Maritime Commerce in Greater Philadelphia

Home , Delaware River Region, Point of Origin (novel), Port of Camden, Port of Chester, Port of Paulsboro, Port of Philadelphia

MARITIME COMMERCE IN GREATER PHILADELPHIA

Assessing Industry Trends and Growth Opportunities for Delaware River Ports

July 2008

1 TABLE OF CONTENTS Table of Contents

Maritime Commerce In Greater Philadelphia

Executive Summary 3

Introduction and Project Partners 8

Section 1: Economic Impact Analysis 9

Section 2: Delaware River Port Descriptions & Key Competitors 12

Section 3: Global Trends and Implications for Delaware River Ports 24

Section 4: Strategies and Scenarios for Future Growth 31

Section 5: Conclusions and Key Recommendations 38

Appendices

Appendix A: Glossary 40

Appendix B: History of the Delaware River Ports 42

Appendix C: Methodology for Economic Impact Analysis 46

Appendix D: Port-Reliant Employment 48

Appendix E: Excerpts from Expert Panel Discussions 49

Appendix F: Port Profiles 55

Appendix G: Additional Data 57

Appendix H: Delaware River Port Maps 62

Appendix I: End Notes 75

Appendix J: Resources 76

2 EXECUTIVE SUMMARY Executive Summary

For more than 300 years, the from origin to final destination. supports 12,121 jobs and $772 mil- Delaware River has served as a key ⇒ Implications for Delaware lion in labor income, generating $2.4 commercial highway for the region. River Ports. The region has ca- billion in economic output. While Greater Philadelphia’s mari- pacity to accommodate growth, The port industry’s regional job time roots remain, rapid globalization but its ports must collaborate to base is relatively small, but those jobs and technological advances are driv- develop a comprehensive plan generate higher than average income ing an industry-wide transformation that addresses existing con- and output per job. Regional direct that has impacted the role that Dela- straints and rationally allocates jobs represent an average annual in- ware River ports play in the larger cargo based on competitive ad- come (including fringe benefits) of economy. vantages. $80,000, more than double the re- Understanding the impact of ever ⇒ Recommended Strategies for gional per capita income. -evolving trends in maritime com- Port Growth. The potential for Port activity in the City of Phila- merce on Greater Philadelphia is Delaware River port growth will delphia is responsible for approxi- essential to make appropriate policy depend on the region’s ability to mately 45 percent of regional im- and investment decisions. To this leverage existing competitive pacts. City ports employ 1,945 work- end, the Philadelphia Industrial Devel- strengths, strategically invest in ers who earn $142 million and gener- opment Corporation (PIDC) spon- infrastructure enhancements, ate $569 million in economic output. sored a study of maritime commerce in and collaborate to ensure the Direct city port jobs support an addi- Greater Philadelphia, commissioning efficient deployment of re- tional 3,565 indirect and induced the Economy League of Greater Phila- sources. jobs. In sum, port activity in the City delphia to lead a project team that con- ⇒ Scenarios for Port Growth. of Philadelphia supports 5,510 jobs sisted of a partnership with the Eco- Given dynamic industry trends, and $338 million in labor income, nomic Development Research Group Delaware River ports are at a generating $1.0 billion in economic (EDR) and assistance from Select critical juncture. Future growth output. Greater Philadelphia and the Delaware will depend on the extent to Regional port activity annually Valley Regional Planning Commission. which the ports collaborate to adds $81 million in tax revenues to implement recommended strate- The study considered port activity Pennsylvania, New Jersey, and Dela- gies. ware, as well as $12 million to City of on both sides of the Delaware River, from Trenton, NJ and Bucks County, Philadelphia coffers.1 PA to the ocean. Its analysis included Economic Impact a review of dynamic factors impact- Delaware River port activity gen- Delaware River Port ing maritime commerce in Greater erates jobs, labor income, economic Descriptions Philadelphia. Its key findings include: output, and tax revenues. Delaware River ports employ 4,056 workers The Delaware River port indus- ⇒ Economic Impact. The port who earn $326 million and generate try’s contribution to the Greater industry’s regional job base is $1.3 billion in economic output. Philadelphia economy is a result of relatively small but generates Each direct port-related worker sup- activity at the region’s more than 40 higher than average labor in- ports an additional two jobs from port facilities and their associated come and economic output per industry demand and worker re- businesses. The region’s public port job. spending. Based on these impacts, facilities are owned by three state-run ⇒ Delaware River Port Descrip- port activity in Greater Philadelphia entities: the Philadelphia Regional tions. The region’s inability to overcome natural and market- based limitations have resulted in Economic Impacts Related to Delaware River Port Activity, 2005 a loss of global market share in maritime commerce. Greater Philadelphia City of Philadelphia ⇒ Global Trends. Projections in- Totals Direct Total Direct Total dicate continued containerization Employment 4,056 12,121 1,945 5,110 and rationalization of trade, es- Labor Income $326M $772M $142M $338M pecially from high-growth Asian markets seeking to improve the Economic Output (e.g., sales) $1.3B $2.4B $569M $1.0B cost-effectiveness of service Total Tax Revenues $81M $33M Note: Economic impact calculations using IMPLAN model.

3 EXECUTIVE SUMMARY

fruit, nuts, cocoa beans, and meat Vessel Calls by Ship Type, 2005 products. These cargoes require specialized facilities that are difficult to replicate; Greater Philadelphia’s agglomeration of specialized facilities is Virginia Ports a significant competitive advantage Product Tanker for capturing a large market share of Crude Tanker Delaw are Riv er these commodities. Por ts Container Dry Bulk Where Delaware River ports are most lacking is in container facilities, Ro-Ro New Y ork which has accounted for the vast General Cargo majority of global growth in mari- Combination time commerce over the past quarter Baltimore Gas Carrier -century. Competitor ports, such as the Port of New York/New Jersey, 0 1,000 2,000 3,000 4,000 5,000 6,000 Baltimore, and Virginia, have supe-

Source: U.S. Department of Transportation, Maritime Division. rior location and market advantages and have made significant invest- Port Authority (Pennsylvania); the inability to strategically position itself ments to expand container capacity, South Jersey Port Corporation (New to leverage a flourishing maritime managing to increase share of con- Jersey); and the Diamond State Port industry. As a result, while Delaware tainer shipments. Delaware River Corporation (Delaware). Dozens River ports have managed to capture ports have failed to match these in- more facilities are owned and oper- a share of global growth, their overall vestments. As a result, no port on ated by private entities. market share has declined. the Delaware River is considered a The region has historically strug- Another reason for the region’s top-tier container destination, and gled to keep pace with the ever- decline in market share is the nature the region has not enjoyed the full evolving maritime industry. This real- of cargo handled by its ports. Ap- impact of global containerization. ity is due in part to inherent physical proximately 65 percent of the re- Emblematic of this shortcoming is limitations of its port complex, lo- gion’s cargo tonnage is in petroleum, the region’s paucity of trade partner- cated 60-100 miles up the naturally a stable industry but one that has not ships with Asia, the world’s largest shallow Delaware River, increasing experienced market growth. The re- container growth market. shipping costs and constraining mar- gion also specializes in “niche” car- Another factor in the Delaware ket competitiveness. But the region’s goes such as steel, wood products, River ports status is a drastic import/ struggles are also owed in part to the and perishable items such as fresh export trade imbalance. A weak export market compromises cost competitiveness by limiting the ability for Rankings of U.S. Ports by Tonnage and Value, 2005 shipping lines to “backhaul” cargo, thereby increasing the unit costs of Cargo Tonnage calling upon a port. In 2005, the re- Imports Exports gion’s import tonnage outpaced ex- Rank Port Short Tons Rank Port Short Tons port tonnage 34:1. Philadelphia’s 11 Philadelphia 25,914,744 60 Camden-Gloucester 545,293 import/export trade imbalance was 17 Paulsboro 18,133,852 66 Chester 400,092 even more severe at 80:1, while Cam- 33 Wilmington 6,896,449 67 Wilmington 381,567 den (9:1) and Wilmington (18:1) were 40 Camden-Gloucester 4,742,854 70 Philadelphia 322,702 comparably less severe. 66 Chester 1,243,599

Cargo Value Imports Exports Global Trends Rank Port Value ($) Rank Port Value ($) Shifts in technology, consump- 6 Philadelphia 29,462,379,151 22 Philadelphia 2,430,517,679 tion, and trade patterns are changing 35 Chester 5,684,957,894 24 Wilmington 2,175,543,116 the nature of global maritime com- 37 Wilmington 5,499,289,565 32 Chester 1,594,532,247 merce. Specifically, the containeriza- 79 Paulsboro 255,203,257 74 Camden 149,968,973 tion of cargo and rise of Asian manu- 103 Camden 67,409,025 84 Paulsboro 88,580,455 facturing have driven increases in Note: Tonnage is for foreign trade only.

4 EXECUTIVE SUMMARY

global cargo demand, led by double- digit annual growth of demand from Annual Growth in Container Demand South and East Asian markets. Con- by World Region, 1990-2005 tainerization is expected to continue, World Region 1990-1995 1995-2000 2000-2005 with container-based shipping pro- North Europe 6.45% 8.07% 8.52% jected to double from its 2000 total S. Europe/Mediterranean 11.41% 12.86% 9.96% by 2020. Middle East & South Asia 12.90% 10.48% 15.39% Rapid containerization is driving Sub-Saharan Africa 9.55% 8.35% 11.78% innovation in the shipping industry. East Asia 14.22% 11.13% 12.22% To increase efficiency, shipping lines Australia/Oceania 5.00% 8.22% 7.84% are adding larger ships to their fleet North America 6.13% 7.48% 7.24% that are able to carry more contain- Other Americas 14.58% 10.72% 9.64% ers, thereby lowering unit shipping Total 10.83% 10.14% 10.82% costs. Ports, in turn, have been Notes: CAGR=Compound Annual Growth Rate; major bulk cargo limited to iron ore, grain, coal, bauxite/alumina & phosphate. forced to continually upgrade terminal and intermodal infrastructure to Implications for Delaware River country (27 million people live within 100 miles and 90 million within 500 keep pace with the demands of in- Ports creasing cargo volumes. For many miles), give its ports a large natural ports, investments have included Global trends in maritime com- consumer market. expensive channel-deepening pro- merce will profoundly impact the Also, despite a history of turbu- jects to accommodate deeper draft ongoing viability and vitality of Dela- lence in Philadelphia, since the 1990s requirements of new container ships ware River ports. Containerization is the port labor force has embodied beyond 45 feet. driving rapid growth of waterborne stability and flexibility that has be- cargo shipments, while trade ration- Shipping lines have also sought to come a strategic advantage. The port alization and shifting trade routes achieve efficiencies through “trade has not experienced a labor strike in have increased the attractiveness of rationalization.” With congestion and over a decade, and Philadelphia’s 19 East Coast ports. These factors, cou- gas prices increasing the cost of labor “start times” accommodate the pled with strategic action, present an moving cargo by land, shippers are demands of time-conscious shipping opportunity for the region’s port seeking to maximize the proportion lines, increasing the port’s competi- industry to grow its business. of total cargo movement that occurs tiveness. by water, thereby minimizing total The ability of Delaware River In addition, while other ports face unit shipping costs. And, in the ports to capture additional market severe congestion issues, Delaware United States, trade rationalization share of maritime cargo is related to River ports are relatively uncon- has occurred in response to the cost its competitive strengths and weak- strained by either terminal or inter- of “land-bridging” cargo from West nesses as a port of call. Delaware modal congestion. This is due in part Coast ports to central and eastern River ports are, in some respects, to an expansive network of road and parts of the country by rail or long- well-positioned to benefit from in- rail infrastructure that is directly con- haul trucking. creased cargo shipments. For exam- nected to many of the region’s port ple, the region’s proximity to the Trade rationalization has in- facilities. most dense population base in the creased the demand for container capacity at East Coast ports. Intensi- Average Annual Growth Rates in Container Traffic fying this trend is congestion in the by North American Port Region, 1990-2005 Panama Canal, which has capacity constraints that will not be alleviated North American Port Region 1990-1995 1995-2000 2000-2005 until its expansion project is com- Pacific CN 6.33% 18.75% 11.71% pleted (scheduled for 2014). In the Atlantic CN 1.71% 7.12% 3.30% meantime, shipping lines are increas- North Atlantic 4.36% 4.58% 8.14% ingly relying on the Suez Canal to South Atlantic 12.08% 7.17% 2.79% ship cargo from Asian markets to the North Pacific 6.17% 2.06% 6.09% United States. This shift has made South Pacific 7.01% 10.08% 7.94% East Coast destinations even more Island Pacific 8.29% -8.42% 16.18% attractive as a primary port of call. Gulf 7.61% 7.30% 5.20%

