Port extends deal with BMW, strengthening auto import business

Five-year contract includes new Baltimore facility, about $2.5 billion a year in vehicles

  • BMWs are driven off a Wallenius Wilhelmsen ship at the Port of Baltimore. BMW officially opens a new Vehicle Distribution Center at the port.
BMWs are driven off a Wallenius Wilhelmsen ship at the Port of… (Kim Hairston, Baltimore…)
September 18, 2014|By Kevin Rector | The Baltimore Sun

A new five-year deal between the port of Baltimore and high-end automaker BMW will keep bringing an estimated $2.5 billion worth of vehicles through what is already the top auto import operation in the nation.

Officials announced the extended partnership — and a large new BMW processing center at one of the port's terminals — at a waterfront gathering Thursday, saying the new facility will bolster Baltimore's dominance in the market, create 200 jobs and set the course for growth.

"Our portfolio just got better," said Jim White, the Maryland Port Administration's executive director, who promised to do everything in his power "to make sure a five-year commitment turns into a 20-year commitment."

The automaker's new commitment comes amid continuing fears of labor unrest at the port after a strike by Baltimore longshoremen last fall.

The deal is not the first between the port and BMW, which includes Mini. The first of the maker's vehicles began arriving in March 2010, under a deal for BMW to move 50,000 vehicles into Baltimore each year. Since then, BMW has increased that to 60,000 vehicles a year.

Volume is likely to rise substantially in the coming years with the new processing facility, said Ludwig Willisch, president and CEO of BMW North America. The company expects 166,000 vehicles to arrive through the end of 2016.

The new processing facility will enable the company to customize tens of thousands of imported vehicles to local customers' specifications per year, serving a network of nearly 100 dealerships throughout the automaker's central and eastern regions.

He said BMW is bullish on the local automobile market and sees continued growth in Baltimore as inevitable.

"Every year our customers in Maryland continue to show us how much they love BMW automobiles, and today we can return the favor," said Willisch as he stood dockside in one of the port's busy terminals in Dundalk.

Behind Willisch, the giant orange hull of a Wallenius Wilhelmsen Logistics ship floated high in the water, after having offloaded a fresh order of BMW models, including the M3, 328i and 435i.

The Norwegian-Swedish carrier is the third partner in the lucrative new deal for Baltimore, handling the delivery of the automobiles from northern Germany. Ray Fitzgerald, president of the company's Atlantic Division, called Baltimore the "premiere port facility" for automobile delivery in the Northeast and Mid-Atlantic, and said the new partnership with BMW marks a new "era of growth" for both companies at the port.

The occasion brought a large gathering of officials to a tented affair under cloudy skies, including Helen Delich Bentley, the former congresswoman and current port adviser for whom the port is named, and Colin Tarbert, Baltimore's deputy mayor for economic and neighborhood development.

Within the new facility, mechanics and other workers will outfit BMWs and Minis with a range of accessories, including spoilers, custom wheels and exhaust systems. They also will check for any damage the vehicles might have sustained in crossing the Atlantic and install software upgrades, said Craig Westbrook, BMW North America's vice president of after sales.

Dealers want vehicles to be fully outfitted before they arrive at their lots because they begin paying interest as soon as they receive them, "which is really great for us," White said, because it means more processing work at port facilities.

The new deal will create 40 jobs in the processing facility and 160 on the docks and in associated fields at the port, White said.

The port provides 14,600 jobs, $3 billion in personal wages and salaries, and more than $300 million in annual state and local taxes. Including Baltimore's private terminals, the port moved 30.3 million tons of international cargo in 2013, valued at more than $52 billion.

Last year was a record-setting year in terms of automobiles, as the port handled 749,100 cars and trucks, up from 652,000 in 2012, according to the port administration.

Recent labor tensions have made continued growth uncertain, as one of the dockworker unions that handles automobiles at the port, International Longshoremen's Association Local 333, is in a protracted contract dispute with employers. The standoff, which has included a strike that shut down port operations for three days in October, has prompted diversions of cargo by some shippers wary of labor instability.

Westbrook said the labor situation was considered by BMW when the company evaluated locating its new facility here, but was outweighed by Baltimore dockworkers' reputation for moving vehicles well and the port's prime position for serving population centers from the Mid-Atlantic to the Midwest.

Wallenius' Fitzgerald said the vehicle business is not as threatened by the labor dispute as container cargo, and that the labor situation overall is "phenomenally improved" from past decades.

Riker "Rocky" McKenzie, president of Local 333, said BMW's commitment is "another testimony" to Baltimore dockworkers' hard-won reputation for handling automobiles well. He also said it was a show of confidence in the stability of the workforce, which he said remains committed to working the docks as contract negotiations continue.

For Bentley, the deal signifies how far Baltimore has come since it received its first imported vehicles nearly 60 years ago, which she remembers occurring at Pier Six off Pratt Street — now the heart of the Inner Harbor commercial district.

"What a remarkable transition there has been from that time in the automobiles, the types of ship, bringing them in and the work that is done here in the port to prepare them for marketing," Bentley said. "It makes the port stand out in the world."

krector@baltsun.com

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