Break-bulk cargo is focus of MPA plan Port strategy to fight rise in competition for container market

Carving niche for Baltimore

Big consumer market, good transportation are area's strengths

The port

July 07, 1996|By Suzanne Wooton | Suzanne Wooton,SUN STAFF

During the late 1980s, Maryland port officials embarked on a plan to capture a greater share of the booming container market. Warehouses at Dundalk Marine Terminal were razed to create more space for the huge steel boxes. A $300 million state-of-the-art, all-container facility, named Seagirt, was built next to Dundalk.

Less than a decade later, vast changes in the shipping industry have created fierce competition among East Coast ports, making the container business more and more elusive. The huge cranes at Seagirt are idle most of the time. And more warehouses -- not open space for containers -- are needed once again at Dundalk.

Against the gloomy, yet widely accepted forecast that Baltimore is destined to become an also-ran in the race for containers, port officials have produced a new strategic plan to turn the port into a big winner -- albeit in a more narrowly defined game.

While the five-year strategic plan might not be a panacea for the struggling port, it is indeed a reality check that puts it on a feasible course.

"It recognizes that the landscape is very intense and they're coming out No. 2," said Leo Donovan, a vice president of Booz Allen & Hamilton Inc., an international management and consultant firm based in McLean, Va.

"On the one hand, it's trying to put a silver lining around a dark cloud," he said. "On the other hand, it's a recognition that you cannot compete in this overheated general-container market against states and properties like New York and Hampton Roads that are both well-funded and well-positioned."

After focusing 80 percent of their time on containers, Maryland Port Administration officials plan, for the first time, to pay equal attention to attracting break-bulk cargo, like steel, forest products and automobiles. In addition, they will selectively target containerized cargo rather than seeking everything.

"Baltimore's not positioned to be a hub center for containers," said Maurice C. Byan, president of the Steamship Trade Association, which represents more than three dozen employers. What we do need are facilities like pier-side transit sheds and cold storage facilities."

The strategic plan, released publicly last week, calls for more dockside warehouses and sheds and for completing Berth 4 at Seagirt Marine Terminal so it can be used, not as originally envisioned for containers, but for cargo such as heavy construction equipment that rolls on and off ships.

While the plan seeks to carve out a niche for Baltimore as a break-bulk port, it also recommends multimillion-dollar expenditures to keep pace with the larger container ports on the East Coast. Among other things, it wants to ensure that the state's 126 miles of shipping channels are dredged. And it calls for raising railroad tunnels so that larger containers arriving on ships can be double stacked on trains bound for the Midwest and other areas.

BTC "The capital plan has to be absolutely consistent with this strategic plan," said MPA Executive Director Tay Yoshitani, emphasizing the need for state funding.

According to the report, the port of New York plans to spend $200 million over the next five years, while Hampton Roads, Va., Baltimore's chief competitor port, has earmarked $300 million for improvements in facilities and infrastructure during the same period.

During the late '80s and early '90s, Baltimore lost cargo to Hampton Roads, in part because the deregulation of rail rates offset Baltimore's historic advantage of being able to offer cheaper inland transportation rates. While Baltimore has since regained some of the cargo it lost, it still lags behind the Norfolk-area ports.

And, in recent years, another phenomenon in the shipping industry has put Baltimore at a severe disadvantage. Steamship lines have been forming alliances and vessel-sharing agreements, placing their cargo on larger ships that stop at fewer ports around the globe.

"The reality is we're not going to have as many ships," Yoshitani said.

Adding to Baltimore's disadvantage is the fact that these increasingly larger ships must make the time-consuming and expensive journey up the Chesapeake Bay and navigate the relatively shallow and narrow Chesapeake & Delaware Canal.

"We have certain factors that are not working in our favor, and we have to recognize that," said Yoshitani. "You have to play the cards you're dealt.

"Not everyone is Los Angeles," he said, referring to the nation's second largest and cargo-rich port, where he served as deputy director before coming to Baltimore last summer.

"We must leverage our strengths," he said.

Yoshitani said that to compete against ports such as Philadelphia and Hampton Roads for break-bulk cargo, Baltimore must capitalize on its natural advantage: its location in the nation's fourth largest consumer market, where there is a strong demand for consumer products, such as automobiles, building materials and fruits and vegetables.

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