Auto terminal plan is opposed Two operators don't want the state to build a competitor

On the waterfront

March 10, 1998|By Suzanne Wooton | Suzanne Wooton,SUN STAFF

Two vehicle terminal operators at the port of Baltimore are fighting the Maryland Port Administration's plan to develop a new automobile terminal, saying the $18.6 million proposal underscores a growing concern that the state is competing with private business.

The MPA, which owns five public marine terminals, is asking the Maryland legislature to endorse a plan to construct the terminal on a site known as Masonville on the south side of the Patapsco River across from Fort McHenry.

The proposed terminal is part of the port's strategic plan to attract more diverse cargo, such as automobiles, even as it has lost container business.

The state already owns one automobile terminal, which it leases to a Toyota processor.

"We feel that we have a strategic advantage in terms of location for this kind of cargo," said Tay Yoshitani, executive director of the MPA.

The agency has reached an agreement with a U.S. company that processes cars in Mexico to lease the terminal with a guaranteed volume of business.

But Hobelmann Port Services Inc. and Premier Automotive Services Inc., which operate privately funded facilities near Masonville, say the MPA's plan would effectively subsidize another company and force them to lower their rates and wages to compete.

"It's a classic example of what the state should not do," said Tim Chadwick, chief executive officer of American Port Services, which owns Hobelmann. "There is no business, practical or employment reason to do this."

Chadwick argued that there is already too much unused automobile terminal space and that the port is not likely in the foreseeable future to need more room.

"There's no pressure from a business point of view and there won't be for years," he said. "There's a vast amount of capacity."

Since the shipping industry was deregulated in 1984, the MPA and other port authorities have provided subsidies in one form or another to lure business.

Steamship lines that carry cargo packed in steel containers are given price breaks on cranes and dockage fees.

But in recent years, with containerized cargo dwindling, the MPA has been trying more aggressively to attract to state-owned terminals cargo such as steel that is also being handled by private terminals.

"When you start to subsidize as all ports do, you can step on toes and you have to be careful about that," said M. Sigmund Shapiro, president of Samuel Shapiro & Co. Inc., a Baltimore-based freight forwarder and immediate past chairman of the Private Sector Port Committee. "I don't think it's intentional the port is trying to substitute imaginative segments of business to take the place of the cargo we're losing."

Hobelmann owns two marine terminals -- Chesapeake and Atlantic -- that handle the export and import of automobiles. It also leases space at the state-owned Dundalk Marine Terminal for car processing.

Premier handles heavy agricultural and construction equipment such as tractors and bulldozers at its 20-acre site in Fairfield.

In addition, some cars and construction equipment are processed at Dundalk.

"The reality is the port will be here for a long time and we hope the private sector and public sector will grow," Yoshitani said. "We have to find ways to co-exist."

Historically, Baltimore has been one of the largest car ports on the East Coast, third after New York and Jacksonville, Fla. In addition to the activity at Hobelmann and Premier, cars and some construction equipment move through Dundalk, and Toyotas are handled at the Fairfield terminal leased by the state.

Last year, the volume of cars increased 7 percent at the state-owned terminals, according to the MPA. At the private terminals, however, the volume declined largely because Chrysler exports were off in the face of the weakened dollar.

The first phase of the Masonville terminal -- to be constructed on a site that the state has owned for several decades -- would involve 50 acres.

A potential 80-acre second phase, which would include two berths and a new dredged channel, would cost between $100 million and $150 million, according to MPA budget documents.

The project would be funded by revenue bonds issued by the Maryland Transportation Authority.

Chadwick criticized Maryland port officials for not discussing specific plans with the companies that handle a sizable portion of the vehicles moving through the port.

"The reason they didn't come to us is they knew we'd say this is an outrageous use of taxpayer money to basically depress the business here," he said. In addition, he said the port did not seek bids to operate the terminal.

Meanwhile, in Annapolis, the chairman of the Senate capital budget subcommittee said the panel will withhold its support for the Masonville terminal until it is persuaded that further capacity is necessary and the new facility would not hurt longtime private businesses.

"You have two businesses that are doing the very same thing," said Sen. Thomas M. Middleton, a Charles County Democrat. "We need to demonstrate that this is needed and that it will have a synergistic effect."

Pub Date: 3/10/98

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