When it comes to cause and effect in a maritime economy, you can’t get much bigger than the Panama Canal expansion project and its ripple effect on ports 1,800 nautical miles away.
With the dredging of the Delaware River almost complete, attention has turned to regional port officials, timelines, and the question of just who will be ready to capitalize on the boon of large container vessels that could head to the eastern seaboard next year.
Diamond State Port Corporation, the state run entity that operates the Port of Wilmington, has authorized a feasibility study including analysis of environmental, technical and legal issues of three possible expansion sites, while New Castle County officials say they’ve already located a site that’s “shovel ready.”
A 22-member expantion task force established by legislative resolution will review results from the study, scheduled to be completed in mid-February.
“What’s happened with the Panama Canal is that it opens up the opportunity to capture the Far East trade that is diverting from the West Coast to the East Coast ports,” said Dennis Rochford, president of the Maritime Exchange for the Delaware River and Bay. “Having a deeper channel will allow us to accommodate that new business.”
For some regional ports on the Delaware River, that means new infrastructure. The South Jersey Port Corporation has already started construction of a new container terminal on a 200-acre brownfield site in Paulsboro. The Port of Philadelphia is also examining possibilities for Southport, at the site of the old Philadelphia naval yard while the Packer Avenue Marine Terminal accepted a new class of vessels last year.
Completion of the Panama Canal expansion is scheduled for sometime next year, some Delawareans say the window of opportunity is getting smaller.
New Castle County officials, including County Executive Tom Gordon and the Longshoreman’s Association, are pushing for a projected $627 million plan at the Riveredge Industrial Park south of the Delaware Memorial Bridge.
The county funded a study of the site last year. It includes a proposed state-of-the-art container terminal equipped with the latest equipment, including cranes that will handle larger container vessels that carry 8,500 TEUs (Standard unit for describing a ship’s cargo carrying capacity);and two berths, with expansion room for up to four.
According to Ronald “Kimoko” Harris, business agent for the International Longshoreman’s Association Local 1883, the county and the union have been on the front end of expansion for several years..
“We have a sense of where the trends are,” said Harris, who has worked in shipping for more than 40 years. “We have a vision for the future.”
Meanwhile, Diamond State has distributed Request for Proposals for a strategic master plan to review options that range from expansion of the existing port from the mouth of the Christina River to the Delaware River; construction of a new container terminal in Claymont; and a review of the Riveredge site.
Harris, who is a member of the expansion task force, said he’s glad to see the the task force moving forward, but he wonders if it may be too little, too late.
“We’ve wasted over a year when we first initially started this,” said Harris. “The sooner we have a facility ready on Delaware ““ it’s to our advantage. Why support dredging and then have no facility on the river?”
Harris said that a container terminal could be built at the site in a matter of months, providing thousands of jobs and finally giving the Port of Wilmington an opportunity to capitalize on container goods.
“I can’t understand what the issues are,” said Harris. “This is a great idea for Delaware that will create thousands and thousands of jobs. This is sorely needed. This is a blessing to the state.”
But Board Chair Jeffrey Bullock said that Diamond’s measured approach to securing well-researched answers about options will gain the confidence of potential investors looking for certainty – a different approach from the county’s “if you build it they will come” strategy.
“My view as Secretary of State is that we shouldn’t really care where it goes, we should care about where the best opportunity for state is to be successful,” said Bullock. “Success is defined by a facility that can attract investment and that can attract business.”
The Port of Wilmington is a full-service deep water marine terminal that handles 400 vessels per year with an annual import/export cargo tonnage of $5 million tons, according to port officials. It is North America’s top hub for bananas and receiver of bulk, break bulk and pallets.
But it’s the post-Panamax container vessels – nearly double the size of their predecessors – that Harris and his team say could transform the local economy.
These containers carry the goods for virtually every chain store throughout the U.S. according to Harris. And long unloading times on the west coast further enhance east coast terminals as a viable option for container vessels.
“Containers have clothes and radios and televisions and everything you find in stores,” said Harris. “But you don’t need refrigeration, just room to stack them. Cargo comes off the ship hits a truck or a train and it’s gone.”
Both the state and the county voiced agreement about the need to keep the Port of Wilmington’s current terminal operation robust. But a plan to entice imminent business from growing container traffic has struck a dissonant chord.
Dredging Project
The $360 million dredging of the Delaware River from 40 to 45 feet is the last deepening project along the Atlantic, according Army Corps of Engineers Ed Voigt, chief of public and legislative affairs.
According to Voight, dredging plans for the 102-mile river date back to the early 90s, when port officials began to look for opportunities to improve navigation and realize economic benefits of the Delaware River. Army Corps officials said the deeper channel will provide more efficient transportation. More than 16 million cubic yards of material were removed during initial construction, said Voigt, come of it placed as beachfill and wetland restoration in Delaware.
The benefits of dredging are broader than just accommodating larger container traffic, according to Rochford.
The ongoing project will protect the business of the regional port complex, which includes 50,000 jobs, business revenue of $3.1 billion and state and local taxes of $450 million between Philadelphia, South Jersey and Delaware ports.
The Panama Expansion Project
Ship builders had already begun building post-Panamax size vessels years ago, so the Panama Canal Authority responded with a $5.2 billion project to build a new lane of shipping traffic to accommodate a larger class of container ships.
The Panama expansion and the new traffic to Delaware River ports was already an issue during 2012’s contract negotiations, according to Harris, when workers wondered about the possibility of new business and job creation that could be generated if they could be ready in time.
For Diamond State Port Corporation, the window is less of an issue.
“By the time you do the study and then work with investors and then construction, it’s not going to be ready when canal is ready,” said Communications Director
John Haroldson.
Shipping on the Delaware River
The Maritime Exchange projects nearly 2,200 cargo ships that will come to the river carrying 100 million tons of cargo this year, according to Rochford, who said the organization acts as a “chamber of commerce to the Delaware River, advocating for businesses and working with federal agencies and regional congressional delegations.
“Ports compete for cargo and they compete worldwide,” explained Rochford. “And to take it to the 45-foot channel, that’s beneficial to all three facilities. It puts them in a position to compete for new business.”
New business could mean a fleet of ships with near the double the container capacity, from 6,000 to 9,000 TEUs.
With Diamond State’s study scheduled to be completed in March, Harris said he doesn’t know if the state can wait.
“We need to look at speed to market,” said Harris. “We want to have our facility up and running and reach out to investors and way, “˜We’re ready, the land is ready, come on with your dollars.'”
We think there’s a sense of urgency,” said New Castle County Executive Tom Gordon. “We “˜re already losing opportunities to New Jersey.”
Gordon touted the port’s central location and said expanding operations is an opportunity to offer more jobs and livable wages.
But if slow and steady wins investment dollars, Bullock said Diamond State’s comprehensive and careful approach is best and he’s encouraged by discussion that’s focused on attracting new business to the existing port facility as well as expansion options.
“I think while we have people that wanted to go their own separate way I think at the end of the day the best approach for our long-term success is to take this comprehensive look up and down the river to figure it out,” said Bullock. “That’s what investors will want, they’ll want the best option.
And they’ll want to know the state is behind it.”
