The Working Waterfront
Posted: February 1st, 2010 | BUSINESS, MARINE
Article

Container service returns to Portland

by Erno Bonebakker

In late November stacks of 40-foot long containers started reappearing at the International Marine cargo terminal on Commercial Street in Portland.

On December 1, the barge Columbia Charleston was loading containers of wood pulp bound to the Port of New York and New Jersey for onward transshipment to destinations around the world. The barge service had been suspended since September 2008, but resumed as the global pulp market shifts to favor the sale of U.S. pulp into the world market, helped, in part by a weak dollar. For now, the barge is calling Portland every two weeks.

The hardwood pulp cargo is manufactured at the Old Town Fuel and Fiber mill (formerly Red Shield Environmental, and before that Georgia Pacific), loaded into rail cars and shipped to Merrill Marine Terminal on the Portland waterfront, where it is unitized and stuffed into the oceangoing containers. It is then trucked to the International Marine Terminal (IMT) down the street for loading onto the Columbia Coastal barge.

Old Town Fuel and Fiber is owned by the private equity firm, Patriarch Partners, which is run by Lynn Tilton, described in the Los Angeles Times as a "Rock Star Financier." Tilton's motto is "Dust to Diamonds" describing her practice of acquiring well-known firms on the brink of dissolution and restoring them to profitability.

Tilton has diversified the venerable Old Town mill, developing a partnership with the University of Maine and others to produce ethanol and other fuels and chemicals as by products of the wood pulp business. This project expects to benefit from a $30 million grant from the federal government to develop energy products in Old Town that will complement the mill's "Penobscot Prime Northern Bleached hardwood Kraft Pulp" which is certified by both the Forest Stewardship Council and Sustainable Forestry Initiative.

So far, Old Town is shipping about 2,500 tons in 80 containers every two weeks. Marine interests hope to build the throughput to a level that will justify having the barge calling weekly. With weekly service, there is hope to attract a more diverse range of cargoes moving both to and from the New York area. John Henshaw, Executive Director of the Maine Port Authority, operator of Portland's International Marine Terminal, says that "all of the entities involved in the process are actively soliciting additional cargo for this service"

Container cargo moving through Portland benefits a number of businesses in Maine and New England: The pulp itself provides work for loggers, truckers and millworkers. The railroad carries the pulp from Old Town to Portland where workers at Sprague's Merrill Marine Terminal stuff the containers, truckers move it to the IMT and longshoremen load it onto the barge. Merchant mariners man the tug which tows the barge south while Central National Gottesman markets the pulp around the world.

Containers have moved through Portland since 1991when Hapag-Lloyd, a major German shipping line began a feeder service to and from Halifax. The service, however, was plagued with external problems; it was interrupted twice in recent years when the vessels had financial problems and were immobilized by court action.

The barge service, operated by Columbia Coastal Transport, a New Jersey company that runs barges between a number of ports on the East Coast, has the advantage of being a common carrier that calls at up to six terminals in New York and New Jersey. However, for the past few years, the service has been a victim of the vagaries of the global pulp trade, as Old Town Fuel and Fiber's pulp business provides the base load that justifies the service. The barge has a capacity of 250 TEUs (Twenty foot Equivalent Unit is the industry term for the space occupied by a standard, 20-foot container), so Old Town Fuel and Fiber cargo accounts for only a bit more than half the capacity of the barge.