Total United States 7.48% 6.35% 6.66%

Total North America 7.11% 6.73% 6.71%

5 EXECUTIVE SUMMARY

Finally, the region possesses the nanas), juices, and cocoa beans. ability to compete with top-tier ports infrastructure to support shipment of On the other hand, Delaware for shipments on the new generation “niche” cargos that require special- River ports do struggle with factors of container mega-ships that require ized terminal and storage infrastruc- that limit growth potential. For ex- 45 and 50-plus foot drafts. The im- ture. Refrigerated warehouse facilities ample, the region’s inland location minent execution of a project part- and other supporting infrastructure is requires a 60 to 100 mile trek from nership agreement between the Army expensive and difficult to replicate; as the Atlantic Ocean, a distance that Corps of Engineers and the Com- a result, Delaware River ports have increases travel time and shipping monwealth to dredge the Delaware become the country’s preeminent cost. Also, the Delaware River’s 40- River channel to 45 feet was a critical port of call for perishable products foot channel is shallow relative to first step for the region to simply such as fresh fruit (especially ba- competitor ports, limiting the ports’ maintain its existing port business. Delaware River ports’ paucity of 100-mile and 500-mile Radii from Philadelphia Asian shipping service is noteworthy given the dramatic growth of Asian markets. This shortcoming has limited the region’s ability to benefit from increased global containerization. Greater Philadelphia’s weak export market is also a liability, limiting shippers’ ability to minimize unit shipping costs by backhauling cargo out of port. Additionally, while expansive, the region’s landside infrastructure has limited connectivity to inland distribution markets. Of note is the region’s inadequate “double stack” rail clearance. Double-stacking containers on railcars has become the dominant mode for moving cargo from the port to inland destinations because it doubles rail container capacity at no additional cost. Greater Philadelphia’s freight rail lines are constrained by low bridge clearances that preclude efficient use of double stacked trains, putting Delaware River ports at a significant competitive disadvantage for servicing Mid- western U.S. growth markets. Finally, Delaware River ports’ growth potential is constrained by disjointed planning, marketing, and development. Lack of collaboration among Delaware River ports has led to intra-port complex competition for business and has limited the region’s ability to strategically plan for the future. Both factors have thwarted attempts to rationalize the use of port facilities and created inefficiencies that limit growth potential.

6 EXECUTIVE SUMMARY

Recommended Strategies for ⇒ Investment in infrastructure ments. Port Growth enhancements, especially termi- ⇒ Scenario 2: Moderate growth. nal container capacity and road This scenario requires that the The potential for Delaware River and rail condition and connec- region collaborate to keep pace ports to grow will depend on their tions. with competitor port invest- ability to leverage strengths and man- ⇒ Collaboration for the efficient ments and leverage existing age weaknesses. Doing so will re- cargo-handling strengths. Short quire objective analysis to guide stra- deployment of resources, espe- of significant infrastructure in- tegic planning efforts. This planning cially to rationalize the use of vestment, the scenario also re- should consider: facilities and coordinate marketing efforts in a region-wide man- quires that future economic ⇒ Cargo segments handled by ner. trends swing in the region’s fa- Delaware River ports; vor. ⇒ Cargo demand on the U.S. East ⇒ Scenario 3: Declining market Coast; Scenarios for Port Growth share by one percent. This sce- ⇒ Existing cargo capacity; and Based on global trends and the nario may be realized if the ports ⇒ Existing geographic and infra- Delaware River’s competitive posi- maintain the status quo of dis- structure limitations. tion (which assumes the anticipated jointed development and fail to From this plan, Delaware River Delaware River channel-deepening collaborate around a strategic ports will be able to identify strategic project), the study team developed plan for the future. opportunities to grow business. In three potential scenarios for port general, the strategy for growth growth: should be built around three core ⇒ Scenario 1: Growing market principles: share by one percent. This sce- ⇒ Leverage existing competitive nario depends on successful im- strengths, especially geographic plementation of the framework proximity to the large consumer for a strategic plan outlined in market of the U.S. northeast and this report and careful manage- a difficult-to-replicate expertise ment of such risks as accelera- in niche cargo handling; tion of competitor port invest-

Summary of Growth Scenarios

Scenario 1: Scenario 2: Scenario 3: Factors Growing Market Share Moderate Growth Declining Market Share

♦ Delaware River ports increase ♦ Delaware River ports share of the share of U.S. waterborne ♦ All cargo growth at 0.9 percent U.S. waterborne commerce Assumptions commerce from 5.5 percent to ♦ Container growth at 4.4 per- decreases from 5.5 percent 6.5 percent of the national cent, equal to the national rate to 4.5 percent of the U.S. market market ♦ Transit times and cost to serve inland markets are improved ♦ Petroleum import levels must be maintained ♦ Growth in niche cargo Requirements ♦ Bulk and breakbulk cargoes ♦ None ♦ Regional coordination in remain dominant, particularly marketing and capacity steel and perishables management ♦ Absence of economies of scale ♦ Improved capacity and transpor- ♦ Acceleration of global shift to ♦ Continued containerization alternative fuels trends Risks tation networks at competitor ports ♦ Weak regional economic and ♦ Decline in niche cargoes ♦ Distance from Asian manufactur- demographic growth ♦ Lack of goods to export ing centers ♦ Leverage existing competitive strengths ♦ Leverage existing competitive ♦ The absence of coordination to leverage existing assets Strategies ♦ Strategic infrastructure invest- strengths and improve transportation ment ♦ Regional collaboration networks ♦ Regional collaboration

7 INTRODUCTION AND PROJECT PARTNERS Introduction For more than 300 years, the trends on the nature of maritime from Trenton, NJ and Bucks County, Delaware River has served as a key commerce in Greater Philadelphia is PA to the ocean. Its analysis included commercial highway for the region, essential for making smart and ap- a review of dynamic factors impact- facilitating the import and export of propriate policy and investment deci- ing maritime commerce in Greater raw and manufactured products from sions. Philadelphia and a discussion of trends and policies that may alter the region and beyond. Over time, To this end, the Philadelphia In- anticipated future activity. Delaware River port activity has been dustrial Development Corporation a key component in perpetuating (PIDC) sponsored a study of maritime The resulting report presents Greater Philadelphia’s role as a com- commerce in Greater Philadelphia and findings from this research. It does mercial hub, supporting industrial commissioned the Economy League not seek to evaluate the costs and development and thousands of port- of Greater Philadelphia to conduct the benefits of any particular port devel- related local jobs. analysis. The Economy League assem- opment proposal; rather, the report is While Greater Philadelphia’s bled a study team that consisted of a intended to instruct decisions regard- maritime roots remain, rapid global- partnership with the Economic Devel- ing investment and land use along the ization and technological advances opment Research Group (EDR) and Delaware Riverfront, and offer context are driving an industry-wide transfor- assistance from Select Greater Phila- and insights to guide the critical future mation that has had an impact on the delphia and the Delaware Valley Re- choices to be made by government role that Delaware River ports play in gional Planning Commission. and business stakeholders. the larger economy. Understanding The study considered port activity the impact of ever-evolving industry on both sides of the Delaware River,

Project Partners Economy League of Greater Philadelphia The Economy League of Greater Philadelphia (ELGP) is an independent, nonpartisan, nonprofit organization dedicated to research and analysis of the region's resources and challenges with the goal of promoting sound public policy and increasing the region's prosperity. Philadelphia Industrial Development Corporation Philadelphia Industrial Development Corporation (PIDC) is a private, not-for-profit Pennsylvania corporation, founded in 1958 by the City of Philadelphia and the Greater Philadelphia Chamber of Commerce, to promote economic development throughout the city. Economic Development Research Group Economic Development Research Group, Inc. (EDR Group) is a consulting firm focusing specifically on applying state- of-the-art tools and techniques for evaluating economic development performance, impacts and opportunities. The firm was started in 1996 by a core group of economists and planners who are specialists in evaluating impacts of transportation infrastructure, services, and technology on economic development opportunities. Select Greater Philadelphia A business marketing organization, Select Greater Philadelphia focuses on building the economy of our region by attracting and retaining businesses. The Greater Philadelphia region encompasses Southeastern Pennsylvania, Southern New Jersey, and Northern Delaware. Delaware Valley Regional Planning Commission Serving the Greater Philadelphia region for more than 40 years, the Delaware Valley Regional Planning Commission works to foster regional cooperation in a nine-county, two state area. City, county and state representatives work together to address key issues, including transportation, land use, environmental protection and economic development.

