🔒Public/private efforts travel parallel paths to create a logistics hub between Bangor and Searsport

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Some might call it kismet. Others, karma.

But when a private company and a public economic development group pursue the same goal without the other knowing, there's bound to be a surprise connection. Such was the case when Bob Ziegelaar, a consultant active in Eastern Maine Development Corp., and David Colter, president of GAC Chemical, bumped into each other this summer.

"I've known David for a long time, and as we were chatting, I mentioned this initiative I'm involved in to develop the port of Searsport and the Bangor/Searsport region as a logistics hub, and he said 'That's interesting, we're talking about exactly the same thing,'" says Ziegelaar. "It was totally coincidental."

Both men are marshaling forces to develop the transportation corridor between Bangor and Searsport and the port of Searsport into a centralized operation for global intermodal transport. The region's logistics assets are plenty: I-95 provides trucking; Montreal, Maine & Atlantic Railway provides rail; the port provides ocean shipping; and the Bangor International Airport provides air transport.

"We have more than a few assets here that can help us flesh out a role for Maine in the larger global economy," says Ziegelaar, who now runs consulting firm MainXPO after selling his aviation firm The Telford Group in 2009. "I've had the notion for a long time that Maine can't count on the federal government for its economic future, that we have to carve out a niche in the global market, not just the state market."

Ziegelaar is co-chairing a group within EMDC's Action Committee of 50 charged with building momentum around a logistics hub. The idea emerged from a Mobilize Eastern Maine project mapping the area's assets as the foundation and focus for economic development. The group is in the early stages of planning a summit this fall for businesses, exporters, transportation officials, trade representatives and other stakeholders.

Colter, whose Searsport-based company produces chemicals used in products ranging from Michelob Ultra and Twinkies to glossy paper and treated wastewater, intends to be there. The company this summer launched a logistics initiative to better use assets now lying fallow. The company wants to develop a division called Logistics Solutions to offer clients supply chain services for chemicals and other raw materials.

"We have 150 acres in Searsport, but only use 25," says Colter. "We have 10,000 feet of track. We have a million-and-a-half gallons of liquid storage and other warehouse space. We have a lot to offer a logistics hub."

Colter says the logistics idea sprouted after hiring John Wolanski to head up GAC Chemical's sales and marketing department. Wolanski had the same position at Safe Handling Inc., the chemical and bulk transport company in Auburn that spurred investment in Lewiston-Auburn's logistics hub and intermodal transportation center. He also sits on the board of the Maine International Trade Center and is president of the University of Maine Pulp and Paper Foundation, positions that give him a strong understanding of supply chain logistics, especially for the paper industry.

Wolanski says he knew of GAC Chemical only as a competitor in the chemical supply business and was unaware of its logistics assets until he interviewed for the post.

"Then I took a tour and thought, 'Wow, there's tremendous potential here," he says.

The company intends to offer rail-to-truck transloading; chemical manufacturing and toll processing; and repackaging, storage and distribution of products. An engineer is assessing the rail and storage upgrades GAC Chemical needs to offer logistics services, says Wolanski, which will determine the company's level of investment.

For Colter, the appeal of developing a logistics hub around the GAC property in Searsport is two-fold: It can diversify the company's revenue stream, and it opens the potential to import raw materials and export finished goods to more markets.

"I think, too, that there's a sustainability issue here," he says. "This will help promote industrial development here in Maine. I'm a firm believer in the manufacturing sector and better utilization of the port can bring in different types of products."

Capitalizing on assets

Colter's philosophy is shared by others. David Cole, who was Maine's transportation commissioner for eight years and now runs a transportation consulting business, says he was inspired this spring by the sight of modules built by Cianbro Corp. at its Brewer facility as they headed down the Penobscot River destined for oil refineries on the Gulf Coast. That sight, and the potential it represents for a reinvigorated manufacturing industry to create jobs and trade opportunities, struck a chord.

"It seems to me, the direction this country is now heading in of borrowing and spending cannot be sustained," he says. "It's become clear to me to maintain a standard of living [we need to embrace manufacturing] and that exports have to play a role in this."

Cole, a former director of the Action Committee of 50, was involved in the Mobilize Eastern Maine project, gauging the area's transportation assets. That work became a run-up to the logistics hub group, which Cole co-chairs with Ziegelaar.

Many of the area's transportation assets were already identified in a 2009 report to then-Gov. John Baldacci entitled, "Moving People and Goods: The Governor's Rail and Port Investment Plan," which identified $173 million in investments to enhance the state's freight infrastructure. In that report, the Bangor-Searsport freight corridor was identified as having strong economic development potential if enhanced rail and port capacities could be created.

"We're not talking about anything really new here," says Cole. "What's different is no one is talking about one particular mode here, but rather how we can get it to work together."

John Henshaw, executive director of the Maine Port Authority, says renewed interest in the port of Searsport couldn't come at a better time. Two large projects — both funded with private investment — are significantly expanding the port's capacity. The first is the expansion of a clay slurry company on Searsport's Mack Point. Henshaw says the operation was recently acquired by Imerys, a mineral-processing corporation based in France, sparking fear it would close the Maine operation and consolidate elsewhere. Instead, Imerys doubled the capacity of its Searsport facility based on sustained demand for its product in the paper-making industry, says Henshaw.

And DCP Midstream, a Colorado-based energy company, within a year expects to begin building a $50 million propane terminal at the port, and is currently in the permitting process, says Henshaw.

"Once finished, that will likely increase port activity and help to stabilize the supply of propane for the state," he says.

The port also received $7 million in federal money to purchase a mobile bulk crane, which will allow it to move heavy cargo from vessels onto land and around the terminal. The crane has been ordered and is expected to allow the port to increase its handling of products, such as wind turbine components that are already arriving.

"Searsport is the 10th-busiest wind-turbine component port in the country," says Henshaw, noting components for at least three wind power projects are coming though the port by the end of the summer.

The midcoast port's deep waters and protected harbor make it well suited to handle bulky items such as wind turbine components for wind power projects in Maine, northern New England and Canada. Other bulk cargo such as gypsum, copper slag and wood products represent growing markets for the port. An Army Corps of Engineers project to dredge the port to increase its depth from 35 feet to 40 feet is in the design phase. Money from a 2009 state transportation bond has already been appropriated for the project, which will allow port access for larger ships and eliminate the need for some ships to wait for tide changes before they can approach the port, says Henshaw.

Finding money, momentum

Backers of the logistics hub acknowledge the reluctance in Gov. Paul LePage's administration to pursue bonds will make financing the initiative a challenge. But Ziegelaar says the logistics group can make a strong case that Bangor is the state's economic hub north of Lewiston and if the state doesn't capitalize on assets there, the entire economy of northern and eastern Maine is threatened. Bringing a cohesive, collaborative approach to developing a logistics hub to the area simply makes sense, he says.

"The issue hasn't been one of capacity — we have ocean, rail and highway all available in this market," says Ziegelaar. "The problem was we couldn't generate momentum. We can be a very large player in the logistics market and I think we can make the case that we have the space, labor and appetite for that role."

Carol Coultas, Mainebiz editor, can be reached at ccoultas@mainebiz.biz.