Baltimore port bid is among finalists New York, Halifax also remain in running for cargo terminal

December 11, 1998|By Robert Little | Robert Little,SUN STAFF

Two of the world's dominant shipping lines tapped the port of Baltimore as a finalist yesterday in their search for a place to build one of the largest cargo terminals in the country.

Maersk Inc. and Sea-Land Service Inc. also will consider New York and Halifax, Nova Scotia, as sites for a new base of operations.

If placed in Baltimore, the terminal could triple the amount of container cargo shipped through the port and add a corresponding boost to Maryland's economy. State officials refused to discuss the deal's cost, expected to run well into the millions of tax dollars.

Maryland Port Administration officials were thrilled yesterday, not only because of the potential impact on Baltimore's shipping trade, but because Norfolk, Va., the city's maritime nemesis, was eliminated from the companies' consideration.

Some hailed yesterday's news as nothing less than a potential rebirth of Baltimore's container shipping trade -- a deal that could turn a struggling, secondary port back into one of the East Coast's major shipping hubs.

"In my 50 years around the waterfront, I think this might be the most exciting thing that has come to the port of Baltimore," said former Rep. Helen Delich Bentley, now a maritime consultant. "This will really be a tremendous boost to the whole state of Maryland, if we can swing it."

The two companies had planned to pick a site for their operation early next year, but said yesterday that they might spread their business among the three finalists.

Tommy Thomsen, president of Maersk Inc., said a decision to come to Baltimore could hinge on whether the companies can negotiate favorable labor rates with the area's longshoremen and pilots. "A significant outstanding issue will be discussions with labor," he said.

But, he added, "We were positively surprised and pleased with the approach of the Maryland Port Administration, and we look to Baltimore as a serious alternative to New York."

Won't be cheap

Port administration officials refused to discuss the deal in detail because negotiations are continuing. But officials make little secret that a Maersk/Sea-Land terminal won't come cheap -- that Baltimore would have to promise millions of dollars in improvements to the city's piers and waterways to win the business.

Before his departure last summer, Tay Yoshitani, the port administration's executive director, estimated the cost at $200 million, but said this week that the offer has likely changed several times since then.

James White, the acting executive director, would not say how much the proposed improvements would cost, but was quick to defend them. "You're talking about really, significantly growing the port, and the impact of that will be felt all over the state," he said.

'Big bucks'

Bentley, who has been involved in most negotiations with the companies, described the deal's price tag only as "big bucks." "If we can spend the kind of money we spent on a football stadium, by God we can spend it on this," she said.

The two shipping lines have asked for a terminal leased and dedicated entirely to them, and the port administration has offered space at the Dundalk Marine Terminal. The facility would need to be expanded and the draft at its piers dredged about eight feet to a 50-foot depth.

The companies also have asked for as many as 16 modern gantry cranes, which typically cost $1.5 million or more apiece. The Dundalk terminal is outdated by most modern standards, and would likely have to be renovated to allow more automation and more efficient container-moving capacity.

The facility, which would likely be leased for as many as 25 years, would need the annual capacity to move as many as 750,000 cargo containers -- the truck-size boxes used to transport most finished goods. All of Baltimore's current

container lines ship less than 300,000 containers a year.

The trend in Baltimore's container cargo business has been for old shipping lines to leave the city, not for new ones to arrive. That point surfaced even as the Maersk/Sea-Land announcement was made, with word that China Ocean Shipping Company, one of the port's largest customers, is moving its Far East service out of Baltimore to Norfolk early next year.

$40,000 detour

A trip up the Chesapeake Bay to Baltimore can cost a ship $40,000 or more in pilot's fees, fuel costs and lost time, a geographic imperative that has driven much of the city's cargo down the bay to Norfolk and its surrounding cities, known collectively as Hampton Roads. Maersk, a division of Denmark's A. P. Moller Group, left Baltimore for Hampton Roads two years ago, calling the port too inconvenient and expensive.

Some analysts say Baltimore's geography is such that only a sizable incentive package from the government could make the trip worthwhile for the two shipping lines.

"Will you make any money on this deal? I don't know," said Kevin Horn, a consultant for Louis Berger International, a Northern Virginia maritime consulting firm. "But Baltimore is hungry -- and so they're cheap."

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