8 SECTION 1: ECONOMIC IMPACT ANALYSIS Section 1: Economic Impact Analysis

Key Findings tion. Employment ⇒ The 6,094 regional port workers ⇒ Employment impacts associated The port industry’s regional job subject to the City of Philadel- base is relatively small, but those with Delaware River port activity phia Wage Tax produce $11.6 include: 1) direct maritime industry jobs generate higher than aver- million in Wage Tax revenues. age income and output per job. jobs; 2) indirect jobs supported by ⇒ Delaware River ports employ maritime industry demand; and 3) induced jobs supported by direct 4,056 workers who earn $326 Overview million and generate $1.3 billion maritime worker re-spending. in economic output. Delaware River ports add value to As Figure 1 illustrates, Delaware ⇒ The vast majority of regional Greater Philadelphia’s economy. This River ports employ 4,056 workers direct port employment is in section explores the magnitude and across Greater Philadelphia. Sector- nature of this value by considering cargo handling and warehousing. based direct employment analysis4 both region-wide and city-specific ⇒ Each direct port job supports an indicates that slightly fewer than half economic impacts. Using an industry additional two jobs from indus- (1,911) of direct port jobs are in -standard input-output model, the cargo handling, and another fourth try demand and worker reanalysis quantifies economic impacts spending, resulting in a region- of the jobs are in warehousing (987). in terms of jobs, labor income, eco- wide port-related employment With a multiplier of 3.0, direct port nomic output (e.g., sales), and tax employment supports 4,655 indirect total of 12,121. revenues. On-site employment data ⇒ Petroleum-based port activity, and 3,410 induced jobs for a total for Delaware River ports were as- employment impact of 12,121 jobs. while generating a majority of sembled through discussions with the Delaware River’s cargo traf- private terminal operators, coopera- Petroleum-based regional em- fic, constitutes less than 10 per- tion from public port agencies, port ployment. While petroleum consti- cent of the region’s port-related directory references, and employ- tutes a majority (both in tons and employment. ment estimates obtained through value) of Delaware River cargo traf- ⇒ City of Philadelphia ports repre- proprietary databases. (See Appendix fic, petroleum-based direct port em- sent approximately 45 percent of C for a full methodological descrip- ployment represent approximately 10 region-wide employment, labor tion. See Appendix D for a summary percent, or 455, of the region’s 4,056 income, and economic output. of an additional set of “port-reliant”2 direct port jobs. This disparity is due ⇒ Regional port activity generates employment.) in large part to the non-labor- $69 million in tax revenues for intensive nature of importing petro- state governments in Greater leum, a distinction that is akin to the Philadelphia, however its net Greater Philadelphia labor intensity of pumping gas into a fiscal impact is somewhat less Delaware River port activity adds car as opposed to hauling numerous pronounced due to subsidiza- value to the regional economy by grocery bags out of the trunk.3 creating and supporting jobs across Labor Income Figure 1: Greater Philadelphia the 11-county, tri-state Greater Phila- Delaware River port employment Employment Impacts, 2005 delphia area. (See Appendix C for a list of counties included in the re- generates income that is distributed Jobs gion.) throughout the regional economy. Employment Impact Type by Sector As Figure 2 illustrates, the re- Direct (Maritime/Port Activity) 4,056 gion’s 4,056 direct port workers earn Construction 318 Wholesale 36 Cargo Handling 1,911 Figure 2: Greater Philadelphia Economic Impacts, 2005 Warehousing 987 Security 99 Employment Impact Type Other Government 152 Federal Government 553 Direct Indirect/Induced Total Indirect (Industry Demand) 4,655 Employment 4,056 8,065 12,121 Induced (Worker Spending) 3,410 Labor Income $326 million $446 million $772 million Total 12,121 Economic Output $1.3 billion $1.1 billion $2.4 billion Note: Economic impact calculations using IMPLAN model. Notes: Economic impact calculations using IMPLAN model; labor income and economic output are presented in 2006 dollars.

9 SECTION 1: ECONOMIC IMPACT ANALYSIS

$326 million, a total that includes a total regional economic output im- Labor Income both wages and fringe benefits. With pact of $2.4 billion. As Figure 4 illustrates, Philadel- a multiplier of 2.4, direct labor in- phia’s 1,945 direct port workers earn come supports an additional $446 City of Philadelphia $142 million, a total that includes million in indirect and induced in- both wages and fringe benefits. With come for a region-wide labor income Port activity in the City of Phila- a multiplier of 2.4, direct labor in- impact of $772 million. The variation delphia constitutes approximately 45 come supports an additional $196 in multipliers (3.0 for employment; percent of region-wide employment, million in indirect and induced in- 2.4 for labor income) indicates that labor income, and economic output. come for a city-wide labor income employment directly related to port Employment impact of $338 million. activity boasts higher wages than the indirect and induced jobs supported As Figure 3 illustrates, City of Economic Output by industry demand and worker re- Philadelphia ports employ 1,945 Philadelphia’s 1,945 direct port spending. workers, slightly fewer than half of jobs generate $569 million in eco- regional direct port employment. The region’s direct port jobs rep- nomic output. With a multiplier of Mirroring the region’s sector-based resent an average income (including 2.1, port activity supports another employment, slightly fewer than half fringe benefits) of $80,000, more $472 million in economic output (870) of direct port jobs are in cargo than double the regional per capita related to indirect and induced jobs handling, and another fourth of the income. When indirect and induced for a total city economic output im- jobs are in warehousing (478). With a jobs are also considered, the average pact of $1.0 billion. multiplier of 2.8, direct port employ- income drops to $64,000, illustrating ment supports 2,336 indirect and the relatively high-paying nature of 1,229 induced jobs for a city employ- Tax Revenues the region’s maritime-industry jobs. ment impact of 5,510 jobs. The wages paid to direct, indirect, Economic Output The somewhat lower city employ- and induced port employees, as well Delaware River port activity cre- ment multiplier (2.8 for the city; 3.0 as the sales generated by maritime ates a ripple effect of sales through- for the region) is indicative of addi- commerce along the Delaware River, out the region. The aggregate impact tional “leakages” that occur for city are subject to taxation, providing of this activity is quantified as the employment impacts. This reflects revenues to state and local govern- ports’ economic output. the notion that city-related indirect ments in the region. and induced jobs are more likely to Greater Philadelphia’s 4,056 di- State Tax Revenues occur outside of the city than their rect port jobs generate $1.3 billion in regional equivalents are to occur out- As Figure 5 illustrates, state gov- economic output. With a multiplier side the region. ernments across Greater Philadelphia of 1.8, port activity supports another collect a total of $69 million in tax $1.1 billion in economic output re- Petroleum-based city employ- revenues from Delaware River port lated to indirect and induced jobs for ment. The city’s 1,945 direct port activity, including $44 million for jobs include 162 in petroleum, Pennsylvania, $18 million for New amounting to less than 10 percent of Jersey, and $7 million for Delaware. total direct jobs and mirroring the Figure 3: City of Philadelphia For Delaware and New Jersey, the Employment Impacts, 2005 region-wide proportion of petroleum largest source of port-related tax -based employment. Jobs revenue is Individual Income Taxes,

Employment Impact Type by while in Pennsylvania the General Sector Sales and Use Taxes slightly outpace Direct (Maritime/Port Activity) 1,945 Commonwealth Personal Income Construction 183 Tax receipts. Over one-third ($25 Wholesale 20 Cargo Handling 870 Warehousing 478 Figure 4: City of Philadelphia Economic Impacts, 2005 Security 41 Other Government 35 Employment Impact Type Federal Government 318 Direct Indirect/Induced Total Indirect (Industry Demand) 2,336 Employment 1,945 3,565 5,510 Induced (Worker Spending) 1,229 Labor Income $142 million $196 million $338 million Total 5,510 Economic Output $569 million $472 million $1.0 billion Note: Economic impact calculations using IMPLAN model. Note: Economic impact calculations using IMPLAN model; labor income and economic output are presented in 2006 dollars.

10 SECTION 1: ECONOMIC IMPACT ANALYSIS million) of state tax revenues are associated with port activity in the City Figure 5: Tax Revenue Impacts of Delaware River Ports and City of of Philadelphia. Philadelphia Ports, 2005 It should be noted that states in Type of Tax All Regional Jobs All City Jobs turn use taxpayer dollars to support Individual Income Taxes Delaware $ 2,538,803 $ 932,829 public port agencies, reducing the net New Jersey $ 6,679,380 $ 2,454,197 financial benefit to balance sheets. Pennsylvania $ 13,102,579 $ 4,814,266 For example, while the Common- General Sales and Use Tax wealth of Pennsylvania received ap- Delaware - - proximately $44 million in taxes as a New Jersey $ 5,326,255 $ 1,944,851 result of port activity in 2005, it also Pennsylvania $ 13,851,735 $ 5,056,706 spent roughly $10 million to subsi- Corporate Income Tax dize Philadelphia Regional Port Au- Delaware $ 888,055 $ 323,581 thority operations and $19 million New Jersey $ 1,988,447 $ 724,530 Pennsylvania $ 3,632,195 $ 1,323,463

for debt service obligations. Selective Sales Taxes City of Philadelphia Tax Revenues Delaware $ 1,075,499 $ 395,169 New Jersey $ 2,674,104 $ 982,543 The City of Philadelphia collects Pennsylvania $ 7,807,469 $ 2,868,689 tax revenue from port activity that Other State Taxes, Licenses and Fees occurs inside and outside the taxing Delaware $ 2,536,226 $ 924,124 jurisdiction. New Jersey $ 1,597,420 $ 582,052 Pennsylvania $ 5,199,444 $ 1,894,521 Wage Tax Revenues. The pri- City of Philadelphia mary source of the city’s port-related Wage Taxes (See Below) $ 11,649,603 $ 7,886,308 tax revenue is the Wage Tax, which Sales Taxes $ 731,330 $ 266,843 the city receives from both residents Total State and Local Taxes of Philadelphia and non-residents Delaware $ 7,038,582 $ 2,575,704 that work in Philadelphia. For the New Jersey $ 18,265,605 $ 6,688,173 Pennsylvania $ 43,593,424 $ 15,957,645 Wage Tax, taxable wages reflect an City of Philadelphia $ 12,380,933 $ 8,153,151 amount equivalent to labor income Total $ 81,278,544 $ 33,374,673 less fringe benefits and are assessed at two different rates based on place of residence: in 2006, the Philadel- City of Philadelphia Wage Tax Calculation phia resident rate was 4.301 percent, Wage Tax Rate Residents 4.301% and the non-resident rate was 3.7716 Non-Residents 3.7716% percent. Philadelphia Residents Of the 12,121 direct, indirect, and Employment 4,216 induced port-related regional jobs, Wages $183 million Wage Taxes Paid $7.9 million 4,216 (35 percent) hold residence in Non-Residents That Work in Philadelphia Philadelphia and generate $183 mil- Employment 1,878 lion in taxable wages. At the 2006 Wages $100 million resident tax rate, this produced $7.9 Wage Taxes Paid $3.8 million million in Wage Tax revenues. An- Total Wages $283 million other 1,878 (15 percent) of port- Total Wage Taxes Paid $11.6 million related employees work - but do not Effective Wage Tax Rate 4.11% Notes: Economic impact calculations using IMPLAN model; while employment figures are for 2005, wage tax rates used are live - in Philadelphia and pay the non for 2006. Wages are labor income less benefits and reflect Bureau of Economic Analysis (BEA) Place of Residence adjust- -resident Wage Tax rate. The $99.7 ment factors; totals may not add due to rounding. million in non-resident taxable wages produced $3.8 million in Wage Tax effective Wage Tax rate of 4.11 per- region-wide port activity, 36 percent revenues. cent. of which is directly related to city- specific port activity. In total, Philadelphia Wage Tax Sales Tax Revenues. The city rates were assessed on 6,094 workers also recoups revenue from its one and $283 million of taxable wages, percent Sales Tax. The city generates producing $11.6 million in tax reve- over seven-hundred thousand dollars nues for the city and reflecting an in annual Sales Tax revenues from

11 SECTION 2: DELAWARE RIVER PORT DESCRIPTIONS AND KEY COMPETITORS Section 2: Delaware River Port Descriptions and Key Competitors

