Port user signing for 10 years

Atlantic Container deal is first to guarantee business for a decade

`Really good news'

Labor stands to benefit, as does city's stature among East Coast ports

On the waterfront

December 16, 1999|By Robert Little | Robert Little,SUN STAFF

The port of Baltimore has reached a 10-year agreement with one of its largest customers, a deal guaranteeing as much as $100 million in revenue and shoring up the city's position as a prime East Coast port for cargo such as farm equipment and heavy machinery.

Atlantic Container Line will pay about $10 million a year to lease facilities at the Dundalk Marine Terminal though 2009, with an option to extend the contract another 10 years.

Based in Goteborg, Sweden, but with its main office in New Jersey, Atlantic Container Line operates vessels on trans-Atlantic services connecting Europe and North America. It stops once a week in Baltimore, with vessels equipped to carry sealed containers as well as "roll-on, roll-off" cargo and goods shipped on pallets.The deal has not been formally signed, but it was approved yesterday by the state Board of Public Works, and a news conference is scheduled Monday with Gov. Parris N. Glendening and Atlantic Container Line President Olav Rakkenes.

Port officials say the contract is the first to guarantee business for such a long period. "This is exactly the kind of business we've targeted, and it's here for 10 years -- that's really good news for the port," said state Transportation Secretary John D. Porcari. Said James J. White, executive director of the Maryland Port Administration: "It's going to secure the Longshoremen's jobs, the freight forwarders, the truck drivers -- it really starts to build a good base of business for the port to grow on. I like 10-year deals."

Atlantic Container Line, currently in the third year of a five-year contract, shipped about 620,000 tons of cargo through Baltimore in 1998, making it the port's third-largest customer behind the Scandinavian automobile carrier Wallenius Wilhelmsen Lines and the Taiwanese container carrier Evergreen Marine Corp.

The Maryland Port Administration is trying to negotiate leases with Evergreen and Wallenius Wilhelmsen that would secure those companies' business for as long as 20 years.

White said signing Atlantic Container Line to a new contract was a priority because the company operates in a trade that the port has long considered a strength.

As container shipping lines have consolidated and cut expenses, the port of Baltimore has struggled to keep them because the city's inland location means lost time and higher vessel operation costs.

Ships hauling automobiles and machinery have not left the port, however, because their cargo is less time sensitive and it can benefit from a port that is closer to the Midwest.

While Atlantic Container Line ships containerized cargo, its vessels were not built exclusively for the trade, as are most in the industry. The company's service hauling steel, automobiles and heavy machinery is largely credited with keeping it profitable through several years of tight margins in the trans-Atlantic shipping trades.

For the first nine months of 1999, Atlantic Container Line reported a net profit of 35 million Swedish kronor, or about $4.1 million.

"They carry all kinds of things -- they've moved locomotives through here with those ships," said White. "Their service really hits on a lot of the targeted commodities that we're going after."

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