For many living in the Baltimore area (at least those far removed from Locust Point or Dundalk), the business of shipping goods over water and rail is a world away. Most folks are not employed as stevedores or pilots, and they wouldn’t know an articulated car from an assigned siding on a railroad, and the only cranes they’ve ever operated are coin-operated and pick up novelties at the local arcade, not 58,000-pound shipping containers. So they may think the future of the Howard Street Tunnel means little to them one way or another.
That would be a big mistake.
This week’s news that CSX Transportation is walking away from a plan to renovate and expand the downtown rail tunnel is a big economic blow — not only to Baltimore but to Maryland. The $425 million proposal might have been the most cost-effective transportation project on the state’s to-do list. Why? Because what was once regarded as a $1 billion-plus pipe dream was more recently demonstrated to be ripe for a far less costly and far more practical public-private partnership that could enable CSX to double-stack shipping containers filled with cargo headed to or from the Helen Delich Bentley Port of Baltimore.
Without double-stacking, Baltimore faces a costly bottleneck for discretionary cargo that can be diverted to competitors like New York and Norfolk, Va. And with that diversion comes an inevitable loss of jobs — perhaps thousands of them, and well-paid jobs to boot. The average longshoreman can earn more than $70,000 per year. Such blue-color opportunities are worth their weight in gold.
In Annapolis, Gov. Larry Hogan thought he had a deal. He’s been talking about the “transformative” project for more than a year. The push has been to gain support from the Trump administration for a $155 million grant from the U.S. Department of Transportation as part of a three-way split to essentially both raise the ceiling and lower the floor in the 120-year-old Howard Street Tunnel to gain the necessary clearance to achieve double-stacking. Now CSX says its new operating plans don’t justify the project, and the grant application has been withdrawn by state officials. Translation? It appears CSX management wants to trim its costs and boost its profit margins. The future of Baltimore’s port means little to such a company.
Maryland’s congressional delegation has already called on CSX CEO E. Hunter Harrison to publicly explain what’s going on, and we would add our voice to that bipartisan chorus. Baltimore’s growing port has been one of the truly bright spots in the local economy. As one of the few ports that can handle super-sized ships and as a leading handler of automobiles, it’s been rated North America’s fourth fastest-growing port with 10 percent annual growth. That momentum should not be compromised because CSX has decided to walk away from a project the company once claimed was a top priority and that state and local officials have so generously supported.
Make no mistake, Maryland has been very good to the Jacksonville, Fla.-based railroad over the years. Mr. Harrison’s so-called “precision railroading” philosophy appears to be mostly about cost-cutting and reducing its workforce and increasing customer complaints. If CSX doesn’t want to serve the port, Maryland may be better off investing in improvements to benefit Norfolk Southern, its competitor, or perhaps in an intermodal facility to transfer goods by truck. And it may also be time for the state to revisit its approach to regulating how CSX operates, from disclosing potentially hazardous cargo to prioritizing passenger rail (MARC) service on its freight lines.
It’s a good sign that Governor Hogan and his transportation secretary find this decision, in the words of Secretary Pete Rahn, “both surprising and incredibly troubling,” but they’ll need to do more than gripe about it. Mr. Hogan’s record on potentially “transformative” investments in Baltimore’s economy hasn’t been a bright spot. He canceled the $2.9 billion Red Line light rail project and voted to halt the $1.5 billion State Center renovation. Progress on reversing the damage of this decision by CSX would help give him something better to show Baltimore-area voters when he asks for their votes next year.
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