Key Findings ⇒ Compete for cargo with other Containerization East Coast ports, including the Delaware River ports: Philadelphia’s industrial decline Port of New York/New Jersey, ⇒ coincided with the rise of alternative Have historically struggled to Baltimore, and Virginia. These keep pace with the ever-evolving global supplier markets, spurred on ports have key locational, market, in large part by dramatic post-World maritime industry. and infrastructure advantages and ⇒ Are comprised, in part, of public War II advancements to cargo ship- been more aggressive than the ping. In particular, the advent of facilities owned by three state-run Delaware River in infrastructure entities: the Philadelphia Regional containerization in 1956 dramatically investment to attract new busi- improved the efficiency of goods Port Authority (Pennsylvania); the ness, particularly in the growing South Jersey Port Corporation movement. Employing a standard- global container market. ized box for moving cargo, contain- (New Jersey); and the Diamond State Port Corporation ers simplified cargo handling, thereby (Delaware). Dozens more facili- Delaware River Ports in lowering overall costs of goods 2 ties are owned and operated by Historical Context movement. Over the second half of th private entities. the 20 century, containerization Greater Philadelphia commercial grew to become the predominant ⇒ Are constrained by an inland, up- activity originated along the Dela- means for general cargo movement, river location and naturally shal- ware River. William Penn selected driving rapid growth in trade across low channel. the location for his settlement based all modes of goods transport. How- ⇒ Have experienced growth in busi- on proximity to the river for com- ever, by far the most pervasive im- ness but a decline in market share. merce and inland location for safe pact of container shipping was on ⇒ Are noted for their large share of harbor and access to the region’s maritime commerce. By increasing petroleum imports and for niche resource-rich hinterlands. the cost effectiveness of overseas commodities such as fresh fruit These assets fueled growth in shipping, containerization stimulated and cocoa beans. maritime commerce through the 18th dramatic growth in waterborne trade ⇒ Have capacity for container ship- century, during which time Philadel- and became a key driver in economic ments but are not primary ports- phia rose to premier port status as globalization. of-call. the third largest port in the British Containerization changed the ⇒ Trade primarily with African mar- Empire behind London and Liver- economics of shipping. Efficiencies kets, owed in large part to the pool. The Industrial Revolution ac- resulting from the use of standard region’s preeminence in petro- celerated Philadelphia’s rise in the container boxes drove demand for leum imports. The Delaware 19th century. Steam locomotives the construction of larger ships that River has virtually no trade rela- provided access to the Lehigh Val- could take advantage of economies tionship with Asia, the largest ley’s vast coalmines, and manufactur- of scale. In turn, this new breed of global growth market. ing activity in the city stimulated the ship accelerated the pressure to mod- ⇒ Have imports that far outpace market for both imports and exports. ernize port facilities by imposing a exports, resulting in a drastic im- new set of terminal requirements that port-export imbalance. But by the turn of the 20th century, Philadelphia’s prominence as a rendered older-style finger piers ob- commercial hub had waned. Manu- solete. Many of Philadelphia’s com- Figure 6: 1978 Forecast for Port petitor ports aggressively responded of Philadelphia Containerization facturing activity moved to less costly regions and the demand for anthra- by initiating expensive efforts to Forecasted Actual adapt and expand terminal facilities Year cite coal slackened. Hastening the TEUs TEUs decline was Philadelphia’s failure to to meet the demands of container 1972 43,512 keep pace with demands for infra- vessels. 1975 86,148 structure modernization. This short- Efforts to Keep Pace 1978 126,000 n/a coming put the port at a competitive disadvantage. (A more complete his- Philadelphia reacted slowly to the 1980 211,000 124,339 tory of Delaware River maritime demands of containerization. Strug- 1990 353,000a 65,309 commerce is available in Appendix gling to compete, in 1965 the city partnered with the Commonwealth Source: Philadelphia Commerce Department, Philadelphia B). Port Facilities Study, 1978. of Pennsylvania and Greater Phila- Notes: (a) - Based on the Commerce Department study’s standard of an average of 11 tons per container.

12 SECTION 2: DELAWARE RIVER PORT DESCRIPTIONS AND KEY COMPETITORS

delphia Chamber of Commerce to that the containerized proportion of more than 40 public and private port replace the Department of Wharves, Philadelphia’s overall cargo would facilities. As Figure 9 illustrates, Docks, and Ferries with the Philadel- reach 60 percent by 1990, effectively Delaware River port facilities line phia Port Corporation (PPC). The quadrupling the city’s container traf- both sides of the Delaware River formation of the PPC was consid- fic.6 from Delaware to Trenton, NJ. For ered critical to keep up with the de- maps of individual Delaware River By the mid-1980s it was apparent mands of technological advance- port facilities, see Appendix H. that Philadelphia would not realize ments of maritime commerce. It cre- the Commerce Department’s bullish Public Port Facilities ated a more accommodating govern- projections. Globally, the containeri- ance structure and enhanced access Aside from petroleum facilities zation revolution was driving growth to capital that provided for swifter (which represent nearly 80 percent of of container ships in both size and and more flexible pursuit of infra- waterborne trade by volume on the number. With larger ships requiring structure improvements to port fa- Delaware River), state-owned facili- deeper channels and shipping lines cilities. ties have the highest volume of Dela- looking for quicker turnaround ware River port operations. Three The PPC oversaw the develop- times, the port’s inland location - public entities own and either oper- ment of Philadelphia’s two container nearly 100 miles up the Delaware ate or lease port facilities covering terminals, the Packer Avenue Marine River, which featured a naturally nearly 1,000 acres, including: Terminal (PAMT), completed eleven shallow channel - became an increas- years after the first container ship’s ingly significant liability. Moreover, ⇒ The Port of Philadelphia; voyage in 1967, and Tioga Marine while PAMT and TMT established ⇒ The Port of Camden; and Terminal (TMT), completed five Philadelphia as a player in the con- ⇒ The Port of Wilmington. years later in 1972. With PAMT and tainer game, several other East Coast Port of Philadelphia. In 1990, TMT online, Philadelphia had en- ports modernized their infrastructure the Commonwealth of Pennsylvania tered the market to compete for a more quickly and aggressively, in- purchased the city’s public port facili- share of the container business. creasing their competitiveness vis-à- ties and created the Philadelphia Re- vis Philadelphia. In 1978, the Philadelphia Depart- gional Port Authority (PRPA) to re- ment of Commerce released a study place the PPC. PRPA owns and acts that analyzed the city’s port facilities Delaware River Port as landlord for Packer Avenue and Tioga Marine Terminals, Piers 38/40, and presented a strategy for future Descriptions development. Citing significant 78/80, 82, 84, 96 and 98 Annex. growth in container traffic and a Today, the Delaware River serves Since its inception, the PRPA has trend towards containerization of as a 100-mile “marine highway” for initiated several upgrades to these previously non-containerized general cargoes, the study concluded that PAMT and TMT in their existing Figure 7: Philadelphia Regional Port Authority Facilities state would reach container capacity by 1984 and require significant up- Name Location Acreage Specialized Cargoes grades and expansion to satisfy fu- Packer Avenue Columbus Blvd. at Containers, steel products, frozen meat, ture container demand. Between 106 1972 (the year of TMT’s establish- Marine Terminal Packer Ave. fruit, heavy lift, project, paper Columbus Blvd. at Newsprint, coated paper, wood pulp, ment) and 1975, container traffic at Piers 38/ 40 12 Philadelphia ports doubled, from Christian St. other forest products Columbus Blvd. at Newsprint, coated paper, wood pulp, 43,512 Twenty-Foot Equivalent Piers 78/ 80 40 Units (TEUs), the standard capacity Snyder Ave. other forest products measure for containers, in 1972 to Columbus Blvd. Pier 84 between Oregon 23 Cocoa beans and cocoa products 86,148 in 1975. Ave.& Jackson St. At the same time, containeriza- Pier 96 & 98 Columbus Blvd. at 55 Automobiles, project, heavy equipment tion of the region’s existing cargo Annex Oregon Ave. Containers, refrigerated fresh fruit, paper, flows increased the share of contain- Tioga Marine Delaware River & 97 plywood, cocoa beans, autos, palletized, erized cargo in Philadelphia from 16 Terminal Tioga Street project, breakbulk and steel percent in 1972 to 23 percent in Columbus Blvd. 1975. Citing concurrent shifts at Fruits and vegetables, break bulk, project, Pier 82 between Oregon 18 paper competitor ports, the study projected Ave. & Jackson St.

Source: Philadelphia Regional Port Authority.

13 SECTION 2: DELAWARE RIVER PORT DESCRIPTIONS AND KEY COMPETITORS

chase of a $5.6 million multipurpose Figure 8: South Jersey Port Corporation Facilities crane, creation of a $27.5 million auto and RoRo berth, and construc- Name Acreage Specialized Cargoes tion of two new storage warehouses.8 Beckett Street Wood product, steel products, cocoa beans, containers, 125 Terminal iron ore, furnace slag, scrap metal Unlike the Ports of Philadelphia Petroleum coke, furnace slag, dolomite, other dry bulks, and Camden, the Port of Wilming- Broadway 180 steel products, wood products, minerals, cocoa beans, Terminal ton’s operations occur at a single site and fresh fruit on 308 acres. The Port of Wilming- Broadway 26 Bananas, pineapples, other perishables Produce Terminal ton features ten berths, including Paulsboro (Planned) — — seven deepwater general cargo Port Of Salem — — berths, two RoRo and auto berths,

