Hapag-Lloyd AG, one of the biggest steamship lines in the port, has decided to stop sending its ships to Baltimore.
Hapag-Lloyd, which is ranked among the top five lines in Baltimore in terms of tonnage, revealed two weeks ago that it was considering dropping Baltimore from its schedule. The Virginia Port Authority, which will get much of the business Baltimore loses, confirmed yesterday that Hapag-Lloyd was leaving Baltimore.
Maryland Transportation Secretary O. James Lighthizer said that while he regretted the loss of the ships, he still believes the port's prospects are good. "One decision by one line is not indicative of a trend. I'm interested in the long-term trend, not what one steamship line does," he said.
While the loss is disappointing, he said, "It's not a catastrophe."
The extent of the economic loss to the port of Baltimore is hard to assess, because Hapag-Lloyd will continue to provide direct service from Baltimore with the space it charters on Atlantic Container Line vessels, which will continue to call at Baltimore.
The question now is how much of Hapag-Lloyd's cargo will continue to move through Baltimore on the ACL ships and how much will shift to Hampton Roads, Va., and New York. In addition to dropping Baltimore, Hapag-Lloyd is also eliminating Philadelphia from its ship schedule.
Norfolk, Va., one of the three Hampton Roads ports under the control of the VPA, will probably gain the most from the revised ship schedule. Instead of getting one Hapag-Lloyd ship a week, Norfolk will now get two. In its announcement, the VPA said it expects to handle an additional 45,000 to 50,000 tons of cargo a year. That represents less than 15 percent of the approximately 350,000 tons a year Hapag-Lloyd handles annually in Baltimore.
Richard N. Knapp, assistant general manager of Virginia International Terminals Inc., a subsidiary of the VPA, said that he suspects those cargo figures are very conservative and that Norfolk will gain considerably more.
"We look at this as very good news," he said. "They're eliminating two ports. That cargo has to go someplace."
Without Philadelphia and Baltimore on the Hapag-Lloyd schedule, vessels coming from Europe will make Norfolk their first stop after New York. Since New York has traditionally been a high-cost port, lines tend to unload cargo bound for inland markets in this second port. For vessels headed back to Europe, Norfolk will be the last port of call before New York.
For similar reasons, Norfolk should pick up substantial amounts of export traffic.
Compared with New York, "we're the low-cost port," Mr. Knapp said, and he expects that Hapag-Lloyd's Midwestern cargo will tend to gravitate to Hampton Roads.
Maurice C. Byan, president of the Steamship Trade Association of Baltimore Inc., a group of port employers, said that while Baltimore hasmade substantial gains in improving its costs compared with Hampton Roads, the port of Baltimore's location near the head of the Chesapeake Bay remains a serious jTC problem, because of the importance lines place in cutting time from their ship schedules. Calling at Baltimore adds two days to a ship's schedule.
Hapag-Lloyd officials could not be reached for comment.