By Karen E. Thuermer
Without a doubt, UPM Kymmene is a major customer to the Port of Baltimore, particularly in the breakbulk category. UPM Kymmene, one of the world’s leading forest products companies, is so important that on July 23, Maryland Secretary of Transportation Robert L. Flanagan announced that the state is offering UPM Kymmene a new three-year contract extension between the Port of Baltimore and the Finnish company.
To try to snag the deal, the Maryland Port Administration promises to construct a new warehouse 300,000 square feet in space at a price tag of $16 million. This is in addition to the current 556,000 square foot warehouse the company is utilizing, thereby bringing UPM Kymmene’s available warehouse space to over 800,000 square feet.
“The funding for the project is through the Maryland Department of Transportation,” reports J.B. Hanson, MDOT spokesman.
MDOT is committed to completing the project next year.
Maryland Port Administration Executive Direct James J. White admits that that the cost of constructing the warehouse is high, but explains that this is because the construction is not your typical bricks and mortar.
“The warehouse is a clear span building with no pillars inside,” he says.
Not only does this make the facility more flexible for paper storage, a forklift operator can easily drive his equipment throughout the building and not worry about running into a column and damage the paper.
“The ground also has to be worked in order to accommodate the special kind of construction,” Hanson adds. “Plus paper is so delicate that the flooring cannot be standard and cannot be subject to dampness.”
Humidity is a particular big concern given the fact the warehouse is at a seaport.
In return, negotiations are underway that UPM Kymmene will guarantee the port that it will import more than half a million tons of forest products from its home country of Finland per year for the next five years. In addition, the agreement would call for the use of 556,822 square feet of existing covered shed space.
UPM Kymmene were unavailable to comment on the project, however, since the company has not yet signed the contract.
Rebecca Theim, spokesperson for UPM Kymmene, points out that the Port of Baltimore remains one of the major ports of entry for the company for the North American market.
“A primary reason is its proximity to the New York market, which is the media hub of the United States,” Theim says.
Most shipments leaving the port travel primarily via rail, although some truck is used.
The warehouse is not the first deal in which the state and UPM Kymmene has negotiated. In late 2000, the state announced a five-year deal with UPM Kymmene and partner Mesta-Serla, also a large company in Finland and Europe’s largest fine paper producer, to move 550,000 tons of paper products through the Port of Baltimore. UPM Kymmene then committed to shipping 440,000 tons per year and Metsa-Serla, 110,000 tons. That particular deal consolidated all of UPM Kymmene’s tonnage in Baltimore and made it one of the port’s top five importers.
“The one port concept enabled UPM Kymmene to meet the needs of our customers, and support our partner Spliethoff’s development of third-party business for the benefit of the Port of Maryland,” Jussi Sarvikas, vice president of Logistics, UPM Kymmene said then. At the time, UPM Kymmene had split its US imports between the Port of Philadelphia and the Port of Baltimore.
Currently, UPM Kymmene moves its paper products through the North Locust and South Locust Terminals. But that will soon change. The new warehouse that is being constructed will be situated at the South Locust Terminals.
“At that point, all operations will be located there,” says Hanson.
UPM Kymmene focuses its business on paper used for magazines, newsprint, fine and specialty papers, converting materials and wood products. The company has production in 16 countries and an extensive sales network comprising over 170 sales and distribution companies.