A bright future for Baltimore's port

Strategic plan: Focus on niche markets, unified marketing makes the difference.

November 14, 1999

GALE-FORCE winds and rocky seas that placed the port of Baltimore in peril are subsiding.

Not only has the port weathered these storms -- rail deregulation, labor conflicts, loss of shipping lines and a shrinking number of cargo vessels worldwide -- but Baltimore has started to redefine itself as an important East Coast maritime center.

The stakes are high -- for Baltimore, and the state.

Nearly 18,000 people earn their living directly through the port. Forty percent of those people call the counties home. Another 26,000 jobs are linked closely to shipping. All told, 126,000 Marylanders jobs have a port connection.

That translates into $1.8 billion in paychecks each year and $380 million in purchases. The port is a powerful economic engine.

Over the next three days, we will look at Baltimores maritime turnaround and its prospects. Its not all upbeat. But the gloom and pessimism that have permeated the docks since the 1980s have given way to cautious optimism.

In recent years, the port has had success targeting specialty or niche, cargo.

Aggressive efforts to attract shipping spawned negotiations with major cargo-movers. And promising markets in South America and Asia are looking at Baltimore because of its proximity to lucrative Midwest population centers, a 50-foot shipping channel, an efficient work force and modern facilities.

Two converging factors are at play -- good planning and a newfound unity in the citys port community.

It began in 1996, when Baltimore decided to go after specialty cargo as part of a strategic plan. Since then, shipments of lumber, automobiles, construction equipment, agricultural vehicles, paper and pulp have risen. Containerized cargo is holding its own, despite the bitter loss of a bid to triple the ports container business last spring.

Ironically, Baltimores failed effort in May to become the East Coast load center for the giant Maersk-Sea/Land steamship line has proved beneficial.

All segments of the local port community -- with one glaring exception -- pulled together to make an aggressive bid for the Maersk-Sea/Land business.

That spirited harmony is still the talk of maritime circles. It led to current negotiations with Wallenius Wilhelmsen Lines, the worlds largest shipper of roll-on, roll off vehicles, about consolidating East Coast operations here.

There also are encouraging signs that Baltimore may yet get a second chance to win more business from the Danish firm now in the final stages of acquiring full control of Maersk-Sea/Land from CSX Corp.

Improved labor scene

An improved labor environment is one of the keys to Baltimores port revival. Maritime unions, desperate for work, have joined with the state and the private sector in making bids for big shipping contracts.

Thats quite a change from the days when Baltimore had a worldwide reputation as the port that wont work in the rain. At the first sign of a sprinkle, longshoremen used to walk off the docks.

This came to symbolize a port burdened by high labor wages and strict work rules.

Rival ports effectively exploited this weakness.

But nowadays, longshoremen not only work in the rain, they have agreed to flexible rules that let the port advertise itself as a place where dock workers accommodate shippers needs.

For instance, in making its pitch for the Maersk-Sea/Land business, the port argued that its longshoremen load and unload cargo 75 percent faster than New York.

New railroad in town

Until this summer, Baltimores rail situation was a hindrance. CSX Corp. ruled the rail roost. Though the history of railroading, and of CSX, started in Baltimore, the company gradually moved its operations out of town.

Port officials complained for years that CSX favored its larger railhead at the port of Norfolk. The companys decades of disinvestment, as one state leader put it, thwarted efforts to grow local cargo business. CSX also played a pivotal role in killing Baltimores hopes of landing the Maersk contract.

Now theres a new railroad in town -- Norfolk Southern Railway, an energetic rival to CSX thats eager to win business by offering improved service and appealing rates.

A decided detriment has turned into a strength.

Jumbo container ships

Ports along the East Coast battle fiercely for traffic. Consolidation of shipping lines and joint operating agreements have heightened this struggle for far fewer cargo vessels.

But a second economic factor promises even bigger changes: the arrival of jumbo container ships that few ports can accommodate.

Making a profit now requires economies of scale. Thats why Maersk is building a new generation of behemoth cargo ships. These vessels, nearly three-and-a-half football fields in length, can carry 6,000 truck-size aluminum containers -- 50 percent more than todays biggest ships.

This could give Baltimore a big edge: Its one of the few East Coast ports with a channel deep enough to handle such big loads.

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