA is using all the tools it has available to persuade Maersk that its future lies in consolidating operations in Baltimore.

"We're trotting out all our assets to make sure they know it," hsaid.

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