Keeping trade afloat

Port: In a year that saw world trade decline for the first time since the early '80s, Baltimore saw a 7.3 percent increase in ship calls to port. Officials credit a 5-year-old strategy to diversify the port's cargo mix.

May 26, 2002|By Paul Adams | Paul Adams,SUN STAFF

At first glance, it looks as if Baltimore's longshoremen have reason to worry.

The recession that gripped the nation after Sept. 11 socked two of the waterfront's biggest job generators as businesses and consumers curtailed spending.

Containerized cargo, which accounts for about 70 percent of the business at Maryland's public marine terminals, declined by 3.2 percent in 2001, ending a small but steady growth streak that had lasted several years. Roll-on/roll-off cargo - such as tractors and heavy machinery - fell 10 percent despite the port's blockbuster deal last year with Scandinavian shipping line Wallenius Wilhelmsen, which pledged to boost its business in Baltimore in exchange for various terminal improvements.

But maritime labor and business leaders aren't panicking.

In a year that saw world trade decline for the first time since the early 1980s, Baltimore enjoyed a 7.3 percent increase in the number of ships coming into port - the first significant increase in ship calls in the past five years. And while some trades took a hit, others soared by double digits as a result of an aggressive pursuit of niche cargo, such as lumber, paper and automobiles. All three cargoes were seemingly unaffected by economic malaise.

"We see things picking up," said an official with Local 333 of the International Longshoremen's Association, who requested anonymity. "Whatever we seem to lose on one end, we pick up on the other end."

The port's paper, lumber and wood pulp shipments climbed by 35 percent from 2000 to 2001, to 1.2 million short tons. Waterborne automobile shipments grew to 308,310 units, an increase of almost 10 percent over 2000. Four new contracts signed with auto manufacturers in the past year will result in more than 400,000 cars and trucks rolling across Baltimore's docks this year, port officials said.

"I think the port administration and state of Maryland have demonstrated a desire to be a major player in the car business, and the fruits of that are being seen now," said James E. Butcher, president of shipping line HUAL North America Inc., which transports cars from Baltimore to the Middle East and elsewhere.

Maryland port officials credit a more than 5-year-old strategy to diversify Baltimore's cargo mix by pursuing business that tends to get shoved aside at competing ports. A series of contracts inked in the past year and a half has resulted in steadier work for longshoremen, taking some of the sting out of the recent recession and helping to make up for a stagnant container business.

"I think any time you're diversified, you're hit less hard [by a recession], and that's something good for the port of Baltimore," said Capt. Eric Nielsen, president of the Association of Maryland Pilots, whose members guide oceangoing ships through state shipping channels.

Economists say the recession began in spring 2001 and accelerated after the Sept. 11 attacks. But the brunt of the economic slowdown didn't hit the port of Baltimore until January and February of this year, many industry experts said. That's because it usually takes a few months before businesses slash orders for goods and supplies, resulting in reduced demand for ships.

Maryland bay pilots saw their business decline about 21 percent in January, from January 2001. The numbers have steadily improved since then and are now near pre-recession levels.

"What happened post-Sept. 11 was a tremendous drop-off in global container movement," said Peter Shaerf, a shipping analyst with American Marine Advisors Inc. Much of the world's consumer goods - everything from electronics to clothing - is packed in steel containers and transported by ship, making container shipping the most coveted business among ports.

Baltimore, which has struggled in the past to hang on to its share of the container trade, held its ground during the latest slowdown. Norfolk, Va., one of Baltimore's fiercest competitors on the East Coast, experienced a 3.2 percent decline in containerized cargo last year, according to data from the American Association of Port Authorities. That was identical to Baltimore's decline.

Charleston, S.C., another major East Coast container port, saw its business drop 6.4 percent. Only the port of New York/New Jersey escaped the trend, posting a nearly 9 percent increase for the year. Meanwhile, some major West Coast ports - such as Seattle - saw double-digit declines.

James J. White, executive director of the Maryland Port Administration, said Baltimore's container business will probably hold steady this year. But there is optimism it could improve. For example, key shipping lines recently added new service linking Baltimore to critical markets in the Far East for the first time since 1999. Service to the Far East is considered important to a port trying to bill itself as a full-service trade center.

"We always knew we had a gaping hole for not having Far East service," White said.

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