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Port of Baltimore Receives Investments for Expansion to Compete Globally

From 2008-2013, the Port of Baltimore has made significant investments in upgrading its cargo handling infrastructure to accommodate what officials hope will be a corresponding increase in cargo volume brought about by ongoing improvements in the Panama Canal. Beginning in 2008, the Panama Canal Authority began a project to add a third set of locks, which will allow much larger vessels to navigate the Canal than is currently possible. This is expected to result in much higher cargo volumes in the Port of Baltimore because of the per unit cost savings that will be possible for cargo shippers to and from the important Asian markets and the eastern U.S. due to the greater carrying capacity of these larger vessels.

Based on the way these investments have been targeted, it is safe to say that most of the anticipated increase in volume will be in the area of containerized cargo. While the Port already enjoys a leading position in the volume of automobiles and Ro-Ro cargo handled, container cargo remains the largest portion of its overall cargo. In fact, over 60% of general cargo handled at the Port in 2012 was containerized. It is hardly surprising then that the improvement effort has focused on the Port’s principal intermodal container facility, Seagirt Marine Terminal. As of 2012, the public-private partnership of Seagirt’s operator, Ports America Chesapeake and the State of Maryland, had dredged the container berth at the Terminal to 50 feet to accommodate the super Post-Panamax vessels, and also installed four specially designed cranes to handle the much larger dimensions of these vessels.

In addition, in September of 2013, $29 million in state and federal funding was announced which will go to deepening the Port’s main access channel to allow easier access for the larger vessels. The plan is to use the dredged material from that project to fill in 7.6 acres in the Fairfield area of the harbor to be used as a new cargo staging area to handle an estimated 20,000 more vehicles a year. In order to free up space at Seagirt to move the increased volume of containers, the State has provided funding to allow CSX to move its current intermodal handling facility to a new, state-of-the-art facility at its Mount Clare rail yard in Southwest Baltimore, which is scheduled for completion in 2015. This intermodal facility is seen as a critical element to the Port’s success in adapting to the changes expected to begin in 2015, because it will allow CSX to move the additional containers on more efficient “double-stacked” trains throughout the eastern U.S. 

These investments should put the Port in a position to handle the higher container volume expected in 2015, when the Canal improvements are supposed to be finished, and thereafter. Of course, not all aspects of the Port’s business will be affected by the Canal changes, as much of the trade in autos, bulk ore, coal and forest products relate to areas not served by the Canal, such as Europe, the Middle East and Africa.  There are also potential downsides, such as a downturn in trade with China or the failure to get all the different parts of the Port’s improvements completed on time. These different parts have to work with each other in a coordinated fashion, and a delay in one part could cause problems with the functioning of the others. With interest in the advancement of the project by both state and federal authorities as well as commercial entities, hopefully factors within operational control will be mitigated and the Port can move forward.

For additional information on the specific impact these investments will have on the maritime, transporation and shipping industry in Maryland, please contact Robert O'Brien at rpobrien@nilesbarton.com.

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