Proper dealing in port talksOver the years, critical rail...


May 29, 1999

Proper dealing in port talks

Over the years, critical rail capacity has been shifted from freight to commuter operations, and today [CSX's] ability to move high volume rail freight through Baltimore suffers as a result.

CSX takes strong exception to Barry Rascovar's strident May 16 column concerning the Maersk/Sea-Land port decision, "With port double-cross, CSX shot itself in foot."

The column showed scant regard for the facts and insulted the intelligence and impressive work of the Maryland officials involved in the port decision by suggesting they were merely dupes of CSX.

State of Maryland and Port of Baltimore officials are to be highly commended for their efforts in making the Port of Baltimore a highly attractive option for a Maersk/Sea-Land megaterminal.

Gratuitous charges in Mr. Rascovar's piece would lead the reader to think that Maersk and Sea-Land did not act in good faith during the bargaining process. That's dead wrong.

It is insulting to officials of both ports and to Maersk, as well as our own company, to charge that CSX was "using Baltimore as a pawn to leverage a better deal out of New York and New Jersey."

The decision to locate a megaterminal, from a container-shipping company's perspective, is market-to-market based, not port-to-port.

In addition to the port infrastructure, highway access and railroad infrastructure are also important considerations in moving a product to market.

In this case, much of the cargo would ultimately be destined for the New York metropolitan area. That had to be weighed carefully in making this decision.

In fact, Maersk/Sea-Land made clear that a substantial portion of the traffic that would have landed in Baltimore by ship would then have moved by rail to New York, adding additional time and costs.

Both shipping lines negotiated in good faith and made these requirements known to state officials from the beginning.

While the Port of Baltimore offers many superior attributes, these additional inland costs had to be factored into the final decision.

Maryland's rail infrastructure is heavily used, not only moving freight to and from the Port of Baltimore, but serving local industry as well as MARC commuter and Amtrak trains.

CSX has invested heavily in its Maryland system and has worked hard to cooperate with Maryland commuter authorities. Over the years, critical rail capacity has been shifted from freight to commuter operations, and today our ability to move high volume rail freight through Baltimore suffers as a result.

Had our decision been to locate in Baltimore, that rail infrastructure would have required significant enhancements to accommodate a dramatic increase in rail traffic and ensure efficient rail service for existing rail customers.

CSX remains committed to Baltimore and Maryland. CSX is still the primary tenant at the Seagirt Marine Terminal, which under a long-term lease operates one of the nation's largest intermodal terminals.

And, we employ nearly 2,000 people statewide, with major rail facilities in Baltimore, Jessup and Cumberland.

While it is unfortunate that only one port could have been selected for our megaterminal, the decision to locate in New York/New Jersey was based solely upon the economic and transportation infrastructure issues faced by the shipping lines.

Did Maersk and Sea-Land strive for the best economic deal? Certainly. Did Baltimore put an outstanding package on the table? Unquestionably.

Was this a very tough decision? Absolutely.

Was it based upon CSX's bias for New York/New Jersey? Absolutely not.

Mark G. Aron, Richmond, Va.

The writer is executive vice president of the CSX Corporation.

Baltimore ought to change its name to "Whinemore" because that seems to be the city's response every time it feels slighted.

Worse still, is whining without having the facts straight: a case in point is Barry Rascovar's column "With port double-cross, CSX shot itself in foot."

CSX goes where the business is. Before the Conrail split, its port service extended to 25 Eastern ports, including Baltimore.

Baltimore is important, but CSX is not the B&O railroad anymore. Its focus is revenue generation, not Baltimore, and it doesn't care which port provides it. It goes where the ships go.

One port, however, that CSX does not consider one of its mainstays is what Mr. Rascovar called, "[the company's] huge rail operation in Norfolk."

CSX does not serve Norfolk. The port at Norfolk is served by Norfolk Southern Railway (NS) and the Norfolk Port Belt Railroad (NPB). CSX's lines in the Norfolk area end at Portsmouth, Va.

CSX has little infrastructure in Norfolk. What business CSX has in Norfolk is via the NPB and NS is obviously not predisposed to share the pie with CSX.

Undoubtedly, CSX likes to play hardball. In the case of NS, Baltimore will wish it had taken its bat and gone home before the game started. And now NS is in a position to pit Baltimore (Dundalk) against Norfolk.

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