Md. adds to offer for giant shippers

Glendening confers with head of CSX, owner of Sea-Land

Maritime

April 14, 1999|By Robert Little | Robert Little,SUN STAFF

Maryland officials yesterday gave the world's largest shipping alliance what is likely to be the state's final offer to lure them to the port of Baltimore. Then they moved back into a well-rehearsed mode of the negotiations: waiting.

Shipping giants Sea-Land Service Inc. and Maersk Line are considering leaving their home port in Elizabeth, N.J., and set a deadline of 5 p.m. yesterday for an offer from the Port Authority of New York and New Jersey to keep them there.

The governors of those two states continued quarreling over the matter yesterday, and no formal offer was made. But the shipping lines are evaluating a tentative offer from New Jersey Gov. Christine Todd Whitman, and expect to reach a decision within a few weeks.

"It's a competitive offer as we see it today," said James Devine, Sea-Land's director of Northeast operations. "We'll be spending the next week or more digesting this stuff and then we can move forward."

Maryland officials will not discuss the state's offer in detail, but it is known to include promises to build a 330-acre marine terminal in Dundalk for more than $200 million. Yesterday, the state offered an unspecified "sweetener" to the proposal that sources said was specifically geared toward improving Baltimore's railroad access -- considered among the city's weaknesses in competing with New York.

Also yesterday, Maryland Gov. Parris N. Glendening and other state officials met in Annapolis with John Snow, the head of Richmond, Va.-based CSX Corp. None would say what was discussed at the meeting, but Snow is a key decision-maker in the Maersk/Sea-Land negotiations.

Snow runs the East Coast's largest railroad, and has called the tracks in and out of Baltimore inadequate to handle Maersk's and Sea-Land's business. Negotiators in Maryland continue to meet with CSX officials to discuss ways the state can improve rail service to the port, including, perhaps, spending state money.

But CSX owns more than just the railroad -- it also owns Sea-Land. And while Snow has said the shipping division will select a port location independently, he could hold sway over the decision.

And so the two shipping lines say they are in the final stages of their decision-making process -- even as Maryland continues negotiations with the railroads and New York and New Jersey continue negotiations with each other.

Said Maersk spokesman Tom Boyd: "We're as anxious as anyone to get this finished and make a decision."

Maersk and Sea-Land have delayed their selection repeatedly over the past three months, mostly because the political battle in New York harbor has kept them from having any proposal to consider. Even Whitman's offer -- reportedly about $120 million in state incentives -- needs approval from her counterpart in New York, Gov. George E. Pataki.

Pataki continued his refusal to back the negotiations with Maersk and Sea-Land yesterday unless Whitman agrees to restructure the bistate authority so that New York receives more of its profits. A Pataki spokesman could not be reached yesterday.

Maersk and Sea-Land also are considering a bid from Halifax, Nova Scotia, though the Canadian port is a candidate for only a portion of the companies' business. Maersk and Sea-Land are asking for a port facility to handle as many as 750,000 cargo containers a year, volume that would triple the business through the port of Baltimore.

None of the cities making bids will discuss them in detail, but all three are offering to build the shipping lines new terminals and lease them over 25 years or more.

New York harbor has long been considered the favorite because as much as half the lines' cargo either originates from or is destined for the New York market. Placing the business in Baltimore would require a vast distribution network of trucks and rail service not in place today.

Boyd said a factor in the site selection process will be the political and regulatory climates in the three ports -- something about which they have learned much over their yearlong search.

"Baltimore and Halifax, they've been very helpful and very positive. The port authorities, the governments -- in terms of ease of doing business, there's a considerable difference between them and New York," Boyd said. "That's certainly a consideration we're taking into account."

Pub Date: 4/14/99

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