March 13, 2013

Portland's new cargo service set to deliver

With a shipping link to Europe and a railroad link to interior North America, the city is poised again for hub status.

By Tom Bell tbell@pressherald.com
Staff Writer

PORTLAND - A strategic partnership between Iceland's largest steamship line and New England's largest railroad is poised to transform the quiet port of Portland into a hub for freight crossing the North Atlantic.

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A large crane will gear up at the International Marine Terminal in Portland in a few days as Icelandic Steamship Co. prepares to begin direct container service between Portland and Europe. The first Eimskip cargo-carrying ship is scheduled to arrive later this month.

John Patriquin/Staff Photographer

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Starting later this month, container ships from Icelandic Steamship Co., also called Eimskip, will be connecting Portland directly with cities as far north as Murmansk, Russia, 125 miles above the Arctic Circle, and as far south as Rotterdam, Netherlands, Europe's largest port.

Portland will be Eimskip's only U.S. port of call, and officials say the company probably will eventually move its North American corporate offices here from Virginia Beach, Va.

Eimskip will be offering Maine its first direct container service to Europe in 33 years.

Portland has been without a container service in any form for nearly a year, since the New York-based American Feeder Lines suspended operations and closed in April.

The new twice-a-month service will create a more stable supply chain for Maine manufacturers than the coastal barges and container ships that have offered sporadic "feeder" service between Portland and Halifax, Nova Scotia, over the past two decades, said John Henshaw, director of the Maine Port Authority, which played a critical role in upgrading the city-owned International Marine Terminal and recruiting Eimskip.

Pan Am Railways this spring plans to extend its railroad tracks on the Portland waterfront about 1,500 feet to reach the International Marine Terminal, where the Eimskip vessels will dock. When the rail extension is finished, containers will be transported from ships to trains at the same terminal for the first time in the port's history.

Because Eimskip is already serving existing customers, it doesn't need to attract new customers to make the service viable, according to Gylfi Sigfusson, the president and chief executive officer of Eimskip.

When Eimskip starts service in Portland, it will continue serving its current customer base, he said, with 5,000 containers flowing through Portland annually.

NEW INTEREST FROM RAILROAD

In the past, Pan Am Railways, which owns tracks along the western waterfront, has shown little interest in supporting the port's on-again, off-again container business.

But this time, the railroad is aggressively using the new Eimskip service to market itself.

The difference now is that Eimskip has a steady customer base and will be bringing containers that are filled with freight, unlike previous feeder carriers, said Michael Bostwick, senior vice president of marketing and sales at Pan Am Railways.

He said the railroad will be able to find customers to fill containers for the return trip to Europe.

Keeping containers filled on both legs of the trip -- rather than hauling empty containers -- is what keeps costs down and prices competitive, he said.

"They're bringing loads in, and we're helping bring loads out," he said. "We have a broad range of markets that are opening up because of this."

Pan Am serves most of Maine's paper manufacturers, who ship pulp and paper around the world. For products bound for Europe, manufacturers may benefit from using the port of Portland rather than New York or Boston because it will cost less to get their products to Portland, said John Willions, president of the Maine Pulp & Paper Association.

Eimskip specializes in moving freight in the high latitudes of the North Atlantic. With a fleet of 17 vessels, Eimskip delivers frozen fish as well as other products, including Icelandic water, lamb and aluminum to markets in North America. It also takes provisions to Iceland, Greenland and Newfoundland.

CANADIAN PLANS DOVETAIL

Newfoundland is key to the company's business plan in Portland.

Exxon Mobil Corp. in January gave the green light to a $14 billion project to pump oil from a massive oil field off the coast of Newfoundland. Eimskip is the only international carrier serving the island.

(Continued on page 2)

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Additional Photos

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Gylfi Sigfusson, second from left, president and CEO of Eimskip Logistic Services Inc., tours the International Marine Terminal in Portland along with 17 other Eimskip managers on Saturday.

Gregory Rec/Staff Photographer

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Portland’s International Marine Terminal has been upgraded to accommodate container shipping. The new cargo service to Europe could open up new markets for Maine farmers and food producers, particularly for seed potatoes and blueberries.

John Patriquin/Staff Photographer



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