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Port of Baltimore's first container ship through expanded Panama Canal carries hope for future

Port of Baltimore's first container ship through expanded Panama Canal carries hope for future
The Evergreen Ever Lambent, a 1,095-foot Taiwanese container ship, became the first vessel to traverse the expanded Panama Canal en route to Baltimore. It is expected to arrive at Seagirt Marine Terminal on Tuesday. (Courtesy of the Panama Canal Aut / HANDOUT)

The arrival of the Ever Lambent, a massive green-hulled container ship, in Baltimore on Tuesday marks the end of a long wait and the beginning of what officials hope is a new era for the state-owned port.

The 1,095-foot Taiwanese cargo ship, which can carry 8,452 20-foot shipping containers, is the first of a new generation of massive container ships to call on the port after transiting the newly expanded Panama Canal, which opened late last month.

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Over the past decade, Panama spent billions widening the canal, and East Coast ports spent hundreds of millions preparing to handle larger ships from Asia. The port of Baltimore already had deep enough channels and acquired four giant new cranes to unload the massive ships, so there's hope the new traffic coming through the Panama Canal will buoy its fortunes.

Baltimore stands to gain more than any other port on the East Coast, said James White, executive director of the Maryland Port Administration.

"I think the tide has turned for us in a positive way," White said.

While Baltimore is the nation's top port for automobiles, the tide of container traffic hasn't been particularly favorable in recent decades. It's seen slow growth but lost market share to East Coast rivals that also serve the Mid-Atlantic and Midwest. Last year, New York handled the equivalent of 6.4 million 20-foot containers and Norfolk moved more than 2.5 million, compared with Baltimore's roughly 800,000.

(Containers — truck-sized metal boxes that can be shifted between ships, trucks and trains — typically come in standard 20- and 40-foot sizes, so they're measured in so-called 20-foot equivalent units.)

Still, the port has several advantages in the cutthroat competition for the larger ships that now will be coming at a faster clip due to the larger canal.

In addition to its 50-foot channel and the new cranes at Seagirt Marine Terminal, Baltimore is consistently ranked among the nation's most efficient ports, and it is much less congested than busier ones such as New York. Including the Midwest, it serves the nation's third-largest group of consumers.

The port's location at the top of the Chesapeake Bay is perceived as a mixed blessing. While the East Coast's farthest inland port is that much closer to markets, ships must spend an extra eight hours to arrive, which means some shipping lines pass it by.

The port also remains hobbled by a bottleneck in its rail connections. While other ports can load trains with containers stacked two-high — the most efficient way for railroads, Baltimore cannot do so because the 120-year-old Howard Street Tunnel isn't tall enough. As a result, most containers shipped though the port serve customers within a day's drive by truck.

Earlier this month, the federal government turned down Maryland's request for $155 million to help the state and the railroad CSX, the tunnel's owner, expand it, opening up more distant destinations. The decision not to fund the project this year was "extremely excruciating and disappointing" for the port, White said.

"The decision didn't hurt us as far as jobs or economic impact," he said. "But it certainly didn't help us."

Despite the rail issue, Baltimore's location and inland infrastructure are among the best in the nation, said Walter Kemmsies, a managing director, economist and chief strategist at JLL Port, Airport & Global Infrastructure.

Getting containers into the port, he said, is generally less of a problem than the next step: moving them through to their destination either by truck or by train. Most U.S. freight moves by truck, and Baltimore's location near Interstate 95 and its less-congested roads present an opportunity for growth, Kemmsies said.

"As far as I can tell, Baltimore could do a lot more," he said.

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Scott Cowan, president of Local 333 of the International Longshoremen's Association in Baltimore, said his members are excited by the potential for growth and additional jobs they expect to come from the new Panama Canal traffic.

"I think it's going to be fantastic for us," Cowan said.

Cowan and the rest of the newly elected union leaders will help draw more business to the port following an 18-month trusteeship, White said.

"It's going to be more of a joint effort, labor and management, going after business for Maryland," he said.

The port administration projects the traffic through the larger canal will add another 2 percent to the port's estimated 4 percent annual growth.

Seagirt, which handles containers at the port, is at about 60 percent capacity, with room to grow, and the port administration has held preliminary talks with Tradepoint Atlantic about the potential of opening another terminal at Sparrows Point, White said.

"I can see us, if we're very successful, which I think we will be, outgrowing Seagirt," White said. "We'll need another container terminal, and Sparrows Point would be an ideal place."

The growth is coming.

Evergreen Line doubled the capacity of the ships in its service between the Far East and the U.S. East Coast by deploying the Ever Lambent and others in its class, which carry twice as many containers as prior ships in the same trade, citing "the business opportunity presented by the expansion of the Canal."

That service calls in Savannah, Ga., Charleston, S.C., Baltimore and New York as it comes up the East Coast, before returning to Asia.

The global shipping industry has been increasing ship sizes for decades. Larger ships are simply more efficient. According to Evergreen, the Ever Lambent uses 40 percent less fuel than would two smaller ships needed to move the same number of containers.

The ships are growing ever more massive, too — the world's largest can now transport more than 20,000 containers and are too big to pass through even the expanded Panama Canal.

What's not yet clear is how those trends of growing volume and larger ships will play out at East Coast ports.

Brent Dibner, president of Dibner Maritime Associates, a maritime management consulting firm, said East Coast ports have duplicated each others' efforts to accommodate the larger ships, which could backfire in the long run.

"How many enormous ports does a nation need if we brought all the trade to the East Coast on a single gargantuan container ship?" he mused. "I think this becomes the test for the survival of ports."

Kemmsies disagreed, contending that the world's largest container vessels aren't designed to call at lower-volume East Coast ports. Most ships on what he called the "East Coast milk run," going from port to port along the coast, range from 8,000- to 12,000-container capacity because larger ones take too long to unload to be economically feasible, he said.

Alliances between many of the major shipping lines also have had a wide ripple effect.

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One such agreement between Maersk and MSC, the world's two biggest shipping lines, led to Maersk shipping 100,000 containers to Baltimore in one year, about an eighth of the port's annual haul, White said.

"We had not seen a Maersk Line container coming on a direct vessel call here probably for a decade," White said. "Maersk was calling Virginia and New York because they didn't want to spend the time on the bay."

Convincing shipping companies to call at the port of Baltimore is something of a sales pitch, White acknowledged. In meetings with company executives, he said he stresses the potential savings and other benefits the port offers.

"You're spending $800 to move it by barge or move it by truck from New York into our consumer group or distribution centers, as opposed to a ship calling directly into Baltimore," White said. "Our consumer group is the third-largest in the country, which gives us a better argument on why you need to call the port of Baltimore as opposed to Virginia or New York."

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