N.J. offers aid to keep 2 ship lines

Md. will `sweeten' incentives to lure Maersk, Sea-Land

Whitman, Pataki at odds

Container-shipping giants could triple volume at Baltimore


April 13, 1999|By Robert Little | Robert Little,SUN STAFF

With one day to spare before two giant shipping lines said they would flee New York harbor for Baltimore, New Jersey Gov. Christine Todd Whitman reached into her state's budget yesterday for a package of incentives designed to persuade them to stay.

With Whitman's offer, shipping lines Maersk Inc. and Sea-Land Service Inc. said yesterday that they have entered the final evaluation process of deciding whether to move to the port of Baltimore or stay in Elizabeth, N.J.

Port officials in Baltimore, meanwhile, said they plan to "sweeten" their offer to the two shipping giants today, hoping to lure them south with further incentives. The business of Maersk and Sea-Land, two of the world's largest container shipping companies, could triple the volume through the port of Baltimore and create thousands of jobs on the city's waterfront.

"I think we've got a good proposal on the table, but we're going to sweeten the pot a little more," said James White, director of the Maryland Port Administration.

Maersk and Sea-Land had given the Port Authority of New York and New Jersey until 5 p.m. today to make an offer for a 25-year lease that would keep the two companies at Elizabeth.

Negotiations had stalled between New Jersey and New York, which share control of the bistate port authority, so Whitman offered money from her state budget to augment a port authority proposal that the shipping lines already had rejected.

Spokesmen for Whitman and the shipping lines would not say what New Jersey's offer entails, or how it compares to Baltimore's offer. But Maersk and Sea-Land officials said they were happy to at least have offers to compare before deciding where to base their East Coast operations for the next quarter-century.

"Maersk and Sea-Land are pleased by Governor Whitman's intervention," said Maersk spokesman Tom Boyd.

Pataki assent needed

Whitman's offer still could be foiled by her New York counterpart, Gov. George E. Pataki, because it is linked to a rejected proposal that the port authority made in September. The authority still must agree to allow that initial offer to be used along with funds from New Jersey.

Without a proposal from the New York/New Jersey port, Maersk and Sea-Land have said they would be forced to move ahead with negotiations to build a new container cargo hub in Baltimore.

The Maryland Port Administration has offered to build the facility at the Dundalk Marine Terminal, a project expected to cost at least $200 million.

The shipping lines are also considering a proposal from Halifax, Nova Scotia, but have said they would use the Canadian port for only a portion of their business.

Baltimore has always been considered a long shot as a home for Maersk and Sea-Land, two of the largest and most prominent shipping lines in the world. Said one port official in Baltimore: "It wouldn't make sense for New York to let two companies that big just walk away."

But the disagreement between Pataki and Whitman stirred the region's Longshoremen enough that they held a rally yesterday outside the port authority's headquarters in Manhattan's World Trade Center. Whitman attended the rally, where she announced her plans to add New Jersey's money to the offer.

Restructuring sought

At issue between Whitman and Pataki is the way the port authority's costs and profits are shared between their two states. Pataki wants the port authority restructured so that New York enjoys more of its profits -- instead of underwriting money-losing operations in New Jersey. Pataki has refused to agree to any Maersk/Sea-Land contract unless Whitman agrees to reorganize the authority.

"Historically, New York has not gotten its fair share from the port authority," said Pataki spokesman Michael McKeon.

"We can't move forward with such a massive deal without some assurance that the port authority will be restructured in a way that treats New York fairly."

Maersk and Sea-Land move 25 percent of all the container cargo shipped through New York harbor, and account for as many as 3,500 jobs.

An economic engine of that size is significant even in a large port city such as New York. In a secondary port city like Baltimore, Maersk and Sea-Land's business would be nothing short of a rebirth.

Labor concessions

Maryland officials are offering to build the 330-acre terminal complete with new cranes, office and warehouse space and dredging to accommodate the lines' larger, next-generation vessels.

Local dockworkers have offered wage and hour concessions, the pilots who guide ships up the Chesapeake Bay have offered a 20 percent discount, and state officials are negotiating with the city's two railroads for better train service.

In contrast to the intrastate dispute to the north, Maryland's political leaders have been wooing Maersk and Sea-Land for almost a year.

The General Assembly passed a bill this session to allow the Maersk and Sea-Land project to move more quickly through the state's regulatory agencies, and a resolution declaring support for the project went unopposed.

Pub Date: 4/13/99

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