Donald Fry: Lessons from the port’s record year

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By Donald C. Fry

It’s official. The Port of Baltimore had a record year in 2012.

The 9.59 million tons of general cargo handled by the port’s public terminals in 2012 was the most ever, eclipsing the port’s previous record of 8.96 million tons handled in 2008, Governor Martin O’Malley announced this week.

The port’s public marine terminals saw their best year in key cargo commodities, including autos, containers, and roll on/roll off cargo, which includes farm and construction machinery. Meanwhile, the port’s private terminals had a record year for exports of coal, a key bulk commodity, according to data compiled by the Maryland Port Administration.

Confirmation of the port’s record year was not a surprise. All last year, port officials had been reporting a building surge of cargo business. But it validates a significant development on Baltimore’s waterfront, where more than 14,000 jobs are directly generated by the port and 108,000 jobs in the state are linked to it.

Operating in an extremely competitive business environment, Maryland’s port was able to strengthen its business during a severe recession and has emerged as a post-recession driver of economic growth in the Baltimore region and the state.

The 652,000 cars that came across Baltimore docks in 2012 is the largest volume for auto cargo among all U.S. ports. Baltimore is the nation’s top port for handling farm and construction machinery, imported forest products, imported sugar, imported aluminum and imported gypsum. Baltimore ranks second in the U.S. for exported coal and for imported iron ore.

Meanwhile, the port is experiencing strong growth in container cargo handled by its public terminals where container cargo business increased by almost 8 percent in 2012.

Overall, among 360 U.S ports, Baltimore ranks ninth for total dollar value of cargo and 11th for cargo tonnage.

This kind of success amid difficult economic times did not happen by accident. The story of the Port of Baltimore’s surge is one of smart strategy, recognition of competitive opportunities, and infrastructure investment for future growth.

The result? Today our port finds itself in the right place at the right time, having positioned itself to capture a significant portion of new business headed toward the east coast.

The extraordinary breadth of economic activity on Baltimore’s waterfront was detailed in a special section on the port published last week by The Daily Record, partnering with the Greater Baltimore Committee.

For policy-makers in Annapolis, the port’s surge underscores two major issues that relate directly to keeping Maryland competitive as a business location.

First is the value of public-private partnerships. Two in particular are key factors in the port’s future – the partnership between Ports America and the state at Seagirt Marine Terminal, and the public-private funding to develop CSX’s intermodal facility in South Baltimore to efficiently connect container cargo to the railroad’s double-stack National Gateway to inland markets.

The Ports America partnership has enabled private funding for critical capital improvements to the Seagirt facility. Baltimore is one of only two ports able to accommodate super-sized container ships that will begin calling on the east coast after 2014, when the Panama Canal widening is completed.

At the CSX facility, cargo containers trucked to it from East Baltimore terminals will be transferred to double-stacked rail cars headed for the Midwest. The facility will address a chronic bottleneck hindering the port’s competitiveness – the more than 100-year-old Howard Street tunnel, which is too small for double-stacked rail cars.

These projects demonstrate the significant value of well-thought-out public-private partnerships as lawmakers work to pass a uniform, efficient policy for developing such partnerships to more readily leverage private investment for state infrastructure needs.

Finally, the port’s surge serves to call attention to a basic tenet of transportation policy – infrastructure has great value as a competitive asset.

The impact of infrastructure investment on economic vitality and competitiveness seems to have been lost in recent years as lawmakers have consistently resisted action on strengthening funding for Maryland’s transportation infrastructure.

That’s why more than 50 economic development experts and business leaders who participated in the Greater Baltimore Committee’s “Competitive Edge” initiative included superior and well-funded transportation infrastructure among eight core pillars for economic growth and job creation.

The Port Administration is an entrepreneurial agency that has grown adept at managing available fiscal resources to nurture port growth.

But it is an agency of the Maryland Department of Transportation (MDOT) and, as such, relies heavily on Maryland's Transportation Trust Fund. Due to stagnating revenues to the fund, the Port Administration is saddled with the same fiscal challenges faced by the State Highway Administration, the Maryland Transit Administration and other MDOT agencies.

Like the highway and transit agencies, the Port Administration's current capital budget is severely constrained. Almost two-thirds of it is earmarked for maintenance and dredging-related improvements. Not much is left for other capital needs.

Frankly, without the public-private Seagirt partnership with Ports America, funding for capital improvements to position our port for the post-Panamax super ships would not have been available.

Lawmakers in Annapolis and the public tend to relate transportation funding to roads, bridges and transit – but not the enterprise transportation assets such as the port and airport that generate economic impact. In Maryland, our Transportation Trust Fund provides financing to all those transportation modes.

The port’s current surge is a transportation economic impact worth noting because it was generated by just a portion of the infrastructure that has enabled Maryland throughout history to take competitive advantage of its mid-Atlantic location and its inland port.

The reality is Baltimore's port, and Maryland’s supporting statewide transportation infrastructure in the middle of the eastern seaboard, constitute the heart of our state's economic growth.

Lawmakers should keep that in mind as they work this session to craft a solution to the state’s escalating transportation funding crisis.

Donald C. Fry is president and CEO of the Greater Baltimore Committee and a member of the Maryland Port Commission. He is a regular contributor to Center Maryland.

Recent Center Maryland columns by Donald C. Fry:

Latest business climate rankings for Maryland range from 5th to 41st

Workforce wellness survey: high enthusiasm, spotty evaluation

Brainstorming in search of transportation funding consensus

It’s complicated, but gas pipeline replacement proposal worth a look

Proposed budget frames state’s fiscal contrasts

Transportation funding: will it be a genuine priority in Annapolis this year?
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Donald C. Fry has been the president and CEO of the Greater Baltimore Committee (GBC), the central Maryland region's most prominent organization of business and civic leaders, since November 2002.

Under Don’s leadership, the GBC is recognized as a knowledgeable and highly credible business voice in the Baltimore region, Annapolis and Washington, D.C. on policy issues and competitive challenges facing Maryland. Its mission is to apply private-sector leadership to strengthening the business climate and quality of life in the region and state.

Fry served as GBC executive vice president from 1999 to 2002. From 1980 to 1999 Fry was engaged in a private law practice in Harford County. During this time he also served in the Maryland General Assembly. He is one of only a handful of legislators to have served on each of the major budget committees of the General Assembly.

Serving in the Senate of Maryland from 1997 to 1998, Fry was a member of the Budget and Taxation Committee. As a member of the House of Delegates from 1991 to 1997 Fry served on the Ways and Means Committee and on the Appropriations Committee.

Fry is a 1979 graduate of the University of Baltimore School of Law. He earned a B.S. in political science from Frostburg State College.