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Treading Water

Can the Port of Baltimore Survive in Globalized Seas?

Jefferson Jackson Steele
Jefferson Jackson Steele
Jefferson Jackson Steele
Longshoreman Jarvies Page (left) gets an assignment from dispatcher Joe Fontaine at the port hiring hall in Highlandtown
Jefferson Jackson Steele
Water Fight: Port chief James White and International Longshoremen's Association officer Horace Alston (below) support dredging the Chesapeake & Delaware Canal to bring more shipping business to Baltimore. .
Jefferson Jackson Steele
Jefferson Jackson Steele
. . . but U.S. Rep. Wayne Gilchrest says the ecological cost is too high.
Jefferson Jackson Steele

By Michael Corbin | Posted 11/29/2000

Leaving the Atlantic Ocean, rounding Cape Henry on the Virginia coast, it's 155 nautical miles up the Chesapeake Bay and the Patapsco River to the Port of Baltimore. Averaging about 12 knots most of the way, the massive cargo ships--the conveyor belts of global trade--move inexorably toward the city's marine terminals. With good weather and good planning, a ship can make it from ocean to city and back again in 24 hours.

Sixty miles north of Baltimore, the Chesapeake and Delaware Canal slices through Cecil County, connecting Delaware Bay with the upper Chesapeake, saving ships on northerly routes the time and expense of having to sail around the Delmarva Peninsula to reach the port. There, along with their peers arriving from the south, they berth in a series of public and private terminals spreading from Sparrows Point along the harbor line to Locust Point, and across Curtis Bay to Hawkins Point.

The Port of Baltimore is the most inland port on the eastern seaboard of the United States, an important confluence of geography, symbol, and commerce. More than 30 million tons of cargo passed through Baltimore's harbor in 1999, according to the Maryland Port Administration (MPA). It is the source of some 18,000 jobs, MPA reports, accounting for some $300 million in state and local taxes. Yet for most area residents, the port is most often experienced as a nostalgic vista--a maze of smokestacks and cranes taken in from the former working docks of Canton, Fells Point, and the Inner Harbor, a quaint tableau spied from a highway overpass. As far as Baltimore politics and civic affairs are concerned, it registers barely a blip, even as the forces of globalization fundamentally restructure the shipping industry and send port officials scrambling to come up with publicly funded incentives to entice business.

Mergers and consolidation among the corporations that ferry goods through America's ports means fewer shippers bringing that business. Those merged corporations in turn consolidate their business at fewer ports, turning the shipping business into a high-stakes game in which the winners win big and the losers question their future.

Port of Baltimore officials say they are playing to win. Forced into cutthroat competition with other waterfront cities, they and their state and federal overseers seek to make more and more attractive offers to shippers. That has meant a huge public investment in harbor infrastructure. It has meant pressure on workers to make concessions on issues such as pay and hours--pressure that has widened divisions between union and nonunion labor, and within union locals themselves. It has meant increasing ecological stress on regional waterways to make them as friendly as possible to the big ships and big shippers.

"The bigger the customer, the stronger is their clout in obtaining port services," Desmond Tamaki, then a regional director for the Port Authority of New York and New Jersey, said at last year's World Ports Conference in Malaysia. "Concentration of [business] within alliances and mergers--de facto alliances--has magnified their bargaining power. If one line decides to change terminals or leave a port, the effects can be disastrous."

That, MPA Executive Director James White says, is a chance the Port of Baltimore isn't going to take: "We will do whatever we need to do to bring business to Baltimore."

In 1956, the state legislature created the Maryland Port Authority to take over operation of the port from City Hall; coordinating the interests and needs of the city, the state, and the private companies that worked the harbor had grown beyond the management capacity of municipal government. Fifteen years later, the authority was absorbed into the newly created state Department of Transportation and rechristened the Maryland Port Administration. MPA's job, according to its mission statement, is to "aggressively" promote the port and "stimulate the flow of waterborne commerce" through it. While most Baltimoreans live lives far removed from the port--in terms of psychic as well as geographic distance--they have been the beneficiaries of that promotion and stimulation.

