Breakdowns cause bust amid port coal boom

September 14, 1991|By John H. Gormley Jr.

The main export coal terminal in the port of Baltimore is going through a boom and a bust simultaneously: Coal shipments are double last year's, but the terminal's machinery has broken down under the load, creating a backup of waiting coal ships and rail cars.

In July and August, 38 ships loaded coal for export in Baltimore, more than double the number in the port during the same two months last year. But in August, the coal-dumping machine broke down at the coal terminal operated by Consolidation Coal Sales Co. The machinery was fixed a few days later but broke down again this week.

"They're having big problems at Consol," said C. Richard Foster, vice president of John S. Connor Inc., freight forwarders and ship agents. "They're trying to run 105 percent capacity. The equipment won't do it."

The problems at Consolidation are evidenced by the big coal ships anchored near Baltimore and Annapolis and by the loaded rail cars filling rail yards and sidings.

"At the moment, there are six ships waiting and two due [by today]," said Rex Wheeler, vice president of Southern Steamship Agency and past president of the Maryland Coal Association.

He estimated that 2,500 full rail cars are waiting to dump their coal in order to meet ships scheduled to load at the Consolidation terminal. Rail yards and sidings are brimming with rail cars "from here to West Virginia," he said.

The Consolidation terminal receives coal from two railroads, CSX and Conrail. The inability of the railroads to dump the coal from their cars and send them back to the mine for more coal is creating a shortage of cars. Conrail appears to be suffering the biggest car shortage. A spokesman for the railroad said Conrail had a backlog of 2,500 cars waiting to unload at Consolidation.

That represents about 200,000 tons of coal, enough to fill almost three average coal ships.

"They don't have any empties to give the mines," said Mr. Foster, who said he knows of at least one coal shipper who has been unable to get his coal loaded as a result of the car shortage.

The problems have cast a shadow on what was becoming a banner year for the coal business in the port. Statistics provided by John S. Connor show that through the end of June, coal shipments were running far behind those of the year before. Only 61 ships had loaded export coal, compared with 83 the year before.

Tonnage was down, too, to 3.5 million from 4.5 million tons, a decline of almost one-fifth.

So great was the surge in July and August that in just those two months the situation reversed. The port recorded 99 export coal ships through August, compared with 98 a year earlier. Tonnage was 5.7 million, compared with 5.4 million for the same period in 1990.

The boomlet has continued in September. As of yesterday, the port had loaded nine ships with export coal. At that rate, the port will con-tinue the pace set in July and August of about two ships every three days, provided the problems at Consolidation can be resolved.

The problem involves the machinery that lifts two rail cars at a time and dumps their loads before setting the cars back on the tracks. That dumper went out of operation at noon Thursday.

As a result, the terminal has been unable to unload the coal onto the conveyor that takes the coal to the ship berth. Yesterday, the berth at Consolidation was empty and the huge spout that directs coal into the holds of ships hung idle above the dock. The terminal was expected to resume operation today.

The problems apparently stem from an accident in August when a rail car being dumped fell, damaging the dumper machinery. A spokesman for Consolidation said problems with the dumper and the conveyor were fixed in August. He was not aware of the current problems, and the manager of the coal terminal could not be reached for comment.

Mr. Wheeler said it will take about two weeks to clear up the backlog of ships and coal cars if the terminal goes back into operation quickly. But disputes over who will pay for costs incurred by the waiting ships will be a source of contention -- and perhaps litigation -- for some time to come, he said.

These kinds of congestion problems have been a part of the industry in previous booms, Mr. Wheeler said. The Consolidation terminal,however, has been largely free of problems throughout its history, he said.

He attributed the surge of exports through Baltimore to the diversion of coal that had been moving through a pier owned by Conrail in Philadelphia and to panic buying in Europe because of uncertainly over supplies from the Soviet Union.

Denmark had planned to buy 4 million tons from the Soviet Union, he said, but with winter approaching and serious questions about the ability of the Soviets to supply the coal, the Danes have turned to the United States.

Instead of the usual one or two shipments, the Danes have ordered eight shiploads from Baltimore this month, Mr. Wheeler said.

The port expects to handle about 3 million tons of coal a year that had been moving through Conrail's Philadelphia pier.

Because of the problems Consolidation has been having handling the surge, Conrail had been considering routing some of the coal through Philadelphia again. But after studying the issue, the railroad decided to stick with Baltimore.

"We explored the alternative of moving some through Philadelphia again. We concluded that does not appear to be the answer. We want to keep trying to work things through there," Robert T. Sullivan, a Conrail spokesman, said.

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