Port of Baltimore: Novel grain transloading facility a win-win

Ports America Chesapeake and Frey partner on a novel grain transloading facility in the Port of Baltimore — a win-win for the supply chain.

In the Port of Baltimore, Ports America Chesapeake (PAC) is largely known for running the port’s Seagirt Marine Terminal (SMT). After all, the PAC facility, on property leased from the Maryland Port Administration (MPA), accounts for a vast majority of the containers moving through the Port of Baltimore. And recently there has been a lot to talk about with the opening of double stack movements from the SMT through the Howard Tunnel following the tunnel’s enlargement and track work. Add in the improvements and new equipment being deployed at Seagirt and the attention to the terminal is understandable.

Nonetheless, a very different (PAC) project — an agricultural export facility located adjacent to the Seagirt container terminal — may become a model for other ports to try to emulate in the near future.

An Idea Takes Shape

April 9th was the shovel-in-the-dirt groundbreaking for the building of a grain export transloading facility at the site adjacent to Seagirt Marine Terminal.

The decision to build the facility came to fruition through a partnership between Frey, an agricultural commodities trader and logistics company that handles over 1.3 million metric tons of grain per-year and Ports America Chesapeake (PAC) which is funding the project on land leased from the Maryland Port Administration (MPA). Frey in turn will operate the facility exclusively for a minimum of six years.

As Mark Schmidt, PAC’s CEO, explained, “Grain has always been a big part of the shipping business…in some capacity, and normally, it’s been a great bulk commodity.” But there was a niche demand for containerized grain movements. However, the containerized movement of grain is fairly unique…and more costly. But containers also allow “more flexibility within the market.”

And as Schmidt explained the idea grew from the experience “years ago from an import demand for transloading organic soybeans. Because of limited supplies of organic grains in the US, the manufacturers of the organic breads, and chicken feed for organic chickens drove the need to have imports of organic grains to supply those needs.”

And there are some very big grain shippers in Maryland such as Mount Airy, Land O’ Lakes and ADM. However, the containerized movement of grain is fairly unique…and more costly. But containers also allow “more flexibility within the market.”

But Schmidt had a novel idea about moving Maryland’s grain exports via container to markets overseas. “We’ve always looked for a route to supplement that with exports to help the export grain shippers in a way that would be efficient for the local market primarily. And about seven years ago, … Mike Adamchak [Frey’s Chief Commercial Officer] and I…started talking…and eventually, we worked on a proposal to start this process.”

And the key to the plan was “capturing the needs of the farmer” moving the grains [soybeans being the “driver” crop] “to sell overseas” shipped via container out of Seagirt Marine Terminal.

As Schmidt outlined, the mechanics of the move were fairly straight forward, “The farm trucks come to our site rather than having to dispatch an empty [truck] over to the Eastern Shore where the primary crops are at and bring it back.” Instead “the farm trucks can come out of the field to right here [transload facility]. We can transload that box and keep less trucks on the road and manage it in a more efficient way for the shipper.”

And by transloading containers directly at the port, as opposed to an offsite container loading facility that requires an additional truck transfer, the new export transloading facility will take significant truck miles off the road, reducing costs and simplifying the supply chain for local farmers.

The New Facility’s Potential

When completed the new facility will operate a full-service grain elevator with the capacity to load more than 200 containers per week. It will feature three storage 20,000 tanks with a combined capacity of 60,000 bushels. The annual export capacity of the facility is listed at 275,000 metric tons. It is anticipated that the exports are destined for Asian markets, especially China.

With construction now underway, the grain export facility is expected “to go live on September 1st” according to Schmidt.

The basic system is that the trucks loaded with grain are unloaded into storage silos which in turn unloads the grain fill into empty containers. The loaded containers are processed and then trucked and processed in the adjacent container terminal for loading on vessels. Schmidt is expecting a “slow ramp up” in the fall and is looking at a 10,000 TEUs to 20,000 TEUs of export boxes. Since the port has far more containers coming inbound than outbound, there is always an issue for ocean carriers to reposition their empties back to heavy side of the haul. And having grain shipments as a match back loaded box is attractive to the ocean carriers in their rebalancing efforts.

In addition to transloading via trucks, the export facility will also be able to handle rail cars. The facility has short line rail connection to both the CSX and NS rail networks, and this will provide access for grain producers and processors from the Midwest.

Adamchak noted the importance of the rail connection in his remarks at the groundbreaking, saying “It’s also a natural next step for Frey as we [connect] producers and processors across North America with global markets, and it unlocks meaningful new export opportunities for feed-product producers in the Midwest through the facility’s direct-from-rail capabilities.”

Schmidt also says the rail link could service imports as it “allows us [an] opportunity… our priorities will be for exports…and if it’s full running exports, great, but if there’s any slack time, or changes in the growing seasons… we can do imports as well. We can do some of those customers we’ve had in the past — if [it isn’t] …interfering with the export process. We can do imports.”

And while the grain transload facility is a major “win” for grain producers in Maryland, Delaware, and Pennsylvania, it is also a significant win for the Port of Baltimore itself as it is a win for the terminal, ocean carriers, truckers and the railroads and indirectly all the stakeholders using the port.