When CSX Corp. Chairman John W. Snow and Gov. Parris N. Glendening lunch at the Mansion today, they'll confront at least one issue that highlights the underlying tension between the port and the state's largest railroad.
Faced with constant competition from other East Coast ports, state officials want the ability to stack 9-foot, 6-inch high containers, two-high on trains after they're unloaded from ships. But the price tag for raising railroad tunnels to accommodate the larger, double-stacked boxes is estimated at $40 million.
The state wants CSX to share the expense, but the cost-cutting railroad is not convinced that the benefits justify any expenditure. And the notion that CSX would pick up a big chunk of the cost -- as Conrail recently did in Pennsylvania -- is unfathomable.
"That's not going to happen," M. McNeil Porter, president of CSX Intermodal, said this week. "It's simply not cost effective."
Currently, CSX is double stacking 8-foot, 6-inch high containers. But increasingly, steamship lines are forming alliances among themselves and shifting to the larger boxes for international and domestic shipments.
To bring the larger, double-stacked trains to and from the port, tunnels in Baltimore along Howard Street and in Harpers Ferry, W.Va., would have to be raised.
"The governor is sold on the economic development side of this and the need for the port to be competitive," said Fred Puddester, Mr. Glendening's deputy chief of staff.
Two weeks ago, the port of Philadelphia began double stacking larger containers for the first time. Conrail paid more than $64 million of the total $97 million cost for reconstructing clearances, with the state picking up the remaining tab.
State officials here have conducted preliminary talks with Conrail about sharing some of the estimated $10 million costs associated largely with reconstructing the Susquehanna River bridge along Conrail's rail lines.
Double stacking is only one issue that threatens to put the port of Baltimore at a disadvantage in its fierce competition for cargo with Philadelphia and Norfolk, Va., the headquarter cities for Conrail and Norfolk Southern railroads.
Critics say rail rates offered by CSX to shippers have never been competitive with those offered by Norfolk Southern out of Norfolk, thus offsetting Baltimore's natural advantage of being closer to customers in the Midwest.
"I just wish that CSX had demonstrated the commitment to the port of Baltimore that Norfolk Southern has to Norfolk," said former Maryland congresswoman Helen Delich Bentley, now a consultant to the port of Baltimore. "They never have, and it's unfortunate."
In 1992, CSX shifted its corporate railroad headquarters to Jacksonville, Fla. Next year, it plans to move the CSX Intermodal headquarters from Hunt Valley to Jacksonville, ending all corporate presence here.
But CSX insists that its contracts with shippers are competitive and that it shows Baltimore no favoritism largely because it serves other ports like Savannah, Ga. Officials also strongly deny that the company lacks commitment to Baltimore.
"That's an old issue," Mr. Snow, chairman and chief executive officer of CSX Corp., which oversees both the railroad and the intermodal companies, said this week. He cited CSX's 15-year lease at Baltimore's modern Seagirt Marine Terminal, where the company operates an on-dock rail facility to move containers and trailers.
FTC "There wouldn't be a Seagirt without CSX," he said.
But with competition among ports intensifying, the railroad's role in making the port competitive is likely to be a continuing sore spot here.
Today's meeting with the governor, Mr. Snow and Maryland Transportation Secretary David L. Winstead is their first formal session. But port officials have been lobbying CSX for several years to share in the cost of double stacking. The state recently hired an independent consultant to evaluate the economic impact of double stacking.