According to MPA, the port is responsible for 18,000 "direct jobs," 60 percent of them held by Baltimore City residents. Hundreds of companies that use the port are based in the city--steamship lines, agents, operators, freight forwarders, custom-house brokers, importers, and exporters. City firms accounted for more than 11 million tons of ocean-bound cargo in 1999.

Keeping this economic engine humming is not cheap. Ports such as Baltimore's are home to some of the largest public-works projects in the country. According to the U.S. Maritime Administration, $9.1 billion will be spent in U.S. port development between 1999 and 2003. Just maintaining the depth of the Port of Baltimore's main channel, under constant assault from the deposit of sediment from river and bay currents, costs $13.8 million a year.

Even with all that fuel, the engine does not always hum smoothly. Despite aggressive promotion and public investment, the 1990s saw an acceleration of the global forces that have been buffeting the port for a quarter-century. Baltimore's geography, its inland location, is increasingly a liability; shippers simply didn't want to make the time-consuming trip up the Chesapeake Bay. In 1982, Baltimore was the No. 2 port in the United States for container ships, so named for the modular, metal cargo packages that now dominate the industry. Now it ranks 15th in container traffic, and it has continued to lose market share.

"We're really only a second-tier port now" compared to the New York-New Jersey harbor, Baltimore's fiercest competition for ships, MPA spokesperson Rebecca Barber says.

Last year, the Port of Baltimore battled New York for the business of Copenhagen, Denmark-based Maersk SeaLand, the world's largest container carrier. "Baltimore has been on a 14-year downward spiral, and the paranoia they feel is a heavy weight," a maritime consultant for Booz, Allen, and Hamilton told The Sun at the time. "If they were to get that account [with Maersk SeaLand] it would change everything." New York got the deal.

While losing out on Maersk SeaLand was a blow, port officials say they are undaunted in their efforts to follow through on a strategic plan developed in the mid-'90s. The linchpin of the plan is "targeting the container sector to identify those trades/sectors in which we can better compete." In other words, the port would focus on capturing less lucrative but more readily available niche-cargo businesses for which Baltimore's inland location might be an advantage, such as automobiles and "forest products" (timber, paper) which don't need to be unloaded as soon as possible (i.e., right off the ocean) and which require the extensive storage space sometimes lacking at ocean ports. MPA would accept the port's diminished role, but at the same time would try to maintain its capital- intensive infrastructure--harbors, berths, sophisticated cranes, deep shipping canals--in hopes of eventually luring back business it has lost to other ports.

From the heights of his 20th-floor office in the World Trade Center, James White exudes confidence that the plan is on track. "While the stakes are much higher because of industry trends, Baltimore has assets other ports can't offer," he says with chamber-of-commerce enthusiasm. "Next to Johns Hopkins, we are the state's second-largest producer of jobs. We are positioned well for growth."

Under White's leadership, agreements for niche cargo to be brought to Baltimore are being negotiated and signed. MPA officials trumpet a recent deal with carrier Metsa Serla (forest products, paper) and ongoing negotiations with Wallenius Wilhelmsen (automobiles, farm equipment) as evidence of the plan's success, and they've been busy lobbying the state and federal governments for the millions more needed to maintain and expand port facilities.

From down on the docks, MPA's claims of success look quite different. Attracting the ships means cutting labor costs. The most recent extension of the International Longshoremen's Association's (ILA) "Master Contract," which sets the standards for wages and working conditions at ports from Maine to the Gulf of Mexico, reduced pay for new union members by 45 percent. To keep the carriers coming, longshoremen in Baltimore have accepted a series of concessions to MPA and the shippers--lower pay, fewer guaranteed hours, agreements to work when ships arrive late at night. With more and more nonunion labor working the docks, union leaders are under pressure to extract even more. "I feel that we have given and given and given, and there is no end in sight," says one worker at the Seagirt Marine Terminal in Dundalk, echoing a common sentiment among the rank and file.

"Today's work means fewer hours," says Horace Alston, a vice president of the ILA and president of the union's Baltimore District Council, the body that represents the leadership of all ILA locals working the Baltimore docks. "Automation, automation, automation. Electronics, computers. This is just the truth that many rank and file need to accept."

