Hopes are high for expanded Seagirt 

Posted: 7:01 pm Sun, November 22, 2009
By Nicholas Sohr
Daily Record Business Writer

Maryland leased Seagirt Marine Terminal to a private port operator with 2014 in mind, when an expanded Panama Canal will allow longer, taller and wider ships to pass from the Pacific Ocean to the East Coast.

The public-private partnership gives control of the terminal, the main on- and off-loading point for shipping containers in the Port of Baltimore, to Ports America Chesapeake, a subsidiary of Ports America Group, the company that has operated Seagirt since it opened.

The agreement requires Ports America to invest more than $600 million in port-related infrastructure improvements over the 50-year life of the lease, pay yearly rent and make an up-front payment of more than $100 million to fund other Maryland Transportation Authority projects.

Supporters of the project and Maryland port officials expect East Coast terminals like the expanded Seagirt to be more enticing to shippers than unloading cargo at Pacific ports and sending it across the country by truck or train.

But some industry analysts, like George Pickral, of the financial services firm Stephens Inc., are withholding judgment on the impact its opening will have on East Coast ports.

“There are a lot of estimates out there and it’s too early to get a good gauge,” Pickral said. “It will depend, to a certain extent, on trade flows, port congestion and the cost of inland transportation.”

The Panama Canal Authority estimated in 2006 that 61 percent of Asia to East Coast cargo was unloaded on the West Coast, while the canal handled 38 percent of the cargo. The authority predicts 296 million tons of container cargo will pass through the canal in 2025, compared to 98 million tons in 2005.

There was as at least one shipping agency already eyeing the deeper berth during Friday’s announcement. The green containers of Evergreen Shipping Agency (America) Corp. dot the stacks at the terminal. The company is one of its most frequent callers.

Wesley J. Brunson, the line’s president, said he already has the deeper-draft ships and would be sending them to Seagirt.

“The ships are already calling at West Coast ports right now,” he said. “You have to build it [the berth] to get the ships here.”

Seagirt opened in 1990 with three 45-foot berths serviced by seven cranes. The terminal handles about 300,000 TEUs, or 20-foot containers, annually, according to transportation officials.

“When these berths here were designed, when the cranes were designed, the biggest ship on the sea was probably a 4,000-TEU ship,” said James White, executive director of the Maryland Port Administration. “Today they’re building ships 14,000 TEUs. They’ve just continued to get bigger and bigger and bigger, taking advantage of the economies of scale.”

The biggest ship to call at Seagirt was capable of carrying 6,400 TEUs, but came only half-full because of the port’s size restrictions, White said.

Ports America said it will begin the estimated $105 million construction of a 50-foot berth by 2012 and have it open in time to accommodate the bulkier ships expected from the canal. The company will install four new cranes that will tower over the older bunch and be able to handle containers stacked 20 wide and seven high.

Port and state officials say the arrangement and capital improvements will bring 2,700 permanent jobs to the port and related industries, and another 3,000 construction jobs. They expect $15.7 million per year in new state tax revenue as a result.

“Seagirt has been a workhorse for our containers for almost 20 years now, but clearly for us to remain competitive we need to make capital investments in the facility so we are prepared for the new world after 2014,” said state transportation Secretary Beverley K. Swaim-Staley on Friday, just after Gov. Martin O’Malley announced the deal. “That’s what this is going to allow us to do. Otherwise, we were looking at the potential of a loss of jobs and a loss of our competitive advantage.”