Port among 5 competing for container hub Ship giants Maersk, Sea-Land seek base for Eastern operations

Finalists picked next week

Deal could triple container cargo going through port

Shipping

November 26, 1998|By Robert Little | Robert Little,SUN STAFF

Two of the world's largest steamship lines are close to selecting finalists in their search for a new East Coast base of operations, a deal that could nearly triple the amount of container cargo shipped through the port of Baltimore.

Sea-Land Service Inc. and Maersk Inc., two steamship lines that operate a joint cargo shipping network around the world, will select an East Coast hub by the end of the year, and are expected to announce finalists early next week, a Maersk spokesman said yesterday.

Baltimore is one of five cities seeking the Maersk/ Sea-Land business, along with Halifax, Nova Scotia, Quonset Point, R.I., New York and Norfolk, Va.

Maersk and Sea-Land currently use the port of New York and New Jersey as their primary East Coast base, but their 25-year lease there will expire in 2000. The two companies move about 550,000 cargo containers through the East Coast, nearly twice the number handled by the entire port of Baltimore.

"This is a big deal -- the opportunity of a generation," said Jim Dwyer, deputy planning director for the Maryland Port Administration, which operates the state's container cargo terminals.

Industry watchers have speculated privately that Maersk and Sea-Land are conducting the search simply to extract a better contract from the Port Authority of New York, but there are signs that the alliance has outgrown New York harbor.

Maersk showcased its next-generation container vessel Regina Maersk on a tour of American ports last summer, and the vessel had to unload cargo in Halifax so it could fit through New York's 40-foot-deep channels. Both Maersk and Sea-Land are adding container ships to their fleets that draw as much as 50 feet of water, and New York harbor's channels are already down to bedrock in some places.

Baltimore's southern channels -- those connecting the port to the mouth of the Chesapeake Bay -- are dredged to 50-foot depths.

The two companies have provided little information about the search, though Maersk and Sea-Land have requested a cargo terminal that would be dedicated entirely to their business and operated by them.

For any of the cities that would likely mean large capital investments in cranes, piers and dredging.

Baltimore has proposed leasing the companies space at the Dundalk Marine Terminal, which would require some renovations as well as the purchase of more "post-Panamax" gantry cranes -- with enough reach to handle ships too big for the Panama Canal.

Baltimore has been considered a long shot for increased container-cargo business for many years, mainly because rival Norfolk is closer to the open ocean and more convenient for ships that want to move quickly.

Viewed in Baltimore's favor, however, is that Sea-Land is a subsidiary of CSX Transportation, and Norfolk's rail system is owned entirely by CSX rival Norfolk Southern Corp.

Still, the prospect of a container-cargo windfall the likes of the Maersk/Sea-Land operation rarely has occurred to the Maryland Port Administration, which operates the city's container terminals.

While the administration has not ignored container cargo, its strategic plan emphasizes noncontainerized cargo like automobiles and paper products as the more likely candidates for growth.

Pub Date: 11/26/98

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