A 37-year port veteran, Alston has watched this new world unfold firsthand. "I came here by accident," he recalls. "After serving in Korea, I was stationed at Camp Holabird in Dundalk. From there I started working as a bus driver for the old Baltimore Transit Co. One evening, a friend who worked at the docks told me to come down after my shift and I could have some work unloading cargo from a ship. Well, I had two days off from driving the bus each week and I started longshoring on my days off.

"Ended up, I could make more money on those two days than the whole week driving the bus. I've been here ever since. This is what the port meant. I've put two children through college."

Arriving at the port in 1963, Alston had to join ILA Local 858, which represented African-American deep-sea-cargo handlers. Local 829 was nearly all white. In 1974, under court order, it merged into today's Local 333. The same court order also created the union hiring hall, jointly administrated by ILA and the Steamship Trade Association, which represents shippers calling at Baltimore docks. The hiring hall would parcel out work in an atmosphere free of racism and favoritism. There were well-paying jobs here, Alston says, enough to help both white and black working men.

"[The port] was a place where a man could work if he wanted to work regardless of his color," he says. "I became a hatch boss [the leader of a crew of longshoremen unloading cargo] and I didn't care if you were white, black, or green as long as you worked. The port was what this country is all about.

"You know what ILA stands for, don't you?" he says, pausing with a sly look in his eye before offering up the answer: "I love America."

There is not much love in evidence at the hiring hall, though. Every day, dock workers come to this auditorium-size room on Oldham Street in Highlandtown to see what jobs are available. To one side is a caged-off area from which the dispatchers and management representatives determine the day's labor needs. When a ship arrives, a dispatcher from behind the mesh of plywood and wire calls into the hall; men who want the work queue up, those with the most seniority getting first dibs.

The workers in the hall worry about the decreasing number of hours each called jobs brings, how much that will effect wages, and what will be required of them when they get to the docks. The shippers are demanding more job-start times but with fewer total work hours; workers contend they are increasingly asked to do work outside their job descriptions. "Don't go in there," one cautions a visitor to the hall, pointing to the cage. "They'll just tell you lies."

That suspicion cuts both ways. "Be careful what you report these guys saying," David Hartman of the Steamship Trade Association tells the visiting reporter. Hartman helps oversee operations at the hiring hall. "They'll do a lot of grumbling," he says of the workers. But you have to take it with a grain of salt. We have a peaceful labor climate in Baltimore. We've had to change with the rest of the world. But a lot of these guys are angry for the wrong reasons." Hartman points specifically to worker dissatisfaction over the port's wooing of shipper Wallenius Wilhelmsen.

Wallenius Wilhelmsen is the world's largest carrier of automobiles, and the central object of port officials' desire. White beams about the prospective deal, under which the Scandinavian firm--already the port's biggest customer--would consolidate much of its East Coast operations in Baltimore, substantially increasing the amount of cargo arriving here.

"This is probably the best opportunity this state has had for the last three decades," the port chief says. "It is going to be a huge success for workers. You really have to understand how big this is."

Representatives of both the port and the shipping company would not comment on the ongoing negotiations, saying only that they are "moving in the right direction." But it's no secret that the port is pulling out all the stops to land Wallenius. "We need to do everything possible to make sure that business stays here," White told The Sun this past summer, when the deal hit a stumbling block.

That stumbling block was ILA Local 333. In June, union longshoremen voted overwhelmingly to reject Wallenius' demands for specific work-rule concessions from the cargo handlers. The shipper wanted to add more start times and to not be held to the specific job descriptions for workers who come down from the hiring hall.

After some minor contract changes by Wallenius and intense pressure from port officials and its own leadership, the local held another vote. In a May 1 editorial, The Sun implored the cargo handlers to change their minds. "Local 333 is shooting itself in the foot," the paper opined. "The fastest way to shrink jobs on the docks and turn Baltimore into a backwater port is to insist on inflexible work rules that resurrect the old bugaboo about Baltimore's hostile labor climate." The local ignored the daily's advice and rejected the second offer as well.

