Maryland companies, port anxious about Egypt turmoil

Firms cancel trips, help employees flee country

Ships that normally pass through the canal would take longer to arrive in U.S. ports because vessels would have to round Africa. Such a disruption could add a week or more to shipping times, and would likely lead to higher prices for goods and fuel destined for American consumers, experts say.

"Virtually everyone in Egypt understands the importance of the canal, and no one on … any side has expressed any interest in endangering what is one of Egypt's main revenue sources," said Paul Page, editorial director for The Journal of Commerce.

"The problem becomes, if this goes on and it does blow up more, if there is some real threat to the Suez, you'll see simply higher supply-chain costs, because the Suez Canal is such an important transit point for the supply chain worldwide," Page said.

Managers at Baltimore-based customs brokers Samuel Shapiro & Co. have been working to get the most up-to-date information on the constantly changing conditions at Egypt's ports, providing updates to customers — U.S. businesses that export or import — and, if necessary, arranging to reroute shipments.

"Basically, there's really only one main port operating, Port Said, and that's limited in operations," said Matt Kobussen, transportation manager for Shapiro. "The vessels that are loaded with containers pull up and off-load but that's it."

He said most customers who are trying to arrange shipments are facing difficulties booking carriers. "Most carriers now that are going to Egypt have stopped accepting new business, no new freight, because they're not sure what's going to happen," Kobussen said.

Christine Malloy, a transportation service coordinator for Shapiro who handles shipments into and out of U.S. ports, including Baltimore's, said shipping schedules have become even more complicated because of curfews imposed by Egypt's government. Workers are "only allowed to work so many hours a day, and some are not coming to work," she said.

Shipping has been delayed by two to three weeks, and that time grows with each day the unrest continues. One of the last import shipments the company handled from Egypt had to be rerouted through Italy, Malloy said.

Bob Walker, assistant secretary of the Maryland Department of Business and Economic Development, said Maryland became a principal exit point for goods headed to Egypt in part because of the port of Baltimore's location.

As the most inland port along the East Coast, it enables shippers to get deeper into the United States for shipments headed west and allows exporters to more quickly get their products off expensive trucks or trains and onto ships. Baltimore's port is particularly popular with companies handling roll-on/roll-off cargo, which is typically construction, farm or military equipment or vehicles.

Exports from Maryland to Egypt, through the port and elsewhere, peaked in 2006 at $800 million before starting to decline. Last year, from January to November, exports were down by about half from the peak four years earlier, according to the U.S. Department of Commerce. Canada, the Netherlands and China were the state's top three export destinations last year, according to the Maryland Department of Business and Economic Development.

"We saw a drop in exports after the economic crisis took hold," Walker said. "Nevertheless, it remains a significant export destination."

But James J. White, executive director of the Maryland Port Administration, said the port's share of trade with Egypt has grown as the world economy has improved in the past year. Tonnage shipped through the port — both exports and imports — to Egypt rose from 170,000 tons in 2008 to about 400,000 tons from January through November last year, he said.

"It is a business that's growing for us," White said.

White said the major imports from Egypt in the past year include liquefied natural gas used at Cove Point, coke used to produce steel, and road salt. On the export side, automobiles and roll-on/roll-off cargo represented 18,000 tons worth of the cargo through November.

White said he hopes that trade will continue uninterrupted because of the importance of the Suez Canal to Egypt's — and the world's — economy.

"It's very concerning what's happening over there," he said. "The way the world economy is today, I don't think anyone wants to put at risk any revenue source they have."

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