Source: South Jersey Port Corporation. and one tanker berth. Additionally, the Port of Wilmington features six separate warehouses that provide port facilities, including the addition In total, SJPC facilities feature upwards of 800,000 square feet of of on-dock warehouse space at the eight berths: four at Beckett Street, chilled and freezer storage space, and Tioga Marine Terminal and new two at Broadway, and one each at 16,000 extra square feet of controlled warehouse space and refrigeration at Salem and Broadway Produce. SJPC atmosphere capability. The facility the Pier 82 site. also boasts more than 2.2 million also has two multi-purpose gantries, square feet of dry warehouse space Today, Packer Avenue and Tioga each with 50-ton capacity, and one and three temperature controlled facilities each have six berths and one heavy-lift gantry with 75-ton capabil- facilities at the Broadway Produce roll-on-roll-off (“RoRo”) berth. ity. Wilmington’s key cargoes are Terminal. All SJPC facilities are PRPA’s other facilities have one to autos, fruit, juice, meat, paper, salt, within close proximity to I-676, I-76, three berths. Additionally, PRPA and steel. boasts more than 2.3 million square US Rte. 130, and I-295. Regarding landside transporta- feet of refrigerated storage space at In recent years, private operators tion, Wilmington is primarily ser- Packer Avenue and Tioga as well as have made significant investments to viced by trucks and is situated in significant dry and heated space at its these facilities, including over $50 close proximity to I-495 and I-95. other facilities. The facilities have million in expansion projects at the From a regional perspective, the close access to Interstates 76 and 95 Broadway Terminal in the past dec- port’s principle locational advantage and are served by three railroads: ade. Additionally, in 1994 the SJPC is its 65-mile proximity to the Atlan- Norfolk Southern, Canadian Pacific, entered into an agreement to operate tic Ocean; Philadelphia and Camden and CSX. the Port of Salem in New Jersey, ex- are 90-100 miles upriver. Port of Camden. Established in panding its scope of operations 1834, the Port of Camden has devel- south.7 Further expansions are Private Port Facilities planned, including a new two-berth oped into a niche port that special- The remainder of the region’s facility at the Port of Paulsboro. izes in breakbulk cargo. A national port facilities are owned and oper- leader in the import of cement, ply- Port of Wilmington. Established ated by private firms and play a sig- wood, fresh fruit, and cocoa beans, in 1923, the Port of Wilmington is a nificant role in Delaware River mari- Camden is also the region’s primary national leader in the import of fresh time commerce. They include opera- exporter, shipping hundreds of thou- fruit (particularly bananas) and juice tions at: sands of tons of scrap metal each concentrate and is currently the mid- ⇒ Port of Chester (Penn Termi- year. Atlantic regional port of discharge nals); for Volkswagen of America. Its con- The South Jersey Port Corpora- ⇒ Port of Bucks (Kinder Morgan, tainer operations have rapidly grown tion (SJPC), a state-created entity, has Riverside, and Waste Manage- in recent years. managed the Port of Camden since ment); 1928. SJPC’s primary port facilities In 1995, the State of Delaware ⇒ Gloucester Marine Terminal include the Beckett Street Terminal, purchased the port from the City of (Gloucester Terminals LLC); and opened in 1931, and Broadway Ter- Wilmington and created the Dia- ⇒ Oil refineries. minal, opened in 1971. Additionally, mond State Port Corporation Port of Chester. At the Port of SJPC owns the Broadway Produce (DSPC) to manage and operate the Chester, Penn Terminals has retrofit- terminal and another terminal in Sa- port. Since its inception, the DSPC ted a former Sun Shipbuilding yard lem, New Jersey. has guided the port through a series to handle both container and break- of improvements, including the pur-

14 15 Figure 9: Delaware River Port Facilities

OMPETITORS C EY K AND

ESCRIPTIONS D ORT P IVER R ELAWARE 2: D

Port of Wilmington ECTION S SECTION 2: DELAWARE RIVER PORT DESCRIPTIONS AND KEY COMPETITORS

bulk cargo. Since purchasing the Overall, the port’s principle car- is a leading American port complex property in the 1980s, Penn Termi- goes include steel, and salt, and pro- for petroleum imports.

nals refurbished two dry storage ject cargo (windmill materials, warehouses and developed 80,000 mostly). Facilities are situated in Delaware River Port Activity: square feet of refrigerated storage close proximity to the Pennsylvania Recent Trends space, increasing the terminals’ total Turnpike, I-95, and U.S. Route 1. reefer (refrigerated storage) capacity Delaware River port facilities Gloucester Marine Terminal. to 100,000 square feet. overall activity has increased. Nearly Gloucester Marine Terminal is situ- 3,000 ships called upon the Delaware These facilities support the han- ated below the Walt Whitman Bridge River in 2006, up ten percent over dling of Penn Terminals’ key cargoes, in New Jersey and is operated by 1995. As Figure 10 illustrates, a 58 including bananas, steel, forest prod- Gloucester Terminals LLC, with op- percent increase in container ship- ucts, and project cargo. The 71-acre erations supported by Holt Logistics ments drove overall growth. (See facility is situated between Philadel- (Holt also supports the operations of Appendix G for 2006 vessel calls at phia and Wilmington and approxi- Greenwich Marine Terminals LLC at individual Delaware River port facili- mately 2 miles from I-95. PRPA’s Packer Avenue facility). The ties.) facility has 22 warehouses, half of Port of Bucks. Formerly the U.S. which are refrigerated and frozen Containers Steel “Fairless Hills” site, the Port of storage space. Bucks is situated 29 miles north of The Port of Philadelphia captured Philadelphia and is entirely privately Gloucester’s key cargoes include a portion of the growth in regional owned. The port is now part of what containers, steel products, frozen container shipments. As Figure 11 is called the Keystone Industrial Port meat, fruit, heavy lift, and project illustrates, after bottoming out at Complex (KIPC), with facilities di- cargo. Its 150-acre site is close to the 65,309 TEUs in 1990, Philadelphia recovered to break 100,000 TEUs in vided between Kinder Morgan, Inc. Walt Whitman Bridge, I-95, and I-76. and Waste Management. Nearby, 1995 and 200,000 in 2005. Oil Refineries. Private petroleum Riverside Concrete also has port op- operations in Delaware City, Chester, Nevertheless, Philadelphia’s con- erations but is not part of the KIPC. and Philadelphia account for the vast tainer growth pales in comparison to The port’s operations are coordi- majority of the region’s annual ton- other ports. Between 1985 and 2005, nated by the Bucks County Interna- nage and cargo value. Large oil com- Philadelphia’s share of East Coast tional Trade Council, a body founded panies, including Sunoco and BP, and U.S. container traffic dropped by the county’s five chambers of have operations along the Delaware by more than half, from 2.60 to 1.09 commerce, that serves as a de facto River. As a result, the Delaware River percent of the East Coast market and port authority for the county.

Figure 10: Delaware River Ports Vessel Calls by Cargo Type, 1995-2006

Roll-On/ Chemicals/ Year General Containers Refrig. Bulk Tankers Autos Passenger Totals Roll-Off Gas 1995 304 368 84 333 405 812 138 110 16 2,570 1996 332 448 58 321 411 770 119 79 23 2,561 1997 317 533 70 318 419 798 140 40 13 2,648 1998 380 632 76 372 462 902 154 95 22 3,095 1999 392 478 41 487 452 872 145 102 20 2,989 2000 400 397 64 458 399 873 155 116 28 2,890 2001 352 376 82 455 381 831 166 126 28 2,797 2002 340 359 75 444 349 852 99 121 12 2,651 2003 330 321 78 465 608 858 86 120 28 2,594 2004 330 340 91 456 329 877 86 92 36 2,637 2005 279 441 77 392 358 897 107 108 41 2,700 2006 248 581 78 373 402 861 144 121 39 2,847 Change, -56 213 -6 40 -3 49 6 11 23 277 ‘95-’06 % Change, -18.4% 57.9% -7.1% 12.0% -0.7% 6.0% 4.3% 10.0% 143.8% 10.8% ‘95-’06 Source: OCS, 2006. Notes: “Other” category includes Port of Albany, NY, Providence,RI, New Haven and Bridgeport, CT, and Camden-Gloucester NJ.

16 SECTION 2: DELAWARE RIVER PORT DESCRIPTIONS AND KEY COMPETITORS

from 1.12 to 0.49 percent of the U.S. Figure 11: Port of Philadelphia and Wilmington Total TEUs market. as a Share of East Coast and U.S. Markets, 1985-2005 While Philadelphia lost ground, Wilmington approximately tripled its Philadelphia Wilmington Share of Share of Share of Share of Year Total TEUs Total TEUs TEU share between 1985 and 2005, East Coast U.S. East Coast U.S. increasing from 0.47 to 1.33 percent 1985 104,522 2.60% 1.12% 18,790 0.47% 0.20% of the East Coast market and from 1990 65,309 1.13% 0.48% 91,623 1.58% 0.67% 0.20 to 0.60 percent of the U.S. mar- 1995 107,094 1.23% 0.53% 156,940 1.81% 0.78% ket. Wilmington’s rapid ascent in the 2000 198,680 1.70% 0.73% 192,091 1.64% 0.70% container business represented the 2005 204,912 1.09% 0.49% 250,507 1.33% 0.60% largest proportionate growth among Source: AAPA; Notes: Unavailable for Chester, Camden, and Paulsboro. the 20 largest U.S. container ports during that time period.9 Wilmington witnessed growth in ton- shippers of perishable cargo. As a Despite overall growth, contain- nage market share over this period. result, Delaware River ports import ers remain a small proportion of Between 1985 and 2005, Camden’s nearly half of the nation’s cocoa Delaware River port activity. As Fig- tonnage share grew from 1.08 to 1.32 beans, almost a third of the bananas, ure 12 illustrates, container trade ac- percent of the East Coast market and and a quarter of all fruit and nuts. counts for 5 percent of Philadelphia’s from 0.29 to 0.33 percent of the U.S. Still, the region’s biggest com- tonnage and 19 percent of its cargo market. Wilmington’s East Coast modity is petroleum. While the re- value, well below the national aver- share grew from 0.56 to 1.44 percent gion’s perishable imports boast large ages of 16 percent and 51 percent. and its U.S. share grew from 0.15 to share of national imports, their share Wilmington and Camden also fall 0.36 percent. Wilmington’s tonnage of total Delaware River activity is below the national averages. growth represented the second fast- dwarfed by that of the oil refineries. est proportionate increase of any Tonnage As Figure 14 illustrates, petroleum port on the East Coast. accounts for 65 percent of the re- In contrast to containers, Phila- Commodities gion’s import activity by value, while delphia ranks among top U.S. ports fruits and nuts account for just 4 in total tonnage, a volume measure While U.S. maritime commerce is percent. largely driven by bulk and breakbulk increasingly containerized, the Dela- activity, especially petroleum. In ware River’s cargo expertise remains A large share of Delaware River 2005, Philadelphia tonnage ranked in bulk and breakbulk cargo — com- exports is highly valued goods such 4th among East Coast ports and 19th modities that are shipped by means as motor vehicles, petroleum, and among U.S. ports. But as Figure 13 other than containers. In particular, military supplies. Philadelphia has illustrates, Philadelphia lost tonnage Delaware River ports have carved been designated as one of 14 United market share between 1985 and out a niche in perishable cargoes.10 States “ports of strategic military sig- 2005, declining from 7.7 percent to Shippers are drawn to the region’s nificance.” As a result, the port ships 6.7 percent of the East Coast market agglomeration of refrigerated storage supplies to international posts and and from 2.06 percent to 1.66 per- facilities. The region’s streamlined sees the return of equipment and cent of the U.S. market. U.S. Customs systems allow for ex- vehicles for repair and refurbish- pedited transport, another attractive ment. On a smaller scale, Camden and element for time and cost-conscious Figure 12: Containers as a Percentage of Port Trade, 2005 Figure 13: Philadelphia, Wilmington, and Camden Tonnage as a Share of East Coast and U.S. Markets, 1985-2005 % % Container Container Port Philadelphia Wilmington Camden Trade Trade (Weight) (Value) Share Share Share Share Share Share Tonnage Tonnage Tonnage Year of East of of East of of East of (000s) (000s) (000s) Philadelphia, PA 5% 19% Coast U.S. Coast U.S. Coast U.S. Wilmington, DE 7% 7% 1985 32,690 7.72% 2.06% 2,362 0.56% 0.15% 4,573 1.08% 0.29% Chester, PA 10% 47% 1990 41,830 8.99% 2.03% 4,209 0.90% 0.20% 4,379 0.94% 0.21% Camden, NJ 13% 17% 1995 40,634 9.08% 1.92% 4,273 0.96% 0.20% 5,919 1.32% 0.28% Paulsboro, NJ 0% 0% 2000 43,855 7.97% 1.85% 5,184 0.94% 0.22% 5,171 0.94% 0.22% U.S. Total 16% 51% 2005 39,365 6.70% 1.66% 8,445 1.44% 0.36% 7,732 1.32% 0.33% Source: U.S. Census Foreign Trade Division. Source: AAPA; Notes: Unavailable for Chester, Camden, and Paulsboro.