Douglas Wagner, Local 333 president, is less critical of his charges, blaming the successive no votes less on the contracts themselves than the tension surrounding them. But he nonetheless echoes the view that saving jobs and propelling the port forward required doing what it takes to get Wallenius to sign. "My men had some bad information. There was just a lot of rumor and paranoia," he says. "We want the work. We need this work."

"We need these jobs," Horace Alston agrees, and so did most of the other locals affected by the Wallenius deal. Even though Local 333 is the largest of Baltimore's ILA groups, it alone could not derail the contract--final approval comes from tallying the combined votes of all Baltimore ILA locals, representing not just just cargo-handlers but clerks and checkers, container-repair workers, carpenters, and other dock workers. When all the votes were in, a majority of workers backed the contract, and Wallenius got its concessions.

The vote still sticks in the craw of some of the crew on Oldham Street. "Man, I'll tell you this," says a 30-year member of Local 333 (who, like other rank-and-file workers interviewed for this article, asked that his name not be used). "Our own leadership shoved this down our throats." He shakes his head. "I have kids in college. I have 30 years in. So I'm going to stay, accept it. But I don't know if a young man today can make it down here [on the docks] without getting hustled to death. It's getting to the point where we might as well not be union. That is why more and more of this port is nonunion. This union isn't organizing anybody. They sleep with the MPA."

Local labor leaders also invoke the specter of nonunion workers in explaining why they have sided with management on concessions to shippers.

"I know for a fact that down on Clinton Street they're paying $8 an hour, no benefits," Wagner says. "Clinton Street" is shorthand for nonunion labor--the stretch of Clinton from Canton to Lazaretto Point is home to several stevedoring companies that employ non-ILA longshoremen--and it is invoked by union leaders when they try to explain the concessions they believe they must make at the docks.

"We used to have all this work," Alston says with a pained look. "I drive in and see all that work. It hurts my heart every day to see this work being done by non-ILA. But like I said, the longshoreman has to change."

In the battle to lure business to the Port of Baltimore, asking concessions of longshoremen is just one weapon. To attract and keep customers such as Wallenius Wilhelmsen, port officials and state politicians also promise to make huge investments in shipping facilities. Baltimore's port competes with others up and down the Atlantic coast, and if millions of dollars worth of publicly funded cranes, storage areas, and harbor dredging are not forthcoming in Maryland, shippers will see if Virginia's citizens will build what they need at Norfolk-Hampton Roads. They will see if the taxpayers in South Carolina are willing to improve the Charleston port, or whether New Jersey and Pennsylvania politicians can find funds from the public till for work on the Port of Philadelphia and Camden.

For Wallenius Wilhelmsen, MPA has committed to spending up to $12 million to build a 50- to 60-acre terminal to the company's specifications. That would cover just the first stage of a planned three-stage complex. September saw the opening of the $20 million, state-financed Masonville Auto Facility, which is designed specifically to handle automobile cargo and was built to attract carriers such as Wallenius.

So important is the port considered to be to the state's economic health that major projects to benefit it are rarely subjected to much scrutiny. With so much at stake, funding for the port has become an end unto itself, with millions of tax dollars flowing into the port annually with little public debate and little discussion of the long-term ramifications.

For example, the port signed an agreement last month with the Finnish shipper UPM-Kymmene and Metsa-Serla that will require the state to build a $10 million storage shed for the firms at the South Locust Point Marine Terminal. State officials claim that 239 "direct jobs" will be created because of the deal. But the private stevedoring company that will actually get the shipping line's business, BalTerm, now only employs 50 to 60 people and says it is unsure how many jobs will be created. Further, the lines have signed a five-year lease, during which the projections of how much cargo they will bring could change, and after which they could move to another port--and the citizens of Maryland will still own a $10 million storage shed at South Locust Point.

But, to paraphrase the comments of several people involved in port business, if we do not build it, they might not come. The real-life example that haunts the current discussions of how to maintain port business is Baltimore's failure earlier this year to secure the deal with Maersk SeaLand.

