The vehicle workshop at the Masonville Auto Terminal is lab-like in its cleanliness. The touchless carwash is guaranteed not to scratch paint. The electric eye of the computerized security system monitors 55 acres of blacktop 24 hours a day to make certain cars are safe from thieves after they are driven off waiting ships, fitted with accessories and prepared for distribution to dealerships.
There will be only one thing missing when the $20 million state-financed terminal officially opens Thursday: cars.
ATC Logistics of Maryland, the Jacksonville, Fla., company that has signed a 20-year lease with the Maryland Port Administration to operate the facility, has yet to sign a major contract with an automobile manufacturer. But company officials say that isn't unusual in the automotive terminal business, a diverse fraternity of companies that are often militant about their customers' privacy.
"We have several major customers waiting for us to get the keys [to Masonville] so they can talk to us about some contracts," said Howard L. Gable, president and chief operating officer of ATC Logistics. "By the first of the year, we expect to have some major announcements."
Most likely, Gable says, ATC will need the terminal expanded to accommodate the up to 125,000 vehicles the company expects to process annually. If realized, that would represent a more than 30 percent increase over the approximately 400,000 vehicles that port terminals process annually. And some say it would help the port recover some of the revenue and jobs lost when the more lucrative container cargo business began to decline more than 10 years ago.
Not long ago, such optimism was dismissed as misguided by ATC's major competitors in Baltimore. Hobelmann Port Services and Premier Automotive Services criticized the port administration in 1998 for proposing the Masonville project at a time when Baltimore's largest vehicle terminals had excess capacity and limited prospects for new business. Hobelmann, which was operating at 50 percent capacity at the time, hired a lobbyist and an environmental consultant who suggested that soil contamination at Masonville could drive project costs through the roof and cost taxpayers far more than originally projected.
When state officials approved the spending anyway, the two companies vowed to sue the port for subsidizing their competition with public money.
"They didn't want any new blood in here," said Gable, who briefly worked for Premier in the 1990s. "It may be because we didn't go out and get permission from anybody to do this, other than the legislature and the port [administration]."
Ultimately, both the lawsuit and projected cost overruns never materialized. State officials say the project came in at $20 million, as expected. And Hobelmann, now under new management and operating under the trade name Amports, and Premier Automotive are no longer criticizing the port's speculative pursuit of the auto business, which was a key component of a new strategic plan implemented by the port in 1996.
"The port of Baltimore is going to continue to grow dramatically in the roll-on/roll-off and automobile business, and we think at this point that even additional properties will be needed," said Douglas W. Tipton, president and chief executive of Amports.
Michael J. Robinson, vice president and general manager of Premier Automotive, agreed there is reason for moderate optimism in the auto processing business. Robinson, Tipton and ATC's Gable today describe the competition among auto processors in Baltimore as friendly and in many ways even cooperative.
"It's hard to tell, but I would hope there's enough business for all of us to pursue our livelihood and do well," Robinson said of the automobile market.
Industry observers say the reversal is due in part to new management at Amports, which has implemented a new marketing plan and reached out to repair its relationship with the port administration, and partly to record-setting production of automobiles worldwide, which has fueled a healthy vehicle processing business at U.S. ports.
Far from struggling, Amports, a subsidiary of London-based Associated British Ports PLC, is looking for more room to expand its three terminals in Baltimore. The company made news last week when it landed a three-year contract with Ford Motor Co. to handle an additional 33,300 vehicles beginning next year.
The company also recently purchased an additional 18.5 acres to park more cars.
ATC Logistics, which also bid on the Ford contract, thinks it can duplicate that success by trading on the industry experience of its management team and board of directors, who are also the company's investors. For added muscle, Gable brought in longtime friend and Baltimore sports celebrity, Tom Matte, to serve as vice president of customer relations and sales. The one-time Colts running back is a former vice president of marketing for PHH Vehicle Management Services in Hunt Valley and once owned his own electronics firm.
"He let me try on his Super Bowl ring once," Gable joked.
ATC Logistics International Inc. was formed about 10 years ago as a complement to ATC Chairman Harold Shafer's auto trucking business, Centurion Auto Transport. Centurion is one of the largest nonunion truck-away services in the United States.
Like other port operators, ATC has benefited from the consolidation and globalization of the auto manufacturing business. Car makers have increasingly sent manufacturing operations south to Mexico and South America and to developing countries known for low-cost labor. The shift in production has resulted in the need for more ocean transport of vehicles, as well as the port processors to handle them. Port authorities on both coasts of North America have spent millions going after the business.
"To see an established port like Baltimore build a facility like this on spec is not at all unusual or out of line with what we've seen," said Kevin Horn, a research professor with the National Ports and Waterways Institute at Louisiana State University. "If you don't provide the space, then these wannabe ports with 30 feet of water are going to walk up and steal the business."
ATC had about $72 million in revenue last year and operates two vehicle terminals in Mexico; one in the western port of Mazatlan and the other in the eastern port of Altamira. Combined, the two terminals process about 150,000 vehicles annually. The company also has a smaller facility in Tampa, Fla.
The vehicle processing bays, equipment and offices at the Masonville terminal were designed to handle a similar number of vehicles in Baltimore. But some observers say parking space at the terminal will have to nearly double in order to accommodate that many cars and make maximum use of the facilities.
The $20 million spent on Masonville was always intended to be a down payment on a much larger terminal that would grow as business warrants. ATC officials are talking to the port about expanding the terminal's parking space in three 25-acre phases and, ultimately, constructing two berths adjacent to the terminal. Currently, the terminal shares a berth with a Toyota vehicle processing facility.
However, Gable has more immediate concerns than parking. The shipping channel leading to the Masonville and adjacent Fairfield auto terminals is too narrow for some of the larger car-carrying ships to maneuver without assistance from a tug.
James J. White, the port administration's executive director, said state transportation officials will ask the General Assembly next year for money to widen the channel near Masonville. The dredging project would cost an estimated $2 million, relatively modest spending that White says would put the port's southside auto terminals on a level playing field with those at the publicly owned Dundalk Marine Terminal.
But plans to expand Masonville's parking capacity would be expensive. Fully developing the site will cost an estimated $100 million to $150 million, much of it to remove or contain contaminated soil on the site. Persuading state lawmakers to spend the money will be difficult unless ATC or another vehicle processor can secure sufficient contracts with auto manufacturers, White said. ATC's contract with the port gives it first dibs on the land.
"We're not looking real soon to develop that second piece of property unless there's additional business to come," White said. "We need to have some contracts in place so that we're confident that we're spending the taxpayers' money the right way."
Amports' Tipton says the business will be there. "I don't see any reason why the port of Baltimore couldn't easily double the number of automobiles moving through here."