Maersk hints at city getting a 2nd chance

Largest shipping line irked by N.Y. delay on East Coast hub

Port of Baltimore

March 08, 2000|By Robert Little | Robert Little,SUN STAFF

Just when officials at the port of Baltimore had gotten over their failed courtship of the world's largest shipping line, it seems that industry giant Maersk Sealand is flirting with them again.

The head of the Danish shipping conglomerate, which rejected Baltimore as the site for a new East Coast cargo hub last year, says the company might reconsider that decision because of foundering contract negotiations with its first choice, the port of New York and New Jersey.

Maersk Sealand Chief Executive Officer Tommy Thomsen says he is "frustrated" by the politics in the Port Authority of New York and New Jersey, where a feud between two governors has stalled his company's plans.

"If it drags on too long, we'll have to reconsider our options," Thomsen said in an interview yesterday. "If we were to treat our major customers the same way -- I don't think we would be in business for long."

Baltimore officials have followed the negotiations intently for several months, saying they would happily resume contract talks with the company if its deal with New York fell through. But until now, Thomsen has always said that Maersk Sealand's selection of New York would not be reconsidered.

The chance that Maersk Sealand would move its operations to the port of Baltimore was always a remote one, and local port officials say it probably still is.

But they also say that Maryland's offer to build the company a $300 million facility at the Dundalk Marine Terminal still stands, and that they have held frequent discussions with Thomsen and other Maersk Sealand officials as feuding in New York has intensified.

"We view this as still an opportunity for Maryland because they haven't inked the deal," said James White, executive director of the Maryland Port Administration, which manages the state's public marine terminals.

"I've been corresponding with them at the highest level, telling them that we're here, ready to sign a deal, and that they won't have those kinds of problems in Baltimore," White said.

Maersk Sealand agreed in May to sign a 30-year lease at the marine terminal in Elizabeth, N.J., operated by the Port Authority of New York and New Jersey. The port authority promised to renovate the facility with modern cranes, berths and cargo-handling capabilities.

Maersk Sealand has since consolidated business in Elizabeth, but the terminal improvements have not begun because the port authority has not approved the lease.

New York Gov. George E. Pataki and New Jersey Gov. Christine Todd Whitman share power within the port authority -- which also manages the New York area's airports, bridges, tunnels and commuter services -- and they frequently battle over deals that seem to favor one state over another.

Pataki has said he considers the money for Maersk Sealand's terminal to be a New York-funded subsidy for a New Jersey project, and he has held up signing the lease until changes in port authority spending practices take place. Calls seeking comment from both governors yesterday were not returned.

"As far as revisiting our decision, I don't think we're at that point yet, but much could be learned within the port authority by looking at the approach that Maryland took," Thomsen said. Gov. Parris N. Glendening and the Maryland General Assembly actively supported the bid to bring Maersk Sealand to the state.

Maersk Sealand was created in December when Maersk Inc., based in Copenhagen, Denmark, bought the international shipping division of Sea-Land Service Inc., based in Charlotte, N.C. The combined entity is the largest container shipping company in the world, responsible for a quarter of all the container cargo shipped through the Port of New York and New Jersey.

The company's East Coast hub is expected to handle more than 500,000 truck-size cargo containers a year -- about twice that handled by the entire port of Baltimore. If Maersk Sealand were to consolidate at the Dundalk Marine Terminal, Baltimore would become one of the East Coast's major container ports and rival the ports in and around Norfolk, Va., in size.

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