Feud stalls decision on port

N.Y., N.J. argument may help Baltimore land shipping firms

Shipping

April 08, 1999|By Robert Little | Robert Little,SUN STAFF

A dispute between the governors of New York and New Jersey has stalled the search by two major shipping companies for a new East Coast cargo hub, and could buoy chances that the companies will move to the port of Baltimore.

Maersk Inc. and Sea-Land Service Inc., two of the world's largest shipping lines, are awaiting a final proposal from the Port Authority of New York and New Jersey before deciding whether to stay in Elizabeth, N.J., or build a large new marine terminal in Baltimore.

But officials in the New York-New Jersey port don't have a final offer to give the companies, because the two governors can't agree on the details.

New Jersey Gov. Christine Todd Whitman is eager to keep the shipping lines in New Jersey, and is supporting a multimillion-dollar package of tax incentives, grants and low-interest financing, according to a spokesman.

"Governor Whitman has shown no reluctance in her support of incentives to keep the companies in New Jersey," said Gene Herman, a spokesman for Whitman.

But New York Gov. George E. Pataki is reportedly unwilling to underwrite an expensive project that will benefit New Jersey more than New York.

The dispute has rekindled a long-running spat within the New York-area port authority, which manages marine terminals as well as the region's airports, tunnels, bridges and the World Trade Center in Manhattan. New York officials have long complained that profitable operations in New York are propping up losses in New Jersey.

The port authority reported $167 million in net income last year, while its marine terminals lost $29.8 million.

According to reports in several New York-area newspapers, Pataki won't sign an offer to Maersk and Sea-Land until Whitman agrees to restructure the bi-state port authority so that New York gets a larger share of its proceeds. And while Whitman has agreed to discuss restructuring the port authority, she wants the Maersk/Sea-Land deal finished first.

Labor leaders in New York and New Jersey warned the governors in a letter this week that their dispute is boosting Baltimore's chances of luring Maersk and Sea-Land away.

"Time has run out," read the letter, signed by representatives of the port's major employers and labor groups. "To fail to successfully conclude an agreement with these two major steamship carriers and regional employers would be irresponsible and unthinkable."

A spokesman for Pataki would not comment last night.

To reduce the time their ships spend at sea, Maersk and Sea-Land want to consolidate cargo at one East Coast port. Baltimore has long been considered an unlikely spot for such a mega-port, because it is 10 hours from the open ocean and because most cargo shipped to the East Coast is headed for New York, but officials with Maersk and Sea-Land continue to call Baltimore an attractive option.

Maryland officials have offered to build a 330-acre facility at the Dundalk Marine Terminal, and to lease it at rates lower than other cities'.

Baltimore's shipping channels are deeper, and the bay pilots and longshoremen have offered discounts that could offset the higher costs of shipping cargo out of the city by truck or rail.

Still, Maersk and Sea-Land executives make little secret that northern New Jersey is a preferable location for a consolidated cargo terminal, because more than half their cargo originates from, or is destined for, the New York market. If the Port Authority of New York and New Jersey offers lease rates and labor concessions even close to Baltimore's offer, most industry observers expect the shipping lines to stay in New Jersey.

An offer from the New York-area port officials in September was rejected by the shipping lines as too costly, but several sources expect the final offer to more closely match what the companies have asked for. Until Whitman and Pataki agree on the proposal, however, it cannot be offered at the negotiating table.

Sea-Land officials said two months ago that they won't wait indefinitely for officials in New York to make an offer, but their final decision has been delayed repeatedly since then. They say a decision is expected by the end of this month.

"I think that they have what they need from us," said James White, executive director of the Maryland Port Administration, which manages the state's public marine terminals. "What they need is that offer from New York, and then we can see where we stack up."

Pub Date: 4/08/99

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