Philadelphia Port Development Plan

Thursday, March 22, 2007
A plan is underway to develop the Port of Philadelphia into a major best-in-class East Coast container facility with the potential of employing some 175,000 people and handling more than 3.5 million containers annually. Two major American terminal operators and an investment firm have already expressed interest in developing and operating container handling facilities under the new port development plan. However, the entire development is being jeopardized by the proposed relocation of a 1,100-employee Food Distribution Center (FDC) on prime waterfront real estate. Maritime and port interests are lobbying politicians and the Philadelphia Regional Port Authority to relocate the FDC away from the area. The FDC, which does not require waterfront access, would ultimately block the port's access to the three Class One railroads that convene near the site-a major and unique advantage for the port.

During recent hearings Pennsylvania Governor Ed Rendell aides indicated he would reconsider the FDC relocation if legitimate operators showed interest in the Southport project. The Philadelphia Regional Port Authority commissioners indicated at their meeting on Friday, March 2, that they would work with port stakeholders before rendering a final decision. Pennsylvania State Rep. William F. Keller, a former longshoreman, has called the commercial port development "a dream for Philadelphia we have been anticipating for 30 years. When words get around about the potential for this proposal, the offers will be coming in by the truckload. This is a boon for our region." He added: "More jobs for America in industry is what we need." "With the congestion at West Coast ports, the ship size restrictions of the Panama Canal and the growing importance of the Suez Canal because of its ability to accommodate the giant ships coming on line, Philadelphia has the potential of being a major player in globalization," said Uwe Schulz, President of the Ports of the Delaware River Marine Trade Association (PMTA) which represents waterfront employers.

The PMTA and Maritime Exchange are among a group of associations representing diverse interests in the Port of Philadelphia who have united on this issue. The others are the International Longshoreman's Association and a cadre of trade associations and related private enterprises, known as The Maritime Stakeholder Group.

The port is caught in a web of issues that can either diminish its role in world trade or make it the East Coast's destination of the future. Casino development to the north of the proposed Southport development is underway and will choke access and viability of waterfront property there. The FDC relocation as presently proposed will utilize pivotal property and block the unique rail access. The next generation of container vessels will also have greater air draft requirements thus making transit under bridges more difficult or impossible. The Southport location, south of the Walt Whitman Bridge that joins Philadelphia to South Jersey would eliminate this obstacle. The coalition hired the renowned consultancy of Paul F. Richardson Associates Inc. to produce an economic and commercial impact study. According to Edward M. A. Zimny of the Richardson group, dramatic growth is a reality as long as the southward expansion can incorporate the proposed FDC site at the Navy Yard, which would have to be relocated. The port today handles some 544,000 20-foot containerized units of cargo each year. This can grow to 3.5 million TEU by 2016. Today, the port employs some 45,000 longshoremen and port-related workers. This could easily increase to 175,000 as well, Mr. Zimny's report concluded. US container growth will double by 2020, said Mr. Zimny and "the existing transportation infrastructure, especially ports, is forecast not to be able to meet the demand." West Coast capacity constraints are forcing big box retailers, such as Wal-Mart, Home Depot and Target, among others, to change routing patterns from Asia through the Panama Canal to the East Coast. In addition, the number of post-Panamax ships coming into service will mandate use of the Suez Canal. "Philadelphia will have the potential to directly participate in this market re-allocation," said the report.

The Bureau of Labor Statistics shows that Philadelphia employment within city limits is 664,000 now from a previous high of 777,0000 in 1998. Many residents commute to jobs in the suburbs that could be located right in the city, notes Mr. Schulz. In addition, Philadelphia's taxes are among the highest in the country but could decline with appropriate commercial growth.

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