17 SECTION 2: DELAWARE RIVER PORT DESCRIPTIONS AND KEY COMPETITORS

Figure 14: Top Five Imports and Exports Figure 15: Trading Partners by for Delaware River Ports and U.S. by Value, 2005 Percentage of Total Trade, 2005

Delaware Delaware River U.S. Export Trade Partners U.S. % Delaware River Exports U.S. Exports River % of Export Share Share (by weight) of Trade Motor Vehicles 31% Industrial Machinery 14% Trade Petroleum Products 12% Motor Vehicles 10% Asia 3% 22% Precious Stones & Metals 7% Petroleum Products 7% Africa 43% 13% Industrial Machinery 6% Organic Chemicals 7% North America 7% 17% Plastics 6% Plastics 6% South America 16% 18% Delaware River U.S. Import Middle East 13% 11% Delaware River Imports U.S. Imports Import Share Share Europe 15% 16% Petroleum Products 65% Petroleum Products 27% Australia/Oceania 1% 1% 7% 13% Iron & Steel Motor Vehicles Central America 2% 2% Fruit & Nuts 4% Industrial Machinery 11% Total 100% 100% Meat 3% Elec. Machinery 7% Source: U.S. Army Corps of Engineers. Industrial Machinery 2% Apparel 3% Notes: Foreign imports and exports only. U.S. Census Foreign Trade Division. Import/Export Ratio location and limited connectivity to Trading Partners inland distribution networks. While the Delaware River ranks Although Asia dominates U.S. Instead of Asia, Delaware River among the top U.S. ports for total waterborne trade, few Asian carriers ports are tied to Africa, a trade rela- tonnage, the region represents a visit the Delaware River, and none tionship largely driven by the region’s small export market, resulting in a call on Philadelphia. In general, East strength in petroleum and other stark import/export imbalance. Asian cargo shippers prefer the niche cargoes. As Figure 15 illus- As Figure 17 illustrates, in 2005 Trans Pacific route and tend to call trates, 43 percent of Delaware River Philadelphia ranked highest in the on West Coast ports. West Asian trade was with African markets in region for import tonnage (11th in cargo shippers that use the Suez Ca- 2005, compared with 13 percent na- the nation) and lowest for export nal are drawn to the Port of New tionwide. And, as Figure 16 illus- tonnage (70th in the nation), York/New Jersey as a first port of trates, trade with African markets amounting to a 80 to 1 ratio of im- call given its size and local consumer account for virtually none of the port tons to export tons. Camden (9 market. These factors limit the Dela- Delaware River’s container ship- to 1) and Wilmington (18 to 1) also ware River ports’ competitiveness in ments. have trade imbalances. The region’s Asian markets, which is also con- import/export imbalance is less stark strained by the complex’s upriver when measured by value, largely due to the high volume and value of pe- Figure 16: Delaware River and United States troleum cargo shipments. Current Trade with Asia and Africa, 2005 import and export rankings of all Delaware River United States U.S. ports by tonnage and value is % Top Five Goods % Top Five Goods provided in Appendix G. Containerized Traded by Value Containerized Traded by Value Trade Value (% of Total) Trade Value (% of Total) The Delaware River’s trade imbalance can be explained in part by Iron & Steel (30%) Ind. Machinery (15%) the economic composition of indus- Petroleum Product Motor Vehicles (14%) (12%) try in its market area. For the most Asia 25% Wood Products (11%) 74% Elec. Machinery (12%) part, the region’s businesses do not Elec. Machinery (9%) Furniture (4%) manufacture products that require ocean-going services, resulting in a Cocoa (8%) Apparel (4%) weak export market. The weak ex- Petroleum Product Petroleum Product (12%) (78%) port market compromises shippers’ Cocoa (2%) Ind. Machinery (4%) ability to backhaul cargo from Dela- Africa 1% 11% ware River ports, resulting in ineffi- Iron & Steel (1%) Motor Vehicles (3%) ciencies associated with moving Fruit & Nuts (0.4%) Cereals (2%) empty vessels out of port. This Ind. Machinery (0.2%) Iron & Steel (1%) amounts to an additional expense to Source: U.S. Census Foreign Trade Division.

18 SECTION 2: DELAWARE RIVER PORT DESCRIPTIONS AND KEY COMPETITORS

shippers, reducing Delaware River’s cost competitiveness. Figure 17: Rankings of U.S. Ports by Tonnage and Value, 2005

Cargo Tonnage Key Competitors Imports Exports Delaware River ports compete for Rank Port Short Tons Rank Port Short Tons business with other East Coast ports. 11 Philadelphia 25,914,744 60 Camden-Gloucester 545,293 Its closest competitors include the 17 Paulsboro 18,133,852 66 Chester 400,092 ports of New York/New Jersey, Bal- 29 Marcus Hook 9,570,380 67 Wilmington 381,567 timore, and Virginia. 33 Wilmington 6,896,449 70 Philadelphia 322,702 40 Camden-Gloucester 4,742,854 Port of New York/New Jersey Cargo Value With the largest volume on the Imports Exports East Coast, the Port of New York/ Rank Port Value ($) Rank Port Value ($) New Jersey is comprised of multiple 6 Philadelphia 29,462,379,151 22 Philadelphia 2,430,517,679 publicly-owned facilities on more 35 Chester 5,684,957,894 24 Wilmington 2,175,543,116 than 1,400 acres. It is nearly 50 per- 37 Wilmington 5,499,289,565 32 Chester 1,594,532,247 cent larger than the footprint of 79 Paulsboro 255,203,257 74 Camden 149,968,973 Camden, Philadelphia, and Wilming- 103 Camden 67,409,025 84 Paulsboro 88,580,455 Source: U.S. Census Foreign Trade Division. ton ports combined. Note: Tonnage is for foreign trade only. The Port Authority, created in a comparison of selected East Coast commodities include crude materials 1921 to manage the shared harbor ports’ distance to inland destina- (especially iron ore and scrap metal), interests of New York and New Jer- tions.) Baltimore markets its inland forest products, and “Ro-Ro” prod- sey, oversees seven cargo terminals location as a strategic advantage re- ucts (especially motor vehicles and and is viewed as a “must call” port lated to closer proximity to Midwest parts). by shippers due to the economies of distribution locations. scale it offers, its affluent and dense Virginia Ports local consumer market, and the vast Baltimore’s five public terminals The Virginia ports are comprised network of road and rail connections are overseen by the Maryland Port of three publicly-owned terminals to inland markets. Norfolk Southern, Administration. The port is served by stretching over 1,172 acres. Virginia Canadian Pacific, and CSX railroads the Norfolk Southern and CSX rail- ports have distinct natural assets, serve the facilities. Efforts to dredge roads and is close to I-95. Its key to a channel depth of 50 feet are underway to the new generation of con- Figure 18: Port of New York/New Jersey tainer mega-ships. New York/New Jersey handles a wide variety of cargo. Its largest markets include petroleum products (especially gasoline), food products (especially alcoholic beverages), and manufactured equipment (especially vehicles and textiles). Port of Baltimore At just over 1,000 acres, the Port of Baltimore is slightly larger in area than Camden, Philadelphia, and Wil- mington combined. Its facilities are accessible via a 50-foot channel and are located 150 miles from the ocean, over twice as far inland as Wilming- ton and fifty percent farther than Philadelphia. (Appendix G provides

Source: Port Authority of New York/New Jersey

19 SECTION 2: DELAWARE RIVER PORT DESCRIPTIONS AND KEY COMPETITORS

trade volume has declined in recent Figure 19: Competitor Port Facilities years, while New York/New Jersey’s share has spiked. Number of Total Channel Competitor Port Facilities Acreage Depth Trends in market share can be explained in large part by the type of Port of Baltimore 5 1,073 50 feet commodities shipped through the Virginia Ports 3 1,172 50 feet port. As Figures 22 and 23 illustrate, Port of New York/New Jersey 7 1,407 45 feet* while the Delaware River’s market share of trade volume remains high Delaware River Ports 11 990 40 feet** compared to competitor ports, it is Philadelphia Regional Port Authority 7 351 largely driven by the slower growth South Jersey Port Corporation 3 331 bulk and breakbulk markets Diamond State Port Corporation 1 308 (including general cargo). By contrast, New York/New Jersey’s Source: Port websites. Note: Facilities and acreage represent publicly owned port facilities only. prominence in the high-growth con- * Dredging project is underway to deepen the channel to 50 feet. ** Funding for dredging project to deepen the channel to 45 feet has received preliminary approval. tainer market is driving growth in that port’s overall market share. including proximity to the ocean (18 Virginia’s key commodities in- Containers miles) and a natural deepwater (50 clude coal and food products The Delaware River’s small posi- foot) and ice-free harbor. (especially tobacco). In another note- tion in global container trade has worthy department from East Coast These advantages help the Vir- contributed to its loss of market competitors, its exports outweigh its ginia ports compete in the container share in overall foreign trade volume. imports. market with other top ports like New As Figure 24 illustrates, New York/ York/New Jersey. Virginia Port Au- New Jersey and Virginia have experi- thority, which owns and oversees the Comparative Cargo Statistics enced dramatic increases in container port’s public terminals, has adopted a and Trends traffic in recent years, while Dela- strategy of attracting distribution ware River container traffic has re- centers for major retailers, such as Comparative analysis shows that mained flat. Wal-Mart, to reinforce the Virginia the Delaware River has lost ground ports attractiveness as the gateway to to its competitors in recent years, As a result, the Delaware River is inland markets. With close access to especially relative to New York/New currently not a major center of activ- I-64 and rail service from both CSX Jersey. ity for container traffic. As Figure 25 illustrates, none of the ports on the and Norfolk Southern, fast access to Commodities & Tonnage of the country’s interior has boosted Delaware River are top tier container the Virginia port’s volume of busi- As Figure 21 illustrates, Delaware ports. In 2006, Wilmington ranked ness. River ports’ market share of foreign 18th (9th on the East Coast) and

Figure 20: Competitor Port Commodities, 2005

Port of Port of Virginia Ports Delaware River Ports Baltimore New York/New Jersey

Short Tons % of Short Tons % of Short Tons % of Short Tons % of Top Five Commodities (000s) U.S. Total (000s) U.S. Total (000s) U.S. Total (000s) U.S. Total

Crude Materials 9,260 5.4% 2,745 1.6% 9,947 5.8% 3,945 2.3% Coal 6,224 7.6% 16,725 20.6% n/a n/a n/a n/a Primary Manufactured Goods 3,602 3.0% 3,298 2.7% 7,574 6.2% 5,924 4.9% Petroleum & Petroleum Products 3,438 0.5% n/a n/a 44,806 6.0% 66,908 8.9% Manufactured Equipment/Machinery 2,695 3.0% 4,499 5.0% 10,233 11.4% 5,924 4.9% Food and Farm Products n/a n/a 3,805 2.2% 7,673 4.4% 5,032 2.9% Total 28,235 1.9% 34,280 2.3% 87,799 5.9% 82,250 5.5%

Source: U.S. Census Foreign Trade Division. Note: Foreign imports and exports only.

