Shipping Company Gives Baltimore Port A Boost With Expanded E-Commerce Service

One of the world's largest shipping container companies is ramping up its e-commerce service to the Port of Baltimore, a move that bodes well for warehousing and distribution space in the region after a slowdown at the end of last year.   

ZIM Shipping Lines plans to increase the frequency of ships arriving at the port serving its Baltimore Express e-commerce line, Gov. Wes Moore announced Thursday. ZIM expects those calls at the port to rise from weekly stops to bi-weekly by the end of February.

“Ports America Chesapeake and the Port of Baltimore are delighted with the expanded service to Seagirt Marine Terminal with increased volumes, additional e-commerce capacity and increased global service at the port. With the increase from biweekly to weekly calls, it shows the strength of our e-commerce and mid-Atlantic market,” Vice President of Ports America Chesapeake Bayard Hogans said in a statement. 

ZIM is the 10th-largest ocean carrier company in the world with a 2% share of the total market, according to data updated this month from Alphaliner. 

The company also anticipates nearly doubling the size of its ships docking at the Port of Baltimore. ZIM expects to increase the size of ships arriving at the port to container vessels that can transport the equivalent of 6,000 20-foot containers. Eventually, the size of those vessels will grow to container ships capable of carrying the equivalent of 8,000 20-foot containers.

E-commerce firms drive much of the demand for space in the region's large industrial market, mainly benefiting warehouse and distribution space. 

ZIM's decision to escalate e-commerce shipping to the port comes as the industrial sector has slowed down in recent months, leaving some in the industry worried that developers delivered too much industrial space in recent years. 

The market for industrial space slowed at the end of 2022 after a booming period spurred by companies heavily investing in logistics infrastructure as the  coronavirus pandemic drove e-commerce demand while causing shipping delays.  

But last year's economic slowdown, caused by rising interest rates, higher construction costs and falling consumer demand for goods, spurred worries the market had too much supply. 

Those concerns intensified last year, particularly after e-commerce giant Amazon pulled back from its rapid warehouse expansion. The company said it would try to sublease as much as 30M SF and close other facilities. Those closures included two last-mile delivery stations in the Baltimore area.   

Baltimore's industrial market was in line with national trends as industrial leasing and sales slowed in the region at the end of last year. 

The region's industrial market recorded negative net absorption of over 1M SF  in the fourth quarter, according to Lee & Associates | Maryland's most recent market report. The report found that the vacancy rate in Q4 was 4.5%, up from 4.41% in Q3 and 3.97% at the end of 2021. The market had 13M SF of industrial under construction at the end of 2022. 

While the Baltimore area industrial market may have tapered off at the end of last year, industrial space was still in high demand. JLL's fourth-quarter market report called the sector's direct vacancy rates "historically compressed." 

Two of the largest leases signed in the final quarter of last year were by firms taking warehousing and distribution space. Those deals include Amazon leasing 242K SF at 1713 East Patapsco Ave. near the Port of Baltimore.  

Companies have also closed a flurry of industrial sales in the region recently. Deals include a $6.6M deal for a warehouse in Rosedale, KIMPE SAS' acquisition of a 40K SF property in southwest Baltimore, and Brennan Investment Group's purchase of 20 acres in Glen Burnie, where it proposes building an 80K SF industrial facility. 

However, some local industrial professionals said the economic slowdown chased big-money investors from the region's industrial market.

Larry Goodwin, managing principal of 1788 Holdings, told Bisnow in January that smaller properties were generating most of the activity in the market, particularly buildings under 50K SF. He said the “institutional or quasi-institutional capital" that was “leaking into our space” had disappeared.  

“They’re gone. It’s created a really big opportunity for us,” Goodwin said.