The past two months have been quiet ones at Portland’s International Marine Terminal, the state’s only container port. Operations at the city-owned facility were suspended June 29, shortly after the paper mill in Old Town shut down pending bankruptcy negotiations.
The suspension, which forced the port’s other clients to seek alternate shipping routes, demonstrated a key vulnerability: a near total reliance on exports by the pulp and paper industry, which is on the decline. Red Shield Environmental, the owner of the Old Town mill, was the port’s largest customer. When it stopped producing wood pulp, the port’s only scheduled container service-a twice-monthly barge to New York-ceased to be viable overnight.
“The majority of our cargo was from them,” explains Kevin Mack, vice president for business development at Columbia Coastal Transport, the Liberty Corner, New Jersey firm that ran the service. “If the mill comes back, we’ll probably come back,” he added. Red Shield officials have said they could resume operations shortly if bankruptcy proceedings allow, although this had not occurred by press time.
Typically, the barges carried containers of wood pulp to New York, where they were transferred to ocean going ships bound for Europe or Asia. Mack likened it to a commuter flight affording Maine passengers access to connections at a major hub airport.
Even if the mill returns, the International Marine Terminal (IMT) clearly needs a broader customer base if it’s to reach its full potential. Mack says the port’s critical weakness is that incoming barges generally run empty, reflecting the fact that few Maine firms import large parcels of goods from the outside world; those that do move goods from New York and other ports by truck. “Even with the mill working, we have been unable to get people in Maine to support the thing. I’m shocked nobody wants to try it,” he said.
In theory, moving containers by water is a no-brainer. A 2007 study commissioned by the National Waterways Foundation found that, on average, U.S. barges can move a ton of cargo 28 percent further with a gallon of fuel than railroads, 73 percent further than trucks, and with far less pollution.
“You use less fuel, there are less emissions, there’s less congestion on the roads, and there’s less maintenance required on the roads,” says John Henshaw, director of the Maine Port Authority in Augusta. “But cost is the 800-pound gorilla.”
It’s a chicken-or-egg problem: major importers don’t want to use a relatively infrequent and expensive service, but the service won’t get cheaper and more regular without them.
Take L.L. Bean for example. The retail giant imports large numbers of containers from Asia every week, but they continue to do so by rail (from Vancouver, BC to Auburn) or truck (from New York) because for now it’s faster and cheaper and than Columbia’s barges. “We had a number of conversations with them, but from what we were quoted it wasn’t competitive with trucks,” says Tim Cahill, L.L. Bean’s director of transportation and logistics.
All that could change if diesel prices continue to rise. “Right now we’re at that tough stage where we’re getting close to being cost competitive with trucks,” says Portland mayor Ed Suslovic, who argues that the port is going to be an asset to the city in the long term. “We’ve just got to sit tight a little bit.”
Cahill agrees. “The whole idea of short sea shipping between domestic U.S. ports makes a lot of sense and at some point its going to become a viable option as we try to divest ourselves from highway congestion and driver shortages and diesel costs.”
If that happens, smaller customers may come aboard. John Reny, vice president of Reny’s Department Stores, imports containers of Asian goods from time to time, and would be eager to avoid the costs and complications of sending trucks into New York to get them, even if it takes a few extra days. “There are some things you have to rush, but for the most part, if it’s come from overseas you’ve been waiting for 30 or 45 days already,” he says. “If it’s cheaper moving it by water, what’s another five or six days?”
It doesn’t help that state transportation policy remains tightly wedded to highways, according to Christian McNeil of GrowSmart Maine. “State government can’t seem to prioritize what their investments should be in future” -rail and water in his view- “and are instead just operating on the inertia of the past,” he says. “All of our freight is shipped by truck, so we invest in the roads and not ports and rail and so it’s all comically self-fulfilling.”
City of Portland spokesman Nicole Clegg did not respond to repeated requests for comment and an estimate of monthly overhead costs while IMT is idled. It is unclear whether it has been operating at a profit or loss in recent years, although Mayor Suslovic said it had been been “an up and down business” due to the varying fortunes of shippers and pulp and paper mills.
The city did not reveal that the port had been shut down until July 17, 18 days after the fact and one day after this reporter began making inquiries. By contrast, when a Pennsylvania-bound freighter was diverted to Portland to IMT to unload a cargo of wind turbines Aug. 4, a press release was sent out that day.
Until this year, IMT also handled passenger operations for the international ferry to Nova Scotia, which now sails from the city’s newly completed Ocean Gateway Terminal. Part of the original rationale for building the new $21 million facility was to make way for a projected doubling in container traffic between 1998 and 2008. Instead, IMT has seen only modest growth, a trend Henshaw had hoped would be broken this year.
“It’s key that we get the New York container service up and running, but it’s not the only thing we’ll be looking at,” he said, adding that reviving ship service to Halifax would increase shipping options. “Going to a weekly barge service [to New York] would improve the potential for attracting customers. Hopefully we’ll be expanding.”
— Colin Woodard is an award-winning journalist and author of The Lobster Coast, Ocean’s End, and The Republic of Pirates. He lives in Portland and maintains colinwoodard.com