Port of Baltimore benefits from distribution surge

January 2015 'Moguls'

The growing number of distribution facilities in Maryland is, in part, a result of port shipping expanding its services to include cargo logistics in the Port of Baltimore, according to port and shipping industry executives.

“We’ve seen distribution really take off in Maryland, up and down the I-95 corridor,” said Bayard Hogans, General Manager – Baltimore for Ports America Chesapeake, LLC. “Having transparency with the shippers has really been key for us, building these relationships, having them confident that Baltimore is a solid, efficient gateway that they can bring their products into. We’ve had shippers migrate from other ports with distribution to Baltimore because of efficiency.

Hogans was one of three port executives who offered insights into the port industry at the Greater Baltimore Committee’s ‘Meet the Moguls’ speaker series event on January 13. He was joined by Michael S. Derby, General Manager East Coast and Environmental Affairs for Wallenius Wilhelmsen Logistics, and James White, Executive Director for Maryland Port Administration.

“Larger consumer markets like New York and L.A. are always going to be driven by the population base, but in other ports, definitely the distribution in and around the ports drives the activity, drives jobs,” Hogans said. “There’s a lot of large distribution in and around Baltimore and I think people probably just aren’t aware is here.”

Mega corporations, including Costco, IKEA, Starbucks and Toys“R”Us, have large distributions in the I-95 corridor, in and around the Greater Baltimore region, Hogans said.

“That’s what’s driving a lot of the port business,” he said.

The port’s processing facilities “anchor a lot of these customers,” said Derby, noting the “value added services” that occur at the Port of Baltimore would likely surprise most people.

“Let’s say you order a sports package on your new Subaru,” he said. “We’ll be the ones converting that basic model to the sports model by installing the spoiler and changing the rims. It’s a lot easier for the manufacturer to train a company like us to do it for all of the dealers than to try to train all of the dealers to do it to the same quality level. You really add a lot of value there.”

White said the port’s “game plan” has and continues to be long-term contracts and relationships with customers.

One of its long-term contracts is with the luxury car retailer Mercedes-Benz, White said. The Port of Baltimore is one of its two East Coast ports.

“We supply all the cars up into New England, as far as south as the Carolinas and as far west as Ohio,” he said. “All of those cars come through our port and are distributed from here.”

However, the port needs additional land in order to grow its automobile business, White said.

It is also important that the business community understands the port, Hogans said.

“The port has been a big unknown for years to the business community,” he said, noting business leaders need to recognize what goes on there, it’s impact to the state and the economy, the distribution that occurs up and down the I-95 corridor and the jobs that it brings to the region.

“Without a doubt, the Port of Baltimore is one of the great economic engines of the State of Maryland,” said Donald C. Fry, president and CEO of the GBC and a member of the Maryland Port Commission. “Many people don’t even recognize it as part of the Maryland Department of Transportation. The transportation fund increases that we argued for as members of the GBC over the years do help serve the Port of Baltimore and the maritime industry in the state.

“The average port job pays about 7 percent better than the average Maryland salary and about 40,000 jobs are generated from port activity,” Fry said. “On top of that there’s about 68,000 other jobs in Maryland that are related to activities of the port.”

In total, more than 108,000 jobs are linked to the port, Fry said.

The ‘Meet the Moguls’ series includes networking, discussion, Q&A and how the GBC can focus on nurturing industry growth.

Moderated by GBC President and CEO Donald C. Fry, each ‘Meet the Moguls’ event highlights a different industry group and aims to highlight job creation and investment that various industry sectors bring to the region, industry trends in the next 12 to 18 months and issues or concerns the ‘moguls’ are experiencing or foresee in the future.

The next ‘Meet the Moguls’ event will be announced.

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