20 SECTION 2: DELAWARE RIVER PORT DESCRIPTIONS AND KEY COMPETITORS

Philadelphia ranked 19th (10th on the Figure 21: Share of U.S. Waterborne Foreign Trade East Coast) in TEUs. Even if ton- Volume by Customs Port, 1997-2005 nage handled at Philadelphia and Wilmington were combined, the vol- 8.0% umes would fail to match 16th- 1997 1998 1999 2000 2001 2002 2003 2004 2005 ranked Baltimore. Together, Wil- 7.0% mington and Philadelphia handle just 6.0% one-quarter of the containers moving through the Virginia ports and one- 5.0% tenth moving through the Port of 4.0% New York/New Jersey. 3.0%

As a whole, East Coast container 2.0% movements are highly concentrated, with New York/New Jersey, Savan- 1.0% nah (GA), and Virginia ports ac- 0.0% counting for over 60 percent of East Delaw are Riv er New York Virginia Ports Baltimore Coast traffic.11 This concentration is Por ts the product of port capacity, strong landside connections critical national Source: U.S. Census Bureau. distribution markets such as Chicago and Columbus, and large consumer Figure 22: Vessel Calls by Ship Type, 2005 markets. The stabilizing influence of these market factors will likely per- petuate concentration of container traffic in the foreseeable future. Virginia Ports Product Tanker

Crude Tanker Delaw are Riv er Plans for the Future: Por ts Container Philadelphia, the Delaware Dry Bulk River, and the Competition Ro-Ro New Y ork Ports are in a constant state of re- General Cargo evaluating global trends and the Combination competitive landscape to strategically Baltimore Gas Carrier position facilities for capturing future maritime business. Planning for the 0 1,000 2,000 3,000 4,000 5,000 6,000

future on the Delaware River will Source: U.S. Department of Transportation, Maritime Division. require keeping pace with these efforts. The planned and potential improvements and expansions of indi- Figure 23: Petroleum and Petroleum Product Vessel Calls, 2005 vidual ports, and those of their competitors, will affect the future vol- 1,200 umes of maritime commerce in the region and the economic benefits 1,000 that that activity generates. 800

Port of Baltimore 600

The Maryland Port Administra- 400 tion’s 2002 Strategic Plan for the Port of Baltimore evaluated the com- 200 parative strengths and weaknesses of 0 the port and the operational and po- Baltimore New York Delaw are River Virginia Ports litical environment. The plan estab- Por t s lished an explicit goal of three per- Product Tanker Crude Tanker cent annual container growth and

21 SECTION 2: DELAWARE RIVER PORT DESCRIPTIONS AND KEY COMPETITORS

Figure 24: Total TEUs by Customs Port, able about 2035 1997-2005 ⇒ Sparrows Point: 220 to 420 acres, available about 2040 4,000,000 Baltimore has also taken strides 3,500,000 to link facilities improvement and expansion with infrastructure en- 3,000,000 hancement, including dredging pro- 2,500,000 jects and security upgrades. A working group including CSX and Nor- 2,000,000 folk Southern has managed market- 1,500,000 ing issues and landside transportation concerns, including chokepoints in 1,000,000 the rail system that serves the port. 500,000 In particular, the region’s lack of “double stack” (two containers 0 stacked on top of each other) rail 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 clearance in its aging tunnels limits potential future port growth. Estab- New York Baltimore Delaware River Vi rgi nia lishing such clearance would cost billions of dollars and likely require a Source: U.S. Census Bureau. massive public subsidy. expanded niche cargo business in Virginia Ports forest products, steel, and automo- Recent private and public infra- Figure 25: Rankings of biles. structure investments have helped U.S. Container Ports, 2006 New facilities were designed to the Virginia ports prepare for future Rank Port TEUs help Baltimore reach its goal of being growth. APM Terminals, associated 1 Los Angeles 8,469,853 the first-ranked port for automobiles with the Maersk-Sealand shipping 2 Long Beach 7,289,365 (it is currently ranked second). Be- line, announced a $600 million in- 3 New York/New Jersey 5,092,806 tween 1997 and 2002, the Port of vestment in a 300-acre container terminal in April 2004. In 2005, federal 4 Oakland 2,390,262 Baltimore constructed 200,000 funding was granted for the Heart- 5 Savannah 2,160,168 square feet of cargo sheds and a new land Corridor, an improvement pro- 6 Tacoma 2,067,186 auto terminal and acquired land for ject that will enhance rail capacity 7 Hampton Roads 2,029,799 future expansion. In 2007, the port opened two automotive-related facili- and access to Midwest growth mar- 8 Seattle 1,987,360 kets such as Columbus, OH (a grow- 9 Charleston 1,968,474 ties, including a 72-acre processing center. ing hub for distribution centers) and 10 San Juan (FY) 1,729,294 Chicago, IL. Construction is under- 11 Houston 1,606,360 The Port of Baltimore also way with completion expected in 12 Honolulu (FY) 1,113,789 sought to foster new relationships June 2010. In 2006, a $60 million 13 Miami (FY) 976,514 and expand its business. For exam- investment funded the construction 14 Port Everglades (FY) 864,030 ple, the Port has completed an agree- of one million square feet of ware- 15 Jacksonville (FY) 768,239 ment with the Suez Canal Authority house/distribution space. Another 16 Baltimore 627,947 for information sharing that could 3.5 million square feet is in planning 17 Anchorage 485,760 lead to joint marketing efforts. The stages. Port of Baltimore also intends to 18 Wilmington (DE) 262,856 The Virginia ports’ long-term 19 Philadelphia 247,211 expand its facilities. In addition to the construction of an additional vision is reflected in its 2040 master 20 Palm Beach (FY) 244,004 plan. Capital investments totaling 21 Portland (OR) 214,484 berth at the Seagirt Marine Terminal, three other sites have been targeted nearly $3 billion are planned between 22 Boston 200,113 for future expansion and terminal 2006 and 2032, all with an eye to- 23 Gulfport 197,428 development: wards managing the anticipated tri- 24 Wilmington (NC) 177,634 pling of cargo demand during this 25 New Orleans 175,957 ⇒ Cox Creek: 230 to 330 acres, avail- period. Among them, the largest is Source: AAPA & PRPA. able about 2020 Craney Island development, con- Notes: East Coast Ports in bold. ⇒ Masonville: 100 to 130 acres, avail- tainer facilities to be built over 600

22 SECTION 2: DELAWARE RIVER PORT DESCRIPTIONS AND KEY COMPETITORS

acres in two stages with a projected Figure 26: Virginia Port Authority Proposal final capacity of 5.0 million TEUs. for “Craney Island Marine Terminal” The port also has authorization to dredge its harbor to a depth of 55 Phase I: 2017 Phase II: 2032 feet, enabling it to handle the new Size 220 acres 600 acres generation of container mega-ships. Depth 52 feet 52 feet Capacity 1.5 million TEUs 5.0 million TEUs Port of New York/New Jersey Cost $1.2 billion $1.0 billion The Port of New York/New Jer- Source: Virginia Port Authority presentation to the Transportation Accountability Commission, January 31, 2007. sey expects to continue to be a high volume port. To accommodate in- tivize greater use of rail for landside River Port Authority, identifies the creasing container demand, New transportation movements at the need for additional berths beyond York/New Jersey is dredging its port. those being developed at Paulsboro, channel to 50 feet. Scheduled for including additional berths at sites in Delaware River Ports completion in 2014, parts of the Carney’s Point and Gloucester City. deeper channel may be serviceable as Although the Delaware River In Delaware, the Diamond State Port soon as 2009. ports as a whole have not undertaken Corporation has 180 acres adjacent a comprehensive planning process, to the Delaware River available for New York/New Jersey’s long- various infrastructure and facility future expansion. While it hopes to term vision is reflected in its Com- improvement projects are either develop this land, funding has yet to prehensive Port Improvement Plan. planned or underway. The long- be secured for the project. In Penn- Created in 2005, the Plan projects awaited I-95/PA Turnpike Inter- sylvania, Governor Edward G. cargo volumes through 2060 and change connection is designed to Rendell announced in May 2007 a evaluates infrastructure needs to han- reduce congestion and smooth tran- $300 million capital improvement dle anticipated traffic flows. The program for port develop- plan’s projections also ac- ment. count for competitor port The Heartland Corridor promises to shave activity. a half-day and over 200 miles off the In addition to investments in existing facilities, there may A capacity analysis re- current rail route to Chicago from the Port be a proposal for a new facil- vealed that roughly double of Virginia. ity construction under the the number of containers aegis of the Philadelphia Re- could be handled without major ex- sitions between the region’s major gional Port Authority. Of particular pansion or investment, but also that highway connectors. Construction is note are two sites adjacent to the by 2060, an additional 2,138 acres slated to commence in 2008. Rail Packer Avenue Marine Terminal. To would be needed. There are 2,780 improvements initiated by CSX will the north, an expansion of 1000 acres available at existing facilities, so enhance the region’s existing double acres would add 2,700 linear berthing redevelopment rather than acquisi- stack clearance, allowing for higher feet. To the south of Packer Avenue, tion will be employed. Cost analysis volumes of container cargo to move marginalization of existing finger revealed that Port Elizabeth is the through the region. PRPA has been piers and conversion of 90 to 140 optimum location for terminal en- designated the non-federal sponsor acres is being explored. The PRPA hancements to increase container- for dredging the Delaware River’s anticipates issuing a request for in- handling operations. main channel from 40 to 45 feet to formation in June 2008 to private allow the region’s ports to accommo- As part of a $2 billion capital investors to gauge interest in devel- date larger vessels with heavier loads. strategy, investments are being made oping the facility. The size, cargo that will double the port’s rail capac- These proposed investments and types handled, equipment and tech- ity, allowing for simultaneous arrivals projects suggest that Delaware River nology employed and net new busi- and departures for CSX and Norfolk ports could see additional upgrades ness attracted to the region will de- Southern. Other terminal area up- or expansion in the near future. In termine the magnitude of tonnage grades, such as new buildings and New Jersey, The South Jersey Port and direct employment growth asso- implementation of advanced green Corporation is developing a 190-acre ciated with any new facilities. and information technologies, also port in Paulsboro, a facility that is have commenced. To address the anticipated to start with two berths region’s highway congestion, the plan and be operational in three years. A also suggests revenue supports and master plan for the South Jersey Wa- other mechanisms that would incen- terfront, completed by the Delaware

23 SECTION 3: GLOBAL TRENDS AND IMPLICATIONS FOR DELAWARE RIVER PORTS Section 3: Global Trends and Implications for Delaware River Ports

