At a lavish opening ceremony in 1990, Seagirt Marine Terminal was modestly hailed as the "the greatest facility in the world," a state-of-the-art container terminal that would restore the port of Baltimore to its former glory as the gateway to the Midwest.
One of the most technologically advanced terminals anywhere, Seagirt has been pivotal to the resurgence of the once beleaguered port. In an era when ports are competing furiously for fewer and fewer ships, it is the state's Camden Yards on the Patapsco, an impressive signal to the world's shippers that Maryland wants their business.
But the showcase Seagirt has gotten off to a slow start. In its first five years of operation, Seagirt is projected to lose a total of $2.5 million. The terminal -- creatively financed with money collected on the state's toll roads and bridges -- could require decades to recoup its $200 million in construction costs.
Its goal of luring new shipping lines to Baltimore has also been elusive. Since it opened, Seagirt has attracted only one new steamship line. The remainder of its tenants merely shifted their longtime port operations from Dundalk Marine Terminal next door to Seagirt.
"As far as I'm concerned, it was a $300 million white elephant that they built and shoved traffic out of Dundalk," said Jake Wade, former general manager of Cross Ocean Shipping Co. Inc. which serves the Dundalk terminal.
But, at a time when the port was losing money, hemorrhaging cargo to Norfolk and fighting thorny labor problems, state officials saw Seagirt as a critical marketing tool, an emblem of the state's commitment to the port's revival.
Any shortcomings thus far pale in comparison, they contend, to its vast contribution to the port's turnaround. The overall increase in cargo -- even as traffic wanes at other East Coast ports -- is a clear measure of its success, they say.
"If you understand why we did it and why we did it the way we did it, it's been a great success," said Maryland Transportation -- Secretary O. James Lighthizer.
Conceived in the late 1970s -- a brainchild of William Donald Schaefer as mayor of Baltimore -- Seagirt is a 265-acre facility that carries out the first basic rule of terminals: move cargo quickly.
Its seven, 230-foot high cranes hoist multi-ton boxes, known as containers, on and off ships at the pace of three dozen an hour, or 10 more than regular cranes. Its computerized gate facility acts like a toll plaza, speeding the movement of trucks dropping off and picking up containers. And its dockside rail terminal, known as the Intermodal Container Transfer Facility, permits the direct flow of containers from the ships to the trains.
While many facilities in the world perform one of those functions well, few do all three.
Seagirt opened the first fully automated gate system at the port, which became a model for the state's other marine terminals.
In a port once renowned for its labor problems, Seagirt was the first terminal where longshoremen worked through lunch hour. Checkers, who for decades had laboriously monitored cargo with pencil and paper, switched to sophisticated computers, moving 1,000 trucks a day through the terminal's eight lanes.
"The speed with which they move trucks in and out is second to none," said Edwin F. Hale, president of Hale Intermodal Transport, a trucking and barge company that is the port's largest private employer.
A decade ago, "second to none" was not exactly the port of Baltimore's reputation. And that meant the state needed to take a gamble, Mr. Lighthizer said.
"Seagirt is no different than Pier F [the planned international terminal at Baltimore-Washington International Airport] or an extra lane on 95," he said. "Our job is to provide a state-of-the-art transportation system that benefits Maryland."
For steamship lines -- who lease berths at one of Baltimore's five public terminals -- Seagirt is an exclusive facility, designed for major containership lines that handle large volumes of cargo.
In the midst of a worldwide shipping recession, luring them here was a challenge. Indeed, if ever there were a "field of dreams" -- a build-it-and-they-will-come project -- it was Seagirt.
Seagirt got off to an abysmal start. A bitter dispute erupted with longshoremen over jobs at the nearby rail yard. Steamship lines were reluctant to sign leases. A CSX Corp. official in late 1988 declared Seagirt "a laughingstock."
Just months before it was to open, the state faced the embarrassing prospect of a glittering terminal -- with no steamship lines signed up.
Ultimately, its first tenants -- Evergreen Marine and Mediterranean Shipping -- simply shifted their operations a few hundred yards down the Patapsco River from the 574-acre Dundalk Marine Terminal to the more modern, efficient Seagirt. Its next three shipping lines were also longtime customers at the port.
Until the arrival this spring of the Chinese shipping line Cosco, Seagirt had not landed a single new shipping line for the port of Baltimore.
