Baltimore may lose hundreds of jobs, tens of millions of dollars in economic activity and half of the port's containerized cargo following the state's decision not to build a new rail cargo transfer facility in Morrell Park.
State and port officials scrambled Friday to outline alternatives to shoring up Baltimore's place in the international shipping industry ahead of the widening of the Panama Canal and the anticipated growth in Asian container traffic on the East Coast.
The rail facility was meant to bring Baltimore's limited freight capacity up to par with other East Coast ports by allowing CSX Transportation to stack truck-sized shipping containers two high on trains for more efficient transportation inland. Such double-stacked trains can't head directly out of the port's Seagirt Marine Terminal because they can't clear the Howard Street Tunnel.
- CSX has alternative sites for its intermodal facility [Letter]
- State pulls $30 million from rail facility project in major victory for community activists
- Political opposition rises against CSX rail facility in Morrell Park
- Community meeting about Intermodal CSX facility [Pictures]
Morrell Park, Baltimore, MD, USA
Faced with significant community opposition, the state decided to withdraw more than $30 million in funding for the $90 million rail project.
Economists and other port observers believe the port faces significant losses without the rail facility.
"It leaves the state and the port in a suboptimal position," said Anirban Basu, a Baltimore economist who runs the consulting firm Sage Policy Group. "It means that the state and the port will not be positioned to take complete advantage of the economics being released with the widening of the Panama Canal. And that's not simply important for the port or those involved in distribution, that's relevant to any stakeholder in Maryland's economy."
Daraius Irani, director of the Regional Economics Studies Institute at Towson University and lead author of a 2012 study on the likely impact of the rail facility, said losing it puts Baltimore much further behind than it should be in its preparations for growth in the container market.
"The sense of urgency is now much more accelerated," he said.
Despite having 50-foot channel depths and towering new cranes designed to handle the massive container ships set to move through the widened canal, Irani said, the port of Baltimore desperately needed the rail facility to reduce the cost of transporting cargo containers from the port into market.
"The question becomes, 'Why should we go to Baltimore when we can go to Norfolk?'" said Irani, noting the Virginia port has a 50-foot channel and efficient cranes, but also a rail network far superior to Baltimore's.
Double-stack trains can be assembled on both of the Virginia port's big container terminals.
Without the new facility, Irani's study found, Maryland stands to lose nearly 750 jobs, about $111.5 million in state gross domestic product and $38.8 million in wages annually, and about $5.8 million in annual state and local tax revenues.
Norfolk also could lure away half of the port's current and future containerized cargo, according to the study.
Not building the facility will also increase pollution and contribute to wear and tear and congestion on the state's highways as trucks continue to move cargo that could be transported more safely and efficiently by rail, according to a previous state assessment of the benefits of building the facility.
The state estimated the value of those lost benefits at $250 million.
James T. Smith, the state's transportation secretary, called dropping the plans for the facility in Baltimore's Morrell Park neighborhood "very disappointing for all concerned" in a statement Thursday, but said the state remained "deeply committed to working with all stakeholders to develop a long-term solution."
Rob Doolittle, a CSX spokesman, said Friday that the railroad is committed to "developing alternative solutions to meet future needs" for cargo transport in Baltimore, but that it was "premature to discuss any specifics of what those potential solutions might look like."
James J. White, executive director of the Maryland Port Administration, said Friday that multiple options exist, including using port profits — which otherwise go to the state's Transportation Trust Fund — to subsidize transport costs for shippers at the port, mirroring the benefit of the proposed CSX facility.
"We're probably the only port on the entire East Coast that doesn't have some kind of incentive program," he said. "Virginia has had a rail incentive program for decades."
Currently, shippers pay freight rates to CSX, but also face port fees for loading CSX trains at Seagirt.