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Port of Philadelphia angles for Panama Canal traffic, growing share of state, regional shipping

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Think about the banana you had for breakfast. You know it wasn't grown on a farm in the rolling hills of Lancaster County, but in some distant tropical place where it probably never snows.

If you live in Central Pennsylvania, there’s a strong probability that banana found its way into your hands through the Port of Philadelphia.

Same goes for some of the cocoa beans that were ground up to produce the Hershey bar that tides you over until lunchtime, and the avocados you mash up into guacamole for weekend parties.

If you’re looking to buy a new Hyundai or Kia, your future wheels probably first landed in the U.S. on the shores of the Delaware River, too.

Ditto for the stuff you use to clean up after yourself and your family, since the port is a major destination for wood pulp that Pennsylvania factories turn into paper towels, toilet paper and diapers.

More than just a landing point for imported goods, the sprawling collection of warehouses, cranes, storage yards and railroad terminals covering 1,000 acres along Philadelphia’s waterfront gives Pennsylvania’s manufacturers an embarkation point to sell their finished products worldwide, while helping promote the dramatic growth in distribution centers that have created jobs along busy Interstate highways to the west in Central Pennsylvania and the Lehigh Valley.

Port of Philadelphia
Port of Philadelphia - ()

Last year, 6.09 million metric tons of freight moved through the port — to put that in perspective, consider that the typical midsized passenger car weighs between 1 and 1.5 metric tons. It marks the port’s sixth consecutive year of growth, according to statistics provided by the Philadelphia Regional Port Authority, or PRPA, a state agency that owns the terminals and coordinates marketing and promotion of the port on behalf of the private companies operating the facilities.

Looking to keep that growth streak growing, port authority officials — like their counterparts up and down the East Coast — see a prime opportunity flowing from developments 4,500 miles away, at the same time as they and state leaders are gearing up for a major expansion known as Southport, set to break ground next year.

That development is the widening of the Panama Canal, completed this summer.

Philadelphia is in the midst of a channel-deepening project that will allow the port to attract the larger ships that can now traverse the Central American waterway, laden with expanded cargoes of commodities and consumer goods. That potential bonanza only fuels the port authority’s ongoing quest to attract shippers throughout the region, including those who might otherwise consider sending and receiving goods through rival facilities, particularly those in New York and Baltimore.


Even Gov. Tom Wolf is pitching Pennsylvania’s biggest port.

“I see it as an opportunity for creating jobs,” Wolf told CPBJ in an interview. “More ships are going to want to come here.”

For Pennsylvania as a whole, success in promoting a rising tide at Philadelphia has the potential to lift all boats: $86.2 million in state and local taxes already are generated by the port each year, PRPA statistics show, while its presence is responsible for 3,888 direct jobs and 9,200 indirect positions.

Growing those numbers requires generating word of mouth about the port’s virtues, something PRPA officials work to spread among shippers and shipping lines worldwide. They extol quick turnaround capabilities, less congestion around Philadelphia’s road and rail links compared with competing ports, and its proximity to millions of square feet in distribution center space within 100 miles — more than 250 facilities are located within one day’s transportation, and many of them are found in the greater Harrisburg area and Lehigh Valley.

“We look at ourselves as an economic development agency,” said Sean Mahoney, PRPA’s marketing director.

Going deeper

For the Philadelphia port to take advantage of bigger vessels coming through Panama — dubbed “Neo-Panamax” ships — the main channel of the Delaware River must be deepened from 40 feet to 45 feet. That $353 million, seven-year project, which is about 80 percent complete, is expected to be finished next year, port officials say.

When that happens, the port will be able to accommodate boats of up to 10,000 TEUs, or “twenty-foot equivalent units,” a measure derived from the volume of a 20-foot-long intermodal container.

Larger vessels already have begun to call.

The MSC Sofia Celeste, an 8,800-TEU vessel, made history on Aug. 3, when it docked at the Packer Avenue Marine Terminal in South Philadelphia, becoming the largest ship to arrive at the port up to that date.

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Operated by the Mediterranean Shipping Co., MSC Sofia Celeste also is the first to travel on that company’s newly reconfigured route between the west coast of South America, the U.S. and northwest Europe, port authority officials said, making stops in Chile, Peru, Ecuador and the Bahamas before calling at Philadelphia en route to Rotterdam in the Netherlands. Completed in 2014, the ship includes space for 1,462 TEUs of refrigerated cargo. Its first load heading into Philly was mostly fruit and vegetables from Chile and Peru, PRPA Communications Director Joe Menta said.

“This new service comes as a direct result of the opening of the Panama Canal expansion,” said David Whene, president of Greenwich Terminals LLC, which operates the Packer Avenue Marine Terminal.

