Hale Intermodal Transport Co. announced yesterday that it would spend $8 million for four barges to be built at Bethlehem Steel Corp.'s Sparrows Point shipyard -- the first new vessels to be made there since 1988.
Although the company could have saved money by ordering the barges from cheaper shipyards in Mississippi or Louisiana, it wanted to give Bethlehem's Baltimore County complex a boost, said Hale Intermodal Chairman Edwin F. Hale.
"They were good enough to hire some of us right out of high school to allow us to make tuition payments," he said. "I didn't forget."
Mr. Hale had worked at Bethlehem's Sparrows Point steel mill for $4 an hour in the mid-1960s.
Each barge will take 80 workers about five months to build, said David Watson, president of Bethlehem Steel's BethShip operation. He said the work would be handled by the yard's existing 800-plus employees, who have worked for the past six years repairing ships rather than building new ones.
Mr. Watson said the company has received inquiries from other companies about building new ships since word of the pending deal with Hale began spreading through the maritime industry.
The deal comes after talks that involved Maryland state officials and congressional representatives as well as the two companies. Maryland's Department of Economic and Employment Development helped to seal the contract by giving Bethlehem about $100,000 to fund a training program, allowing the company to cut its price.
Even so, Hale Intermodal is paying $600,000 to $800,000 more for the barges than it would have if they were built by Southern shipbuilders, Mr. Hale said.
But Mr. Hale believes his company will get better workmanship from the Beth Steel yard.
He said the barges can help attract shipping to the Port of Baltimore that might otherwise call at Norfolk, Va., or other nearby ports. Because a barge can transport 450 containers of cargo at once, he said, it's often easier and cheaper for large shippers to move cargo by water.
"It's tough to get 450 trucks up I-95 in five hours," said Mr. Hale, whose company is in both the barge and trucking businesses. "It's $100 a box cheaper" to ship by barge as well, he said.
But the barges will not necessarily operate only at the port of Baltimore or even within the Chesapeake Bay. Mr. Hale said the ships will be placed in the company's East Coast service, which serves ports up and down the East Coast and that they will meet specifications that allow them to travel anywhere in the world.
Officials at this morning's event hailed the contract.
"To hear there is going to be new construction is simply amazing to me, and in many ways a bellwether for the port of Baltimore," DEED Secretary Mark L. Wasserman said.
But Rep. Helen Delich Bentley, the outgoing Republican from Maryland's 2nd District, pointed out that the jubilation over the deal shows how hard recent years have been for shipbuilding in Maryland.
Ten or 15 years ago, she said, "a contract to build barges wouldn't have attracted one sentence in the newspaper. Now it is extremely important."
The Beth Steel shipyard shrank for years after World War II, pressed by the mostly foreign competition that forced the company to close its other Baltimore shipyard on Key Highway. The Sparrows Point yard, which once built the world's largest commercial cargo ships, diversified into tunnel construction and ship repair work to survive.
In 1989, the Sparrows Point yard suffered through a four-month strike by shipbuilders who said at the time they were making less money than they made in the 1970s after years of wage concessions to stay competitive. The top-paid workers were earning $10.91 an hour.
Nonetheless, in July 1993, Mr. Watson said the yard had lost 52 of 53 recent competitive bids.
The main reason: Labor costs at Sparrows Point are "higher than that of any of our ship repair competitors -- in some cases by more than $4 per hour," Mr. Watson said.