An interview with the Maryland Port Administration
The following transcript is the second part of our interview with with two officials from the Maryland Port Administration – Donovan Murray, General Manager, Intermodal/Trade Development and Richard Scher, Director of Communications. It has been edited for length and clarity. Miss the first part of this blog series? Read it here.
DTJ: There’s obviously a quite a significant public/private partnership at the port, particularly at the Seagirt Marine Terminal. What specific benefits have been realized through MPA’s relationship with Ports America Chesapeake in that case?
Mr. Murray: I guess you could say there are a few different benefits. One is the obvious physical benefit. I think many folks in the area remember almost four years ago, when four super-post-Panamax cranes were making their way up the Chesapeake Bay, shipped in from China on a special ZPMC vessel designed to carry them underneath both the Bay Bridge and the Key Bridge for their final assembly point at Seagirt Marine Terminal.
Our public/private partnership with Ports America is an industry first in the maritime space. Those cranes and the berth were the initial investment, about $100 million worth of what is a $1.4 billion commitment under the lease terms from Ports America Chesapeake. There’s the physical infrastructure component of getting us ready to handle super-post-Panamax vessels up to 14,000 TEUs here in Baltimore.
What it also did for the port, though, is elevate us in stature to be able to compete for that cargo. Currently on the East Coast, New York, Norfolk and Miami are the only three other ports that have air draft, water draft and crane infrastructure to handle vessels of 14,000 TEUs. As we get deeper into the discussion, we’ll talk a little bit about the rapidly changing global landscape of ocean shipping and why it’s important for those ships to handle as much cargo as efficiently as they can in ports that fit their distribution network.
DTJ: I think that’s probably a good segue into asking essentially, where does the port fit into the flow of international trade?
Mr. Murray: So Baltimore, unlike many other ports, is a very diverse port, when you look at our commodity mix. In terms of valuation of cargo, we’re number nine in the nation, in terms of tonnage, we are number 13, but that does not come from just one or two commodity slices.
Baltimore has been a market leader, and held the position for many years as number one in the nation for autos and ro-ro cargo. We’re also very strong in several bulk commodities such as sugar, coal, gypsum, aluminum, which I think really speaks to our earlier discussion points on the collaborative and healthy mix of public and private terminals here in Baltimore.
DTJ: To elaborate on that specifically, there are exports heading out of the port – what are they and where are they headed to?
Mr. Murray: So as part of that commodity mix, Baltimore will export about as many automobiles and pieces of high-end heavy cargo as it imports. You can no longer look at the name plate on a car or the manufacturer and categorically say that’s an import or an export. We will export Toyota out of the country and we’ll import Ford into the country, which again speaks to the nature of the evolving global trade that we’re involved in.
We import a tremendous amount of paper products, both finished rolled paper and pulp. On the export side – again in addition to autos and the high-end heavy cargo – for containers, containers are more commodity driven.
So out of the United States at large, really the three highest commodities you’ll see in the container world are waste paper, logs and lumber, and metal scrap. While we do have trading partners to really every major continent in the world, most of the containerized exports are headed to Asia as those raw materials, and turned around into finished goods that the country will then import.
Europe will see a little more mix of the construction equipment, the tractors, the automobiles again, and that high-end heavy cargo.
DTJ: The Baltimore Sun reported recently that the port of Baltimore set a new record in general cargo handled in 2016 on the public side. Is that record primarily due to increased volume coming through the Panama Canal?
Mr. Murray: It’s really supported by several different things. Panama Canal growth is certainly one of them, although for the last 3+ years, Baltimore has been receiving those same size vessels through the Suez Canal.
But in addition to that, we just spoke about Baltimore’s diverse port, the different types of cargo that we handle. It may be a crude analogy, similar to your retirement plan or your stock portfolio, you don’t want to overweigh heavy in one sector. You want to have good diversity, which I think the steady growth that we have experienced here speaks to that point of containers, autos, ro-ro, break bulk, project cargo, that we’re able to capitalize as a port.
Baltimore also sits in the middle of the nation’s third wealthiest consumer market. So ports like New York and LA Long Beach, which are ranked at number one and number two respectively, have the good fortune of port locations, very large terminal facilities and very large consumer markets. Well again, Baltimore is sitting in the number three wealthiest consumer market in the nation. More shippers are starting to realize that advantage of getting goods to the ultimate destination where consumers will purchase them, and reducing the inland transportation costs associated with longer movements coming into other gateways.
So it’s really a combination of factors, that when you look at our trend lines, it’s not beholden to one specific commodity, it’s not beholden to on specific ocean carrier, it’s not beholden to one specific event. It’s really been an accumulation of several factors. For the last seven years, the port has seen really steady growth, which speaks to our diversity.