Other factors

Depth isn’t the only metric port authority officials cite in support of Philadelphia’s competitive edge.

On the physical side, there’s also air draft, or the distance from water level to the highest point on a vessel.

Thanks to the 85-year-old Bayonne Bridge between New Jersey and Staten Island, New York’s air draft is 151 feet, varying slightly with tides. Philadelphia’s air draft is a roomier 188 feet.

Admittedly, that advantage won’t last forever. With modern vessels too tall to clear the bridge and hundreds of millions of dollars in traffic at stake, the Port Authority of New York and New Jersey isn’t standing still. A $1.3 billion project to raise the bridge deck 64 feet, to 215 feet, is well underway. But it’s delayed, with completion rescheduled from the middle of this year to late 2017, according to the authority’s website.

Even so, there are several other intangible assets that the Philadelphia port’s boosters see as working in their favor.     

International Longshoremen’s Association Local 1291 (ILA), the dock workers’ union, offers 19 daily start times in Philadelphia, compared to five in New York, the port authority points out, translating into quicker turnaround times for goods. PRPA leaders credit good labor relations and ILA cooperation for helping keep the facilities competitive.


For all that, New York remains the nation’s third-largest port as well as the largest and busiest on the East Coast, handling 73.6 million metric tons of cargo last year, according to its website.

“Are we ever going to be bigger than New York? No, we’re not. But we believe we can grow our market share,” said Dominic O’Brien, the port authority’s senior marketing representative.

Philly’s smaller size is a hidden blessing, port officials say: less congestion in and around the port, together with easy highway and rail access, means truck turnaround times can be less than an hour. Truckers serving New York have at times experienced hours-long waits, and while the Port Authority of New York and New Jersey has been working on ways to break the logjams, the issue has attracted attention from business media, as well as from shippers.

That’s why global candy giant The Hershey Co., based in Dauphin County, looks to Philadelphia.

“We do export some finished products through Philadelphia, and import some equipment,” Hershey spokesman Jeff Beckman said. “One of the reasons why we import/export from Philadelphia, when possible, is to avoid the port congestion in New York/Newark.”

What and where

The MSC Sofia Celeste became the largest ship ever to arrive at the Port of Philadelphia on Aug. 3.
The MSC Sofia Celeste became the largest ship ever to arrive at the Port of Philadelphia on Aug. 3. - ()

The “port” is actually comprised of 16 different facilities spread out between South Philadelphia and the city’s Port Richmond section, about 9 miles northeast. Each of those facilities is a world unto itself, a microcosm in which goods from around the world land and depart using modern — and some time-honored — techniques. A few key locations help tell the port’s bigger story.

Busiest among them is the Packer Avenue Marine Terminal in South Philadelphia, a 112-acre complex where containers of freight, steel products, meat, fruit and paper are among the items changing hands. Towering dockside cranes haul cargo to and fro.

Across Columbus Boulevard to the southwest are the busy Norfolk Southern and CSX intermodal yards, connected to the terminal by rail spurs, while access to interstates 76 and 95 is less than a half-mile away.

On the other side of I-76 and Columbus Boulevard, the 84-acre Philadelphia Auto Processing Facility bears testimony to one of the port’s high-profile success stories.

Pier 96 and the Pier 98 annex are a hub for truck and heavy equipment shipments. And that’s where hundreds of thousands of new cars enter the country — an estimated 156,000 in 2015 alone. Many are processed at the neighboring auto facility, where a detailing and accessory shop and car wash can handle 125 cars per hour, readying the vehicles for sale before they are transported to car dealerships up and down the Eastern Seaboard.

On lots nearby, acres of shiny sedans and SUVs await a lift by truck or train to their final destinations. They are the tangible symbols of a victory scored six years ago, when Philadelphia port officials convinced Hyundai Motor Co. and Kia Motors Corp. to ship their South Korean-made cars through Philadelphia, and use its newly upgraded auto-processing facility, instead of Newark or Baltimore. A $1 million investment in the state-of-the-art processing center had paid off, with hundreds of jobs created as a result.

“It really was a nice boost in the arm for our area,” PRPA’s Mahoney said.

Diverse facilities, cargoes

Heading north along the river, the early 20th century facade at Pier 84 conceals one of the nation’s key cocoa ports. There, more than 113,000 tons of beans from equatorial regions worldwide were unloaded last year, PRPA statistics show.

The facility adds value by offering services such as weighing, grading and testing of the beans, as well as more than 500,000 square feet of dry storage, officials said. The port then repackages material based on the end user’s needs.