Key Findings markets; a weak export market; and Africa exporting a distinctly and limited regional collaboration. lesser volume of goods. Increased ⇒ Containerization has driven in- transshipment activity – the move- creases in global cargo demand, ment of goods between ships in port led by double-digit annual growth Recent Patterns of Cargo – and slowing of the most rapidly of demand from South and East Movement by Type growing economies of Asia, coupled Asian markets. International trade patterns, tech- with the maturation of outsourcing ⇒ Container-based shipping is ex- nological development, and con- trends, might change existing struc- pected to double by 2020. sumption patterns have impacted tural relationships between GDP ⇒ Containerization is driving inno- Delaware River port development. growth and trade volumes. vation in the shipping industry, The composition of maritime including larger ships and in- Over the past quarter-century, global trade changed significantly creased scrutiny on unit shipping growth in shipment of crude oil and between 1970 to 2005. In the 1970s, costs. petroleum products, major bulk crude oil and petroleum shipments ⇒ Trade rationalization and shifting commodities, and other bulk and containerized cargoes has roughly accounted for the majority of water- trade routes have created oppor- borne commerce. Between 1980 and tunities for East Coast ports to paralleled global and regional GDP growth. However, other factors such 1990, crude oil and petroleum ship- capture additional market share of ments remained relatively constant, global maritime cargo. as production and supply chain management could render historical but containerized traffic began to ⇒ Several factors indicate Delaware trends less reliable as predictors of emerge. By 2005, dry shipments River ports are well-positioned to future shipments. Figure 27 provides (bulk and container) comprised al- capture a share of the global in- a summary of global growth trends most two-thirds of all waterborne crease in cargo shipments, includ- by cargo type from 1980 to 2005, trade despite continued growth in ing existing terminal and landside excluding containers. Unprecedented liquid (crude oil and petroleum) bulk capacity; noted operating effi- growth in global shipping occurred shipments, a shift driven by the 5.0 ciency; proximity to a large con- between 1990 and 2000 despite sig- percent average annual growth in dry sumer market; and positioning for nificant disruptions in Asian trade (container and bulk) shipments be- niche cargoes. and economic shocks in South tween 1990 and 2005. ⇒ Several factors limit Delaware America and Eastern Europe. Container Trades River ports’ ability to capture ad- Global exports in 2005 were ditional cargo, including distance The second half of the twentieth dominated by Asia, including both from the ocean and a relatively century was marked by the revolu- intra– and inter-continental trade. shallow channel; limited connec- tionary development of container- Exports from the Americas and tivity with distribution networks; based shipping. In standardizing the Europe were at approximately the limited trade with Asian growth method of cargo handling, contain- same levels in 2005, with Oceania erization improved the efficiency of marine commerce, driving port interests to pursue technological invest- Figure 27: Trends in Global Maritime Trade, Loaded Goods, 1980-2005 ments that would adequately support container operations. Cargo Type 1980 1990 2000 2005 Tanker/Liquid 1,871 1,755 2,163 2,422 These investments served to ex- CAGR -0.6% 2.1% 2.3% pand port capacity and set the stage Dry Major Bulk 796 968 1,288 1,701 for enormous increases in overall CAGR 2.0% 2.9% 5.7% trade volume. Continued technologi- Other Bulk 1,037 1,285 2,533 2,986 cal advancements have increased the cost effectiveness of container ship- CAGR 2.2% 7.0% 3.3% ping, expanding the breadth of car- Total Dry 1,833 2,253 3,821 4,687 goes moved in this medium. The CAGR 2.1% 5.4% 4.2% movement to containerization per- Total 3,704 4,008 5,984 7,109 petuated virtually all of late 20th cen- CAGR 0.8% 4.1% 3.5% tury global shipping and undoubtedly Source: UNCTAD, 2006. Notes: CAGR=Compound Annual Growth Rate; Major bulk cargo limited to iron ore, grain, coal, bauxite/alumina & phosphate.

24 SECTION 3: GLOBAL TRENDS AND IMPLICATIONS FOR DELAWARE RIVER PORTS

will drive 21st century maritime com- Figure 28: Annual Growth in Container Demand merce. by World Region, 1990-2005 Changes in the global economy World Region 1990-1995 1995-2000 2000-2005 have played a leading role in promoting container growth. Among the North Europe 6.45% 8.07% 8.52% driving forces in expansion of con- S. Europe/Mediterranean 11.41% 12.86% 9.96% tainer and liner (regularly scheduled) Middle East & South Asia 12.90% 10.48% 15.39% operations has been globalization of Sub-Saharan Africa 9.55% 8.35% 11.78% production, transition of developed East Asia 14.22% 11.13% 12.22% countries from manufacturing- to Australia/Oceania 5.00% 8.22% 7.84% service-oriented economies, and the North America 6.13% 7.48% 7.24% adaptability of containerized trans- Other Americas 14.58% 10.72% 9.64% portation to handle diverse com- Total 10.83% 10.14% 10.82% modities, including many that were Source: UNCTAD, 2006. formerly shipped via bulk carriers. Notes: CAGR=Compound Annual Growth Rate; major bulk cargo limited to iron ore, grain, coal, bauxite/alumina & phosphate. Additionally, the growth of income such as Europe and South America, As Figure 29 illustrates, relative and wealth in developing countries limiting the impact of growth on growth rates have caused changes to among a percent of the population East Coast port traffic. Overall, aver- relative market share. These data has led to greater global demand for age annual growth was over 10 per- show that the relative growth in de- finished goods. cent for each five-year period from veloping regions has begun to drive One of the most significant fac- between 1990 and 2005. As Figure global container trade and that tors in the rapid expansion of con- 28 illustrates, the Middle East and growth in container trade for devel- tainerized trade has been the integra- South Asia grew most rapidly oped economies is more modest yet tion of landside intermodal transpor- throughout this period, with an aver- still significant. Most forecasters ex- tation. Port operators that under- age annual growth rate of over 15 pect these trends to continue stood this connection and imple- percent between 2000 and 2005. through the next five to seven years. mented innovations in integrating North America was among the slow- Although North America’s share transportation modes have seen an est growing of all global port regions, of global container demand declined increase in container traffic. averaging less than 8 percent. North- between 1995 and 2005, growth in ern Europe averaged more than 8 Between 1995 and 2005, total container cargo rose in each of the percent growth for both time periods container demand more than dou- North American port areas: North between 1995 and 2005, while the bled from 144.1 million TEUs to and South Atlantic, North and South Southern Europe/Mediterranean 391.1 million TEUs. However, the Pacific, Pacific and Atlantic averaged nearly 13 percent growth concentration of growth has been Canadian, Gulf and Island Pacific. between 1995 and 2000 and 10 per- less pronounced with traditional The South Pacific port region, which cent between 2000 and 2005. trade partners for the East Coast includes the ports of Los Angeles

Figure 29: Shares of World Container Demand by Port Region, 1995 and 2005

1995 Global Shares 2005 Global Shares

S.Europe/ Middle Eas t & S.Europe/ Middle Eas t & Mediterranean South Asia North Europe North Europe Mediterranean South Asia 9.3% 6.2% 11.7% 14.3% 10.1% 7.7% Sub-Saharan Other Other Africa Americas Sub-Saharan Americas 2.0% 6.3% Africa 6.5% 1.9%

North A meric a North A meric a 11.9% 15.8% Eas tA s ia Australasia/ Australasia/ 43.5% Oceania Oceania Eas tA s ia 1.9% 2.4% Total = 144.1 million TEUs Total: 391.1 million TEUs 48.4%

25 SECTION 3: GLOBAL TRENDS AND IMPLICATIONS FOR DELAWARE RIVER PORTS

Atlantic port region (which includes Figure 30: Growth in Container Demand Philadelphia and Delaware River by Global Port Regions, 1990-2006 ports) has the third highest average growth rate (over 6 percent) among 450 U.S. and Canadian port regions, be- 400 hind North and South Pacific regions. Unlike most regions, the 350 North Atlantic and North Pacific 300 port regions both had higher average annual growth rates between 2000 250 and 2005 than between 1995 and 200 2000. In particular, the North Pacific region grew as overflow and 150 congestion in the South Pacific ports 100 caused problems. Also, residual 50 effects of the longshoremen's strike and the rail slowdowns on the Union 0 Pacific caused shippers to employ 5 alternative access points. On the 96 98 05 006 1990 1991 1992 1993 1994 199 19 1997 19 1999 2000 2001 2002 2003 2004 20 2 North Atlantic, increased direct

North Europe S.Europe/Mediterranean Middle East & South Asia shipments from Asia, the size of Sub-Saharan Africa Eas tA s ia Australasia/Oceania inland markets, and new niche North A meric a Other Americas services (such as refrigerated cargo) helped to increase overall cargo Source: Ocean Shipping Consultants, 2007. flows.

and Long Beach, Oakland and San between 400,000 TEUs (2004) and Diego (among others), moves the 2.1 million TEUs (2000) more than Global Factors Driving Future largest number of containers the North Atlantic ports since 1993. Maritime Commerce annually. North and South Atlantic For a list of individual ports by ports handle roughly the same annual North American region, please see The study team convened an ex- volumes of container traffic, with the Appendix G. pert panel of national specialists in South Atlantic ports handling port operations, maritime commerce, As Figure 32 illustrates, the North international trade, freight flow dy- namics, and intermodal logistics to Figure 31: Growth in Container Demand weigh in on the factors that will have by U.S. Port Regions, 1990-2006 the greatest impact and how they might affect Philadelphia and the region. Panelists included: Steve Fitz- 60,000,000 roy of Volpe Transportation Group; 50,000,000 Shashi Kumar, Dean of the U.S. Merchant Marine Academy; Eliza- 40,000,000 beth Ogard of Prime Focus Consult- ing; and John Rounesville of Hori- 30,000,000 zon Lines. This chapter draws from the findings that emerged from pan- 20,000,000 elist discussions.

10,000,000 Projected Container Growth Global growth of container move- 0 ments is expected to continue, fueled

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 in part by the fast growing econo-

Pacific CN Atlantic CN North Atlantic South Atlantic mies of Asia. In the U.S., container North Pac if ic South Pacific Island Pacific Gulf traffic is expected to more than double by 2020. However, the increase in Source: American Association of Port Authorities, July 2007. containers also means larger ships

26 SECTION 3: GLOBAL TRENDS AND IMPLICATIONS FOR DELAWARE RIVER PORTS

with deeper berth and channel re- Figure 32: Average Annual Growth Rates in Container Traffic quirements. by North American Port Region, 1990-2005 The global surge in containers is North American Port Region 1990-1995 1995-2000 2000-2005 also expected to exhaust projected United States port capacity by 2015. Pacific CN 6.33% 18.75% 11.71% Dwindling capacity is leading to port Atlantic CN 1.71% 7.12% 3.30% congestion, which is increasing ship- North Atlantic 4.36% 4.58% 8.14% ping costs. Larger container ships South Atlantic 12.08% 7.17% 2.79% also need plentiful warehouse stor- North Pacific 6.17% 2.06% 6.09% age, which is running out. South Pacific 7.01% 10.08% 7.94% Island Pacific 8.29% -8.42% 16.18% Trade Rationalization Gulf 7.61% 7.30% 5.20% Asian cargo destined for the U.S. Total United States 7.48% 6.35% 6.66% East Coast or Midwest