The Port of Baltimore's competitors on the East Coast may fight for cargo bound for the Middle East despite an agreement between Gov. William Donald Schaefer and the Kuwaiti ambassador specifying that goods bound for Kuwait will be transported through Baltimore when possible.
Under the "memorandum of understanding," to be signed in Annapolis today by Schaefer and Ambassador Shaikh Saud Nasir Sabah, U.S. companies shipping cargo to Kuwait will be told by Kuwaiti officials to route goods through the port or Baltimore-Washington International Airport "whenever it is economically feasible."
No other state has such an arrangement with Kuwait, administration officials said. Officials predict that the "memorandum of understanding" will give Maryland an edge in the trade that will result from rebuilding Kuwait in the wake of the Persian Gulf war.
Although the agreement does not require companies to ship through Baltimore, Curt Matthews, spokesman for the Department of Economic and Employment Development, predicted that many would do so in order to please Kuwait.
Officials at the ports of Hampton Roads, Va., Philadelphia and New York-New Jersey reacted with surprise when told about the agreement.
"I applaud good marketing wherever I see it," said Joe Diemer, a spokesman with the Delaware River Port Authority, a marketing agency for the Port of Philadelphia. Diemer said it is too early to tell how the agreement would affect Philadelphia.
"With all the available terminal space, I guess they should try whatever might work," Joe Menta, a spokesman for the Philadelphia Port said sarcastically.
John Hughes, a spokesman for the Port of New York-New Jersey, declined to comment on the Maryland agreement but pledged to "make every effort" to win business to Kuwait.
Dick Culbreth, a spokesman for the Virginia Port Authority, questioned whether the agreement would result in tangible business for Baltimore.
Currently, CSX/Sealand Logistics has a contract with Kuwait to arrange the shipment of emergency supplies to the country. Culbreth predicted that CSX/Sealand will favor its Sealand ships that sail from Norfolk, but do not sail directly from Baltimore.
"We have better service," Culbreth said. "The proof in the pudding is how much cargo is going to move if it costs more and takes additional time."
Rush Loving, a spokesman for CSX/Sealand Logistics, said he had not heard about the agreement Schaefer is to sign with Kuwait and could not speculate on whether it would affect CSX's contract with Kuwait. The contract, he said, is for the emergency relief program, but he said it has not been determined whether CSX/Sealand Logistics also will coordinate the shipments for the rebuilding program.
Jean AbiNader, executive director of the National U.S.-Arab Chamber of Commerce, said it is difficult to estimate how much business would move through Baltimore as a result of the understanding.
Major U.S. automobile manufacturers are expected to ship about 50,000 cars to Kuwait in the next year, and American companies are expected to receive $100 million in contracts to resupply the educational and medical needs of the country. O. James Lighthizer, state secretary of transportation, said he hopes much of the cargo would move through Baltimore.
But so far, little has happened. The Bechtel Group Inc., one of the companies frequently mentioned as a major player in the rebuilding effort, so far is coordinating most of its efforts out of its London office, according to Mike Kidder, a company spokesman.
International Business Machines, another company expected to win large contracts from Kuwait, so far has supplied only one computer, said a company spokesman. Generally, most of IBM's supplies to the Middle East come from its Europe offices, he said.