Maryland officials welcomed the blue-hulled ships of the giant Maersk Line back to the port of Baltimore on Wednesday after an absence of nearly two decades.
A delegation led by Lt. Gov. Boyd K. Rutherford gathered under Seagirt Marine Terminal’s four soaring white cranes to hail the renewal of a partnership that is expected to bring a surge in the port’s container ship traffic.
“As the port succeeds, Maryland succeeds, and now Maersk is here and is going to link that success to the success of our state,” said Rutherford, who was filling in for Gov. Larry Hogan, who was undergoing chemotherapy treatment for cancer.
The lieutenant governor was joined by Mayor Stephanie Rawlings-Blake, Maryland Transportation Secretary Pete Rahn, port administrator Jim White and several members of the General Assembly. None of Maersk’s huge container ships was in port for the occasion, but port officials said the line is bringing three ships weekly from the Far East, Northern Europe and the Mediterranean Sea.
The Maryland Port Administration estimated that Maersk, which quietly resumed calling on the port in early February, would bring an added 31,000 container units to the port per year. Maersk, based in Denmark, is the world’s largest shipping line, handling about 15 percent of global container shipments.
Maersk ships once called at Baltimore port terminals more than 120 times a year, but the line’s departure in the late 1990s marked an end to the port’s aspirations to be a major container shipping center as rivals New York and Norfolk grew.
White said the port wants to recapture more of the line’s business.
“We view this as the first step in getting Maersk back,” he said. “We’re hoping to get it all back. We want global services coming through Maryland.”
“This is a homecoming to us,” said David Zimmerman, Maersk’s vice president for North American sales. “We’re delighted to be back.”
The agreement with Maersk represents a takeaway of business from rival ports, White said.
“We know that other ports in close proximity are having congestion problems,” the port director said. “They want that ship moving. We can turn a ship quicker than any port in the U.S.”
The port, which bears the name of former Rep. Helen Delich Bentley, was recognized recently by the Journal of Commerce as the nation’s most efficient.
Maersk’s return also reflects changes in the shipping trade since the line left Baltimore, White said. Container ships are much larger now, carrying three to four times as many containers, making it more economical to make the run up the Chesapeake Bay to unload in a port closer to consumers.
“Now the economy of scale has changed completely,” he said.
That trend would continue, White said, with the expected opening of a widened Panama Canal, which will bring more supersize cargo ships from Asia to the East Coast. With 50-foot deep channels, Baltimore is one of the few ports on the East Coast that can accommodate them.
Maersk’s ties with Baltimore date to 1928, but the relationship has been tumultuous in recent decades.
In 1991, in what then-Gov. William Donald Schaefer called “a historic day for the port of Baltimore,” the state and the Danish company signed a 10-year agreement that was then the longest lease for any shipping line in the port’s history.
The contract came when the Baltimore port was struggling to compete with Norfolk, Va., New York and other rivals, but hopes that Maersk would spur a revitalization were dashed within a few years.
In the mid-1990s, Maersk began cutting back its more than 120 annual calls in Baltimore, prompted in part by the port’s 81/2-hour distance from the open sea.
In January 1995, Maersk consolidated its South American service in Norfolk, cutting its Baltimore traffic by 25 percent. Maersk reinstated that service a few months later, but a pattern of here-today, gone-tomorrow announcements was set in motion that prevailed for years.
After Maersk forged an alliance with Sea-Land Service Inc. in 1996, the shipping line suspended the South American service again. Later that year, it canceled its runs from Baltimore to the Middle East and India.
The moves left Baltimore with 40 Maersk calls a year, and port officials shifted to a strategy that de-emphasized the container business in favor of cargoes such as paper products, construction machinery and automobiles in which it has become a dominant player in recent decades.
The port and Maersk renegotiated their contract in 1997, agreeing to a schedule of about 30 calls a year. Even that reduced business soon petered out. But Maryland’s courtship of Maersk continued.
Maryland officials put together an economic package worth hundreds of millions of dollars in an effort to persuade Maersk to locate a giant cargo terminal at the Dundalk Marine Terminal. Hopes ran high after the shipping line rejected New York’s initial offer. But in the end, Baltimore’s promise of a deeper channel and lower labor costs could not beat its rival’s proximity to the nation’s largest consumer market.
Baltimore port officials renewed their interest in luring Maersk back after forming a public-private partnership with Ports America Chesapeake in 2009 to deepen Seagirt’s berths to accommodate larger container ships. In 2013, Maersk entered a partnership with Mediterranean Shipping Co. that saw its cargo start to return to Baltimore, where MSC is the largest carrier.
Since Maersk left, Baltimore has attained the nation’s No. 1 ranking in several trade categories, including its handling of cars and farm machinery and imports of sugar and aluminum. But until recently its share of the lucrative container market has lagged, and it now ranks 13th in the category among U.S. ports.
White said the new Maersk deal will not move Baltimore far up the list immediately, though it could improve in 2016 and 2017.
“When you’re dealing with containers, you creep your way up the list,” White said.
Rutherford and Rahn presented the deal as an example of how Hogan has made Maryland “open for business.” However, the port’s efforts to lure Maersk back were built largely on initiatives of past leaders.
Crucial to the new container business is the public-private partnership, negotiated under Gov. Martin O’Malley, that expanded Seagirt without having to depend on an estimated $650 million from the state’s then-depleted Transportation Trust Fund.
And Bentley recalled that in 1988 she secured money in Congress to dredge the Chesapeake Bay channel to the 50-foot depth needed by today’s giant ships.
“Your big ships … are going to be coming from China to the U.S., and Baltimore is ready because I got it through,” she said.
Rawlings-Blake, who came directly from an event to protest Hogan’s cancellation of the $2.9 billion Red Line transit project, listened to remarks by representatives of his administration.
When she spoke, her praise of Baltimore’s resilience appeared to carry a double meaning.
“We might have been down, but we’re not out,” she said, declining to answer questions afterward.
This story has been updated to reflect the correct year in which former Rep. Helen Delich Bentley secured dredging funds for Chesapeake Bay channels. The Sun regrets the error.
