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From River to River

by Anthony V. Mannino
The largest container ships ever to call on the Port of Philadelphia began arriving in August, signaling a new era for waterborne commerce in the region. For years, ports on the Delaware River have fought to keep pace with our competitors in New York, Baltimore and Norfolk. Now, a series of major projects reaching culmination promises to bring renewed growth and thousands of well-paying jobs to the region.

The $5.4 billion expansion of the Panama Canal, completed earlier this year, will allow larger “post-Panamax” ships from the Far East and South America to more easily reach the East Coast. The MSC shipping line recently began service to Philadelphia using one of these larger vessels. Similarly, the Delaware River dredging project will increase the shipping channel depth from 40 feet to 45 feet. The $300 million project has been decades in the making, and will be completed in 2017. Although the channel depth lags some other ports (some of which can be 50 feet or more), it will ensure we can accommodate the vast majority of modern shipping vessels and remain competitive as a destination.

In addition to improvements in access, existing facilities have seen greater utilization and new facilities are expected to come on line in the near future. In South Philadelphia, acres of land that were unused only five years ago are now repurposed to process thousands of automobile imports. Philadelphia has also seen an increase in containerized cargo in recent years, as well as developing specialties in the importing and handling of wood pulp and cocoa products. The 200-acre Southport expansion at the Navy Yard has the potential to nearly double the amount of cargo handled in Philadelphia. Across the river, the new Paulsboro Marine Terminal will provide additional regional capacity.

The impact of this growth is simple: jobs. Governor Wolf estimated that approximately 3,700 new jobs could result from Southport and other improvements at the port. Port-related commerce offers opportunities for above-average income potential to Philadelphians who are skilled but not necessarily college educated—an important factor as local economies continue to adjust to the loss of middle-class manufacturing jobs. Beyond direct jobs, port growth also has the potential to drive new warehousing, logistics and transportation needs in the region.

Even with the need to navigate up Delaware River, Philadelphia is an attractive port destination because it is centrally located to population centers (29 million people within a 100-mile radius), reducing costs by allowing goods to get as close as possible to their final destinations before being transferred. The region has excellent highway access which is often less congested than metropolitan New York, and two class I railroads that directly serve the port in Philadelphia.

The city also possesses a highly trained and qualified workforce. Along with experienced terminal operators, organized labor has developed work policies and relationships that often allow us to beat competitor ports in terms of efficiency and cost.

Ongoing commitment and attention will be required for our ports to continue their role as an economic driver. Like most other transportation-related assets in the country, significant capital investment in aging public infrastructure will be required to remain modern and competitive. Also, many vessels currently arrive here full and leave empty. Replacing that empty space with exports (or “backhaul” traffic) will be a major economic and public policy challenge for the foreseeable future.

Philadelphia’s ports have been a fixture for more than 300 years. Global developments, combined with a renewed regional commitment, will ensure that our ports continue to bolster Philadelphia’s status as a world-class city for the next century.

Anthony V. Mannino, ESQ. is vice president for Corporate Strategies at Wolf Commercial Real Estate and also serves on the Philadelphia Regional Port Authority Board of Directors.

Published (and copyrighted) in Philly Biz, Volume 1, Issue 10 (September, 2016).
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