The Maine Port Authority said it will cover first-time freight costs for Maine businesses shipping products overseas within Eimskip’s network in Canada and seven European countries.
The First Pallet Free program, which pays up to $800 for a company to ship a 4-foot-by-4-foot pallet that holds about 2,000 pounds of goods, is part of a broader initiative by business leaders and academics in the state to boost international trade by Maine companies.
The group, anchored by the University of Southern Maine’s Maine North Atlantic Institute, includes the New England Ocean Cluster, the Maine Port Authority and USM faculty members.
“We aim to help Maine small businesses use the logistical infrastructure the state has invested in,” said John Nass, CEO of the Maine Port Authority. “For many small businesses, the cost to ship kills the initial spark. We offer a small incentive of up to $800 for businesses looking at overseas markets.”
The group will host its first in a series of public events at 5:30 p.m. Tuesday at Maine Craft Distilling in Portland. Another meeting will be held in the midcoast this fall.
The First Pallet Free program was announced in April and tested with a shipment of lobster shells by Ready Seafood of Portland to an Icelandic company that will make soup stock out of them. Tuesday evening’s event formally kicks off the program.
“With Ready, we tested the logistics of how we work with Eimskip and address liability issues, such as who owns the product while it’s being shipped,” Nass said.
The idea is to increase the number of Maine companies exporting products by giving them an incentive to experiment with international trade in the North Atlantic. That could be both companies shipping internationally for the first time and companies expanding shipments with a new product line.
The Maine Port Authority has allocated $20,000 initially to the program from its operating budget.
The International Marine Terminal in Portland already ships goods from 10 of Maine’s 16 counties. Nass wants to increase that to all counties.
“We are a statewide asset,” he said. “The alternatives are Boston, New York or New Jersey. It’s cheaper and easier for Maine companies to ship through us.”
The terminal handled 22,000 shipping containers in 2018. Container shipments have risen more than 20 percent each year since Eimskip located in Portland five years ago, Nass said.
“We’re doing this to concentrate on smaller businesses so we won’t suddenly double the number of container shipments,” he said, adding that this is a first step toward broadening international trade.
The port plans to offer a class on how to pack products for North American transport in collaboration with Eimskip warehouse workers. The class will be scheduled after companies sign up for the program.
Nass would not comment on which companies have expressed interest in the program but said a wooden toy manufacturer and a coffee company have.
Nass said the program uses “cost-based geography,” a concept promoted by Patrick Arnold, founder of New England Ocean Cluster and president of Soli DG, the company that manages the International Marine Terminal.
The New England Ocean Cluster is a membership-based partnership with the Iceland Ocean Cluster in Reykjavik that aims to connect businesses with the ocean economy.
The idea is that cost is the primary driver in the shipping industry. While a product can be trucked to Delaware or shipped to Norway for roughly the same cost, it could fetch up to triple the price in Norway, Nass said. That makes it worthwhile for Maine companies to consider exporting to new markets.
For Arnold, the collaboration means not only educating companies on the possibilities of expanding their business overseas, but also educating students who one day will enter the workforce.
“The learning curve is one to two years for students entering the workforce,” he said. “But we had one student who took 90 days to learn the business. That student was an intern who worked with Eimskip at the container terminal and then studied abroad with Eimskip in Iceland.”
Arnold said that when Eimskip first came to Portland, USM President Glenn Cummings said he wanted students in every Eimskip port so they could learn international trade firsthand.
“If an institution can lessen the learning curve, it’s of great value to businesses and students,” Arnold said.
Arnold said he eventually would like to see students create their own marine businesses or contribute new ideas to an established company, but near-term they can help companies where they intern by researching ways to optimize production systems or the supply chain.
“We’ve seen a significant number of students interested in international opportunities,” said Terry Shehata, coordinator of the Maine Economic Improvement Fund. The fund is allocated by Maine lawmakers to the University of Maine to support research in seven key areas, including marine science.
USM has a program for graduate students to apply law and business to international trade. It also wants to move that to undergraduates.
“This isn’t just to learn regulatory compliance,” Shehata said. “It’s to help students start a marine business here in Maine.”
Shehata, Cummings, Nass and Arnold will speak at Tuesday’s meeting, along with Billie Cary, trade information specialist at the Maine International Trade Center, and Robert Heiser, a business professor at USM.