Between 1991, Seagirt's first full year of operation, and 1994, cargo handled there increased from 1.1 million tons to 1.4 million tons in 1992 and 1993, or roughly one-fourth of all the port's business. This year, port officials expect it to increase significantly.
State officials and others insist that Seagirt, despite its failure to attract many new lines, has prompted carriers to boost the amount of cargo they bring to Baltimore.
"The turnaround of the port could be tracked back to the time Seagirt was opened," says Mr. Hale. "Had it not been done, Baltimore would be in a tough position."
Cargo is up
Overall, cargo handled through the port of Baltimore has steadily increased during the past two years. "Without Seagirt, there wouldn't have been an increase at all. It would have been a dramatic decrease," said Michael P. Angelos, executive director of the Maryland Port Administration who was responsible for opening the terminal.
There is, however, no firm way to calculate what the volume of cargo at the port would be if Seagirt had not been built.
"Only a portion of our increase is because of Seagirt," said David Thomas, operations manager of Evergreen America Corp., the U.S. agent for Evergreen Marine. "But if Seagirt weren't there, our future at the port might have been different."
With its high-speed cranes, Seagirt has saved Evergreen money, he said, noting that it costs roughly $2,000 an hour to pay labor for unloading and loading containers.
Even though only a half-dozen ships call there every week, the amount of cargo frequently fills the storage yard with stacked containers awaiting pickup or shipment.
"We're probably going to wish we'd built Seagirt bigger," Mr. Hale said.
Constructed on top of 3 million cubic feet of muck dredged from the harbor bottom to build Fort McHenry tunnel, Seagirt was a classic two-fer: it solved a disposal problem for contaminated waste and the federal government paid for the site preparation.
From the beginning, the state did handstands to make Seagirt possible.
It bought controlling interest in a little railroad company to keep access to Seagirt open. And it built an on-site rail yard to lure CSX from Port Covington to Seagirt. That crucial strategic move -- bringing rail to the water -- enhanced Baltimore's natural
geographic advantage in moving cargo to the Midwest even more quickly.
With the state's transportation budget stretched thin, Seagirt couldn't compete for money with more politically visible projects like roads and bridges.
So state transportation officials, led by Former Secretary William K. Hellmann, a disciple of Mr. Schaefer during his days as Baltimore's mayor, came up with a financing plan that put Seagirt in a league of its own.
Creative financing
To build the terminal, state officials turned to the state's Transportation Authority for money that it collects on Maryland's toll roads and bridges. It was the first time the authority had provided permanent financing for a nontoll project.
Once completed, the authority-owned terminal was leased back to the port, with Seagirt to make interest-free annual payments.
"It was artfully funded," Mr. Lighthizer boasts. "I don't think there's another state transportation department in the country that could pull that off."
According to state figures, Seagirt will generate $35.4 million in revenues from its inception through fiscal 1995, ending June 30. Over the same period, it will spend $37.9 million, resulting in a net loss of $2.5 million.
Of its $200 million cost, Seagirt has made $20.6 million in lease payments, a fraction of the repayment costs that would have been necessary had the terminal been built with revenue bonds, like most transportation projects.
"You can't pay back revenues you're not creating," said Mr. Angelos. "To get more revenue, you have to raise rates [to the shipping lines] and that would drive traffic away to Norfolk." As a result, Seagirt -- built with nickels and dimes collected on toll roads -- has been subsidized by other state transportation revenues, such as gasoline taxes. But economic spinoffs in jobs -- and the marketing value of Seagirt -- has more than justified the investment.
"When Marylanders drive through the Harbor Tunnel or up [95], they're paying for Seagirt," said Del. Timothy F. Maloney, a Prince George's County Democrat and chairman of the House subcommittee which oversees the port. "But it's been a lifesaver for the port."
While difficult to quantify, Seagirt's payback shows up in increased work for longshoremen and other businesses in the port, state officials and others say.
"There were benefits far beyond what you would have with light rail or another toll facility," said Daniel F. McMullen III, a member of the Transportation Authority since 1975. "I don't know of another project where this money could have been invested any better."
And, he says, Seagirt -- the crown jewel of the port -- should someday fulfill its promise.
"Hopefully, through the port's marketing efforts and good efficient management," Mr. McMullen said, "it will finally come around."