Maersk lease boosts Port Ship line signs 10-year lease at harbor terminal.

November 06, 1991|By Liz Atwood | Liz Atwood,Evening Sun Staff

The Port of Baltimore has won the latest round in its struggle for mid-Atlantic shipping business, but Virginia officials say the contest is far from over.

Baltimore scored yesterday with the signing by Maersk Inc. of a 10-year lease at the Dundalk Marine Terminal.

Although the Maersk agreement does not immediately represent new business, the contract-signing means a psychological boost to the Maryland port, which has watched its business erode over the years.

"We've been doing a lot of hard work, and it's paying off," Gov. William Donald Schaefer said at the lease-signing yesterday.

Service by the Danish container ship line currently is split between two ports, with its Middle East and eastbound shipping lines traveling through Baltimore and its westbound cargo going through Virginia. Both ports have lobbied hard to get all of Maersk's business, and yesterday neither side appeared willing to concede the fight.

Maryland Port Director Adrian Teel said the state will give Maersk a discount on any cargo service it transfers from Virginia to Baltimore.

Virginia officials countered by saying they would be willing to offer the line its own terminal, as Baltimore has done. In addition, they point out, Virginia's location provides quicker and easier access to the ocean and European ports.

For now, however, Maersk said it is happy with the present arrangement. Jorgen Engell, executive vice president of Maersk, said its position in Virginia improves its shipping schedule while the Baltimore location provides an attractive market for its customers.

Under the agreement, the Maryland Port Administration will lease Maersk and its stevedoring company, Universal Maritime Services Corp., 70 acres at the Dundalk Marine Terminal. Universal will operate the terminal for Maersk and other lines. Plans call for an automated truck processing entrance and scales.

Teel said the state has agreed to pay up to $650,000, or about half the cost of capital improvements to the facility. The MPA gave Maersk "one of its best" rates for services, he added. Maersk has committed to a minimum of 100 direct calls to Baltimore annually.

Maersk currently handles about 500,000 tons of cargo, and about one in seven of the containers that travel through state terminals. It is by far

the largest carrier in the port.

Virginia officials sought to downplay the lease signing, noting that Maersk's decision to stay in Baltimore did not mean additional business at the port.

"I feel pretty confident that they will stay at both ports," said Joseph Dorto, general manager of Virginia International Terminals, which operates state-owned docks in Hampton Roads. "Baltimore had it all and we got half of it."

Maryland port officials said they were especially pleased by the length of Maersk's commitment, the longest lease to be signed at the port. Usually lines sign three-year contracts, but Dorto noted that it is becoming increasingly customary to sign longer leases in order to justify rate discounts.

Beginning in the mid-1980s, a number of lines left the port and moved to Virginia. Other lines went out of business. Cargo volumes plummeted and the port's debt mounted.

"Definitely it's a shot in the arm" for the port, said Maurice Byan, president of the Steamship Trade Association. "It accentuates that Baltimore is a viable port."

The good news follows a number of signs that the Baltimore port may be regaining its vitality. With a new director at its head, the port won back one of the major lines -- OOCL -- which had moved to Virginia. Baltic Shipping Co., one of the largest shipping companies in the Soviet Union, announced resumption of service to Baltimore, and Atlantic Container Line renewed its lease at the port.

Rep. Helen D. Bentley, R-2nd, said the port must be careful not to grow complacent. "Basically that is what got us into trouble in the first place."

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