Shipping line to extend port pact

Taiwan-based Evergreen adding service for 10 years

July 23, 2008|By Laura McCandlish | Laura McCandlish,SUN REPORTER

Taiwan-based Evergreen Marine Corp. will sign today an agreement to continue service to Baltimore for 10 years as it eyes an increase in traffic between the East Coast and Asia.

The new longer-term contract keeps Evergreen's guarantee to move at least 40,000 loaded containers through Seagirt Marine Terminal annually. Evergreen is the second largest container line operating in the port and the only one to provide direct service to Asia, a market port officials have tried to expand in recent years.

"To get a major shipping line like Evergreen to commit to the port of Baltimore - we're lucky to get one of these agreements every two to three years," said James J. White, the Maryland Port Administration's executive director. "The growth with this Asian market has just exploded."

Gov. Martin O'Malley and Transportation Secretary John D. Porcari will herald the agreement with White and Evergreen executives at Seagirt this morning. It is the most significant contract White has overseen since he reassumed the top port job last summer after a two-year absence.

As the port struggles to bolster lagging container traffic at Seagirt, its Evergreen service is a bright spot. The volumes Evergreen handles in Baltimore have increased 126 percent, to about 100,000 containers annually, White said. It is the port's fastest-growing container line.

Overall container traffic at Seagirt dropped 2 percent in 2007 to 479,123 TEUs, or the equivalents of 20-foot containers, from nearly 490,000 in 2006. In May, French-owned CMA-CGM and China Shipping halted their joint weekly service that brought nearly 30,000 containers annually from Europe to Seagirt.

Evergreen's extended contract is contingent on the expansion of the Panama Canal by 2014 to allow Asia's biggest ships to pass through. If the plans to deepen and widen the canal fall through, Evergreen has the option to back out of its contract after five years, White said.

Those larger ships would also require a 50-foot-deep berth at Seagirt at a projected cost of $130 million.

Port officials are considering various options to fund the project.

John S. Connor Inc., a Glen Burnie-based global logistics company, said Asian-bound ships are booked up due to a surge in local exports. Shipments on Evergreen's vessels in Baltimore must now be booked a month out, while only a window of a few days was required last year, said Butch Connor, the company's director of ocean operations.

To accommodate such demand, the port has asked Evergreen to bring larger ships into Baltimore, White said.

"It's imports and exports: It's been a great two-way trade for Evergreen," he said.

Baltimore could also benefit as more shipping lines divert service from the congested West Coast, though it requires a day's sail up Chesapeake Bay, said Paul Bingham, a principal with Global Insights Inc. who monitors the port sector.

"It's rarely going to be the first choice of call for an Asian service on the East Coast," he said. "But for certain services it's still going to make sense to reach the inland location."


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