The Danish company presented "the biggest opportunity of a generation for the [P]ort of Baltimore," state Transportation Secretary John Porcari told The Sun in January. "And we are going after it very aggressively." Hundreds of millions of dollars in infrastructure development, labor concessions, and much more were pitched to Maersk. But the shipper spurned Baltimore, deciding to make the Port of New York and New Jersey its principle East Coast hub.

Port leaders here still haven't gotten over it. "We were this close," Alston says, holding his thumb and forefinger barely apart. "So close, so close." White sniffs, "They're not even bringing their ships in there [to New York]. They're bringing them into Halifax [Nova Scotia]. New York's harbor can't accommodate them," he says, referring to the fact that Empire and Garden state pols are still fighting for needed dredging.

The nondeal remains a Rorshach test of sorts for port observers. To Alston, even in failure it represents an admirable commitment to doing what it takes to keep the harbor fiscally healthy: "I'm glad the state of Maryland went overboard to make Baltimore [Maersk SeaLand's] hub."

To Maryland Congressman Wayne Gilchrest, it is a symbol of the way globalization has forced cities and states into a divided-we-fall competition for shipping business, and of the need for a comprehensive U.S. policy on port development to aid all players. "I was over in Amsterdam about a year ago and I asked a representative from Maersk about the competition between New York and Baltimore," Gilchrest says. "He just laughed and said, 'We were never going [to Baltimore].'"

Gilchrest, a Republican who was just elected to his sixth term, represents Maryland's 1st District, which encompasses the Eastern Shore, part of Anne Arundel County, and the southern tip of Baltimore City that includes port facilities. As the chairperson of the House subcommittee that governs maritime transit, he has become one of the loudest and most persistent critics of the Maryland Port Administration and the politicians he says genuflect to it.

"Let me be clear," he says from the depths of a large leather chair in his office in the Rayburn House Office Building. "I'm not trying to shut the port down. I don't mean to demean the port either. Simply put, the port can't be something that it isn't. And while the port is clearly important to Maryland, there is something else out there that you can't easily put a value on, and that's the Chesapeake Bay."

Where the port and the Chesapeake come into conflict for Gilchrest is in a plan to deepen the port's northern channel at the Chesapeake and Delaware Canal from 35 to 40 feet so that larger ships can ply its waters onward to Baltimore. According to the MPA, the project is essential to the port's long-term future: The industry is building bigger and bigger ships, and if the state wants them to keep coming to Baltimore, the canal must be dredged. Gilchrest says the project is a white elephant and that the dumping of dredged material elsewhere in the bay will have dire ecological consequences. "This is a $100 million dollar project that won't do what it says it will," he says. "No Baltimore worker will be helped by it the way the MPA asserts . . . and the cost to the bay is high."

Congress appropriated money to study deepening the C&D Canal in 1988. The Army Corps of Engineers, the agency responsible for both studying the need for port development and carrying out that development, released its initial report on the project in 1996. It concluded that the benefits to the port and the thousands who depend on it for their livelihoods outweighed the cost.

For most Port of Baltimore development projects, that would have been that. But the canal dredging, perhaps because its immediate impact would be environmental as well as fiscal, caught the attention of a group of citizen activists, led by John Williams, a retired engineer from Cecil County. What became the Canal Banks Study Committee did its own analysis of the project, which, according to a Washington Post report, "documented at least a dozen mathematical errors, overoptimistic predictions and other flawed assumptions . . . all exaggerating the canal deepening's benefits to shipping lines or minimizing its costs to taxpayers." The Corps of Engineers, the committee asserted, overestimated the number of ships that use the canal now, the number that would use it if it was deepened, and the time they would save in doing so. MPA's claim that the port's future depended on the dredging, the group claimed, was simply wrong.

Under pressure from Gilchrest, whose Water Resources subcommittee has jurisdiction over the Corps of Engineers, the corps has withdrawn its original report and gone back to re-examine its numbers. Earlier this year, he led an attempt to cut off federal funding for the project, but it failed by a large margin.

White, for his part, acknowledges the first study's "mistakes" but says critics of the project "simply don't understand the business." "Do they have some legitimate environmental concerns?" he asks. "Sure. And my understanding is that the Army Corps of Engineers is working to deal with those concerns. This really is a you-build-it-they-will-come business."

