New deals point way for a changing port

On the waterfront: Things are happening at the port of Baltimore.

January 21, 2001|By Paul Adams | Paul Adams,SUN STAFF

If there was one moment last year that characterized the gradual transformation of Baltimore's port, it probably came in late June. That's when local longshoremen agreed to amended work rules that shipping line Wallenius Wilhelmsen demanded as part of its offer to develop a new load center at the Dundalk Marine Terminal.

With flexible labor agreements in place, the Scandinavian shipping line was prepared to negotiate a 20-year lease, committing it to bringing thousands of additional cars, tractors and other cargo that can be rolled on and off ships.

"It's intended to grow our business," said Chris Connor, executive vice president of the company. "I think once we get beyond the first quarter, you will see that start to happen."

The lease is just the first of a series of deals that will shape the port in 2001. Wallenius Wilhelmsen and other private port tenants are leading the restoration of Dundalk into a more modern terminal focused on the type of niche cargoes now becoming the port's strength, and its future.

In the year ahead, the port will break ground on Wallenius Wilhelmsen's new 50-acre roll-on/roll-off cargo terminal and complete two new warehouses - one at Dundalk and another at the South Locust Point Marine Terminal. The warehouses will handle an additional 550,000 tons of magazine-grade paper shipped by UPM-Kymmene Corp. and Metsa-Serla, two of Finland's largest paper producers.

Simultaneously, work will continue at Dundalk on new pavement and lighting as part of an expansion for Amports, the port's largest auto processing company.

"What we want to do is take Dundalk and make it a state of the art ro/ro terminal and concentrate the container operations at southside and Seagirt [Marine Terminal]," said James White, executive director of the Maryland Port Administration, which operates the port's public marine terminals.

Though containers tend to generate more man hours than many niche cargoes, port officials expect Baltimore longshoremen to benefit from the change in emphasis. Union longshoremen worked just under 2 million man hours last year and expect to work about 2 million this year.

The changes at Dundalk are far different from what port officials envisioned two years ago, when the state was trying to entice two of the world's largest shipping lines into building a major new cargo hub at Dundalk. The deal would have brought a half-million cargo containers to Dundalk annually, reversing more than a decade of decline and transforming the port overnight into an East Coast powerhouse.

In the end, Maersk Inc. and Sea-Land Service Inc. chose to stay in the port of New York/New Jersey, which is closer to the ocean and in the midst of one of the nation's largest consumer markets.

It was a crushing defeat for Maryland, which had pledged some $250 million to bring the business to Baltimore. But it also spurred the port to refocus on an 18-page strategic plan drafted in 1996. The document is a blueprint for attracting ships hauling automobiles, heavy equipment and paper products, while placing less emphasis on containerized cargo - the maritime industry's more lucrative glamour trade.

The merits of the strategic plan became apparent last fall, when port businesses landed deals that have softened the blow of the Maersk/Sea-Land defeat.

Balterm, a private terminal operator, got the UPM-Kymmene and Metsa-Serla contracts in October, after years of lobbying the two companies.

Beginning this year, the five-year agreement will increase the port's handling of forest products by about 45 percent.

In September, Amports landed a deal with Ford Motor Co. to move an additional 33,000 Ford and Volvo cars through Baltimore annually. The company will need an additional 30 to 34 acres at Dundalk this year, requiring the state to make a variety of improvements to the terminal's parking surfaces and overhead lighting, among other things.

The contract represents a small portion of the nearly 300,000 vehicles the port handles annually, but Amports officials expect it to be just a down payment on a larger number of Ford family cars that will come to Baltimore in the near future.

"I'm convinced that will grow," said Jim Davis of Amports, referring to the Ford contract.

In 2001, Baltimore stands to gain from a number of trends in the automobile industry. After a round of consolidation - including Ford's purchase of Volvo in 1999 - manufacturers are looking to concentrate their many vehicle brands at fewer ports.

Industry sources say a number of large manufacturers are looking to sign new port contracts in the coming year, and Baltimore's automobile processors are getting increasingly confident about their prospects.

"With only two or three more accounts that Baltimore now does not have, you could close to double that number," said Davis, referring to the total number of cars the port currently handles.

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