I write to convey Ports America Chesapeake's steadfast objection to the Baltimore City Council's request to increase the fees charged for oversize and overweight trucks associated with freight travel to and from the Port of Baltimore.
Ports America and its predecessor companies have operated in Baltimore for 89 years. We are committed to making investments that will strengthen the Port of Baltimore for the future. Ports America objects to the proposed fee increase because it puts the Port of Baltimore at a competitive disadvantage, and it will negatively impact the master lease and concession agreement between Ports America and the Maryland Port Administration.
As a result of our work experience, we know the shipping industry is very competitive. The margins are small, and various global factors determine shipping patterns, routes and entry points. Increasing the cost to move items to and through the Port of Baltimore only allows competing ports to devise more attractive economic incentives to lure away Port of Baltimore business — this is not a result Ports America wants, it is not a result that benefits the current and future employees of the Port of Baltimore, nor is it a result that benefits Baltimore.
Moreover, Ports America is in the process of investing hundreds of millions of dollars into the Port of Baltimore as a partner with the Maryland Port Administration in the 50-year lease and concession agreement to upgrade and to operate the terminal.
Ports America is building a new $105 million, 50-foot berth at the Port of Baltimore. With the completion of the Panama Canal expansion in 2014, it is expected that a larger number of ships, including new mega-ships, will travel to East Coast ports to reach customers more quickly and less expensively. Currently, a large percentage of ships use West Coast ports. This requires manufacturers to send products by rail to markets throughout the country. With a 50-foot berth, the mega ships that are becoming the norm in the maritime industry will have enough water depth to dock and bring additional business to the Port of Baltimore.
Also pursuant to the lease and concession agreement, Ports America will invest in other necessary infrastructure projects at the Port of Baltimore, saving the state hundreds of millions of dollars it would have had to invest in capital improvements; Ports America will make an annual payment to the state; and Ports America will provide ongoing revenues to the Maryland Port Administration during the life of the agreement. The partnership between the Maryland Port Administration and Ports America is expected to produce 5,700 new jobs, while the total investment and revenue to the state of Maryland has the potential to reach up to $1.8 billion over the life of the agreement. It will also generate $15.7 million per year in new taxes for Maryland.
Ports America asks the Board of Estimates to reject the City Council's request to increase the fees charged for oversize and overweight trucks because the proposed increase will have a foreseeable, negative impact on the financial projections and forecasts relied upon by the state and all interested parties when we finalized our long and complex negotiations related to the lease and concession agreement.
The Port of Baltimore employs about 16,500 workers. Out of about 360 U.S. ports, Baltimore is ranked No. 1 for handling roll on/roll off cargo; trucks; imported forest products; and imported gypsum, sugar and iron ore. The proposed fee increase is an impediment to us as we work our way through the global recession and as America moves towards a better job creation model.
The proposal does more harm than good.
Mark Montgomery, Baltimore
The writer is president and CEO of Ports America Chesapeake LLC.