The shipping lines, at least, seem to agree. Some of the port's largest container-carrying customers, including Evergreen Lines and Mediterranean Shipping Co. (USA), have threatened to move business from Baltimore if the canal is not dredged. As for the potential impact on the port's courting of Wallenius Wilhelmsen, the firm officially "doesn't take a position," company spokesperson Andrea Bradley says. But Mary Tritch, Baltimore-harbor manager for the shipper and a player in the negotiations, is less equivocal. "Dredging the C&D Canal is very important to us," she says. "We support the MPA in its efforts."

Gilchrest just shakes his head at supporters of dredging, pointing out that traffic through the C&D Canal is less than one-seventh of that projected to justify the last dredging project, completed in 1975. "Why not just give the money to the longshoremen?" he asks.

"I understand the port's frustrations," Gilchrest continues. "The shipping lines call the shots. They'll continue to pick at the bones [of American ports] like turkey buzzards. And with no U.S. policy to [guide] port development, the states will just go at each other."

Precisely what impact the dredging will have on the bay remains the subject of debate, but the stakes of the debate are high. The U.S. Geological Survey already lists the Chesapeake Bay as an "impaired waterway." The impairment--insufficient dissolved oxygen because of high levels of nutrients, algae blooms, and a decline in the submerged aquatic vegetation that provides homes for crabs and oysters--is due in part to increased loads of nutrient-rich sediment flowing from the bay's headwaters in the Susquehanna River, according to a 1999 Geological Survey study

"What we are talking about is moving hundreds of millions of cubic yards of dredged sediment and disposing of it down the bay," Gilchrest says. "That means building five islands [of dredged material] the size of Hart-Miller," the island at the mouth of the Patapsco River that is now home to Maryland's dredged-material containment facility.

In June, Gov. Parris Glendening nixed the so-called "site 104" plan, which called for dumping dredged sediment in open water near the Bay Bridge, when a Corps of Engineers study revealed that such dumping would case toxic material, including excessive nutrients and trace elements of heavy metals and PCBs, to be released. Port officials are now trying to find other sites for the sediment; if it is dumped on land or used to build islands, there is no dispersal, but that process is much more expensive. In the meantime, according to MPA documents, existing sites for dredged material, including Hart-Miller, Pooles, and Poplar islands and Cox Creek, "will provide eight years of adequate capacity."

To Gilchrest, thinking in terms of the next several years is shortsighted considering the potential for lasting ecological impact. "I'm looking at a 100-year time frame--minimum. The MPA doesn't have a plan to deal with the bay on that time scale. They are supposed to have a 20-year plan. They don't have that. . . .

"Don't misunderstand," he says. "I am a 'free-market' person. But everything has its limit. And the limit in a free market is the management of your resources in a reasonable way so they are not totally exploited--and right now with the bay and this dredging project we are not being reasonable."

Judi Scioli, MPA's director of communications, says Gilchrest is exaggerating the extent of the impact and minimizing the port's response to it. "We are working with the state and the Army Corps of Engineers and any potentially affected communities to find an environmentally appropriate way to deal with dredged material," she says. "Do you really think we want to damage the bay?"

"The C&D Canal was built for commerce. It was built for ships to go through," Horace Alston says with an earnest smile. "Those people up there with waterfront homes who don't want the thing dredged need to understand that."

Both the U.S. House and Senate have passed legislation authorizing funding for the canal-dredging project; the biggest remaining hurdle is the Corps of Engineers' completion of a revised cost-benefit analysis that is supposed to address the questions raised by Gilchrest and the citizen activists. According to the Corps' Philadelphia District, which is overseeing the economic evaluation of the project, the revised report is due out by the end of the year. Port officials say they plan to go forward with the project after that.

"We have to invest in a future," James White says. "You can't just look at the past or even the present numbers, whatever those numbers show."

Scioli offers an allegorical assessment of Baltimore's stake in the port that, for generations, largely sustained it. "It's like the parable of giving someone bread or teaching them to bake bread. Which is better, you know?" she says. "The port is like the tools to make the bread. We are the process by which people can feed themselves."

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