Port wins `largest' pact in 295 years

20-year contract expected to double roll-on, roll-off cargo

January 25, 2001|By Michael Dresser | Michael Dresser,SUN STAFF

The port of Baltimore landed what state officials are calling the biggest deal in its 295-year history yesterday as the Board of Public Works approved a contract with a Scandinavian shipping company that is expected to bring at least 3,000 vessel calls over the next 20 years.

The port handles more than 500,000 tons of roll-on, roll-off cargo a year. The contract could more than double that amount.

The contract with Wallenius Wilhelmsen Atlantic LLC, which will be signed today at a ceremony aboard a company ship at Dundalk Marine Terminal, solidifies Baltimore's position as a major East Coast port for cars, trucks, tractors and other cargo that can be rolled on or off a ship.

Gov. Parris N. Glendening hailed the agreement as "the largest contract since the port was formed in 1706 as well as being the longest deal it has ever struck with a shipping line.

"The men and women who work in the port live in fear almost daily for their jobs," the governor said. "What this says to those men and women is you're going to have security in those jobs."

The agreement gives the shipping line three five-year options that could extend the lease for an additional 15 years, for a total of 35 years, with a guarantee of an average 150 calls a year by Wallenius Wilhelmsen's cargo ships.

Despite its enormous potential economic impact, the contract was approved unanimously - without discussion or fanfare - as part of a group of transportation contracts. The three-member board had been expected to act on the contract yesterday, but final details were not wrapped up until recent days.

Wallenius Wilhelmsen is the world's largest handler of roll-on, roll-off cargo - a category the state has emphasized in order to offset its decline as a port of call for containerships.

Under the pact, Wallenius Wilhelmsen guarantees that it will load or unload a minimum of 9.6 million tons of cargo over the 20-year period. If the shipping line stays the full 35 years, another 9 million tons would be guaranteed.

Port officials and a Wallenius Wilhelmsen spokesman stressed that those numbers are only minimums and that the actual amount of new cargo passing through Baltimore could be much greater.

Judi Scioli, a spokeswoman for the Maryland Port Administration, said Wallenius Wilhelmsen already had a contractual minimum of 200,000 tons a year and is already meeting the minimums in the new contract.

Scioli said it was difficult to project how much business could grow, but said the best indication is that the company is expanding its acreage at the port from 6 to 50 over the next five years - with the possibility of adding another 100 acres after that.

Andrea Bradley, public relations manager for the shipping line, said the contract will make Baltimore the company's East Coast hub and its largest port of call in the United States - and possibly worldwide.

Bradley said Wallenius Wilhelmsen chose Baltimore because of its location, convenient rail and road connections, expertise in roll-on, roll-off cargo and good labor relations.

"This is a huge accomplishment by both parties. This is a very big deal for Wallenius Wilhelmsen," she said.

The port estimates the annual revenue from the lease at $1.2 million over the first five years, and $2.9 million for each of the next 15 years.

The first phase calls for the port to build a 120,000-square-foot cargo shed at Dundalk; the second could expand the facility by another 100,000 square feet.

Glendening said the groundwork for the contract was laid during his 1996 trip to Norway when he met with shipping line executives. At the time, he said, they agreed to work toward a long-term relationship with the port.

The actual negotiations with Wallenius Wilhelmsen, already one of the port's biggest customers, have taken about two years, state officials said.

The $1.4 billion shipping line has said it wanted to consolidate its East Coast operations at a single East Coast port, and the contract is as important for the business it keeps in Baltimore as the cargo it gains.

"We had a lot to lose if we weren't chosen," Scioli said.

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