Toyota Motor Sales USA Inc., a fixture in the port of Baltimore for more than 14 years, said yesterday that it is moving its port operations to Newark, N.J., taking 126 jobs and dealing an economic blow to the city's waterfront.
The auto manufacturer brought 42,500 imported cars to Baltimore's Fairfield Auto Terminal by ship last year and about 74,000 by rail from plants in Kentucky and Indiana.
The business accounts for about 14 percent of the 300,000 cars that arrived in Baltimore by ship last year and more than a third of the 200,000 domestic cars processed locally.
A Toyota spokesman said the decision was part of a companywide plan to cut transportation costs by consolidating vehicle-processing operations.
"We're going to rely on processing and accessorizing all of our North American-built vehicles at the manufacturing plants, so basically the port processing facilities will just handle imports," said Xavier Dominicis, the spokesman.
The setback follows the signing by Baltimore vehicle terminals of several deals over the past year that will bring up to 189,000 more cars and trucks to Baltimore's docks annually.
The most recent was last week, when Porsche Cars of North America Inc. agreed to bring 12,000 cars to Baltimore beginning this spring.
"We've got a great batting average right now ... but this is a fragile business, and to think that you're going to continue to grow and grow without losing an account, you're just fooling yourself," said James White, executive director of the Maryland Port Administration.
The Maryland Port Administration has made attracting more cars and other roll-on/roll-off cargo a top priority in its bid to revitalize public and private marine terminals.
Auto processing is a niche business that requires a lot of labor to drive the cars off arriving ships and railroad cars. Local workers are also employed to clean and accessorize the cars before they are delivered to dealerships.
Losing the business is a blow, but port officials say the announcement gives them an opportunity to go after more auto imports, which will bring ships to the city and result in more longshoremen jobs.
"It's kind of lessened the impact they had on our marine terminals," White said of Toyota's shift to domestic manufacturing plants. "When they first started, everything they were doing was international business and came by water."
Toyota's 44-acre Fairfield facility is owned by the state and leased to the automaker. The company will leave the space when its lease expires in October.
White said he is confident that state officials will find someone to take over the space. With Hyundai, Honda, Ford, Volvo and Porsche all planning to bring more cars to Baltimore this year, port auto processors say they are running out of room.
"As the port continues to develop its market strategy, which is to grow breakbulk and [roll-on/roll-off] traffic, the need for additional property will increase and I'm sure that this property will fit into that plan," said Douglas W. Tipton, president and chief executive officer of Amports, Baltimore's largest vehicle-processing company.
Amports is running out of space at its 77-acre facility at the Dundalk Marine Terminal and is approaching capacity at its 125-acre space at the Fairfield terminal.
ATC Logistics, another port auto-processing company, also has said that it needs more room to grow. The company recently signed deals with Honda and Ford.