What hasn’t changed over the years is how those beans arrive — in burlap sacks, not boxes or containers, the port authority’s O’Brien said. Many of the beans come from Africa, and “that’s just how they prefer to do it,” he said.

Some of those beans find their way to the midstate. Hershey’s Beckman said that while the company’s suppliers are the importer of record for cocoa and other commodities, they do use the port of Philadelphia, as well as other ports, to land those goods.

Cocoa beans aren’t the only food product passing through PRPA’s doors, and many require even more specialized handing. Meeting that need has become one of the port’s niche roles, with specialized infrastructure to match.


That includes refrigerated warehouses, freezers and on-dock electrical outlets for perishable product containers (called “reefer plugs”), which have helped turn the Port of Philadelphia into the nation’s leading import site for bananas, Chilean fruit, Australian meat and New Zealand dairy products.

Last year, more than 295,000 tons of fruit were brought into the port. All Delaware River ports — including those in neighboring New Jersey — accounted for $2 billion worth of fruit imports and $5 billion worth of food imports, port authority statistics show.

Much finds its way into the port-owned Philadelphia Wholesale Produce Market, across the Schuylkill River on Essington Avenue in Southwest Philadelphia. At 686,000 square feet — larger than 14 football fields — the market, which opened in 2011, is the world’s largest fully-enclosed, fully-refrigerated wholesale produce terminal, PRPA says. Its inside temperature is maintained at 50 degrees year-round to keep produce fresh.

While cars and food are key imports, they are only part of the overall mix. Petrochemicals, steel, forest products and 430,000 TEUs worth of containerized goods also flow through the port.

Two years ago, Fibria Cellulose, a Brazilian pulp company and paper company, brought its business from Baltimore to the Tioga Marine Terminal in Philadelphia. It shipped 360,000 tons of pulp to Tioga last year, which was distributed to consumer paper facilities, such as Procter & Gamble’s Mehoopany plant in northeastern Pennsylvania.

As with the auto terminal, infrastructure upgrades were key. State officials — including then Gov. Tom Corbett — helped sell the idea through personal interaction with Brazilian officials.

Not only did the Fibria deal help reinvigorate Tioga and create new jobs, it has attracted interest in the port from other pulp companies, officials say.

All the traffic is not inbound, of course. As Wolf and PRPA officials point out, Pennsylvania exporters also have sent goods to market through Philadelphia — in addition to Hershey, lift manufacturer JLG Industries in McConnellsburg, Mack Trucks in Macungie and Pittsburgh-based PPG are among some of the high-profile brands they named.

Port expansion

Maintaining a diverse roster of shippers and destinations is critical to building traffic, Mahoney and O’Brien explained. Port authority officials and representatives from the private operating companies constantly scout for new leads worldwide.

The port is served by about a dozen carriers, whose ships link Philadelphia with Europe, Mexico, Central and South America, Australia and New Zealand, Africa and Asia. Recent route additions have strengthened links with Mexico and South America.

Bigger changes are in the air, as the port authority and the state look to grow.

The authority has invested $30 million in prep work at the Southport Marine Terminal Complex, with plans to develop a 196-acre container terminal on redeveloped land near the Philadelphia Naval Shipyard west of Packer Avenue.

Slated to be the port’s first major marine terminal expansion in over 40 years, construction on the project is expected to begin in 2017, creating up to 3,700 jobs. The port authority has issued a request for proposals from private developers, with whom the agency would partner to design, finance and build the project.


Such “public-private partnerships” have been a hallmark of Wolf’s approach to transportation investment, and the Southport effort was launched in connection with his strategic plan to ensure long-term stability and growth at the port.

“We want this to be a place that creates good jobs,” the governor said.

The state has dedicated more than $300 million to the port since 2010, and spends $25 million per year on maintenance alone, according to the governor’s office.

Under Wolf’s tenure, seven new board members have been named to the port authority, and the agency in July concluded its nationwide search for a new leader with the hiring of maritime industry veteran Jeff Theobald to serve as CEO. He replaces James T. McDermott Jr., who retired in April.

Wolf also has created an advisory committee of stakeholders from industry, labor, local and state government to create a unified vision for the port’s future, and has directed the state Department of Transportation to study best uses for the port in the future.

“This isn’t something that is just for Philadelphia,” Wolf said. “It’s going to open up opportunities for the rest of the state.”

Read more from Central Penn Business Journal's 2016 Midstate Supply Chain issue here.

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Roger DuPuis

Roger DuPuis

Roger DuPuis covers Cumberland County, health care, transportation, distribution, energy and environment. Have a tip or question for him? Email him at rdupuis@cpbj.com. Follow him on Twitter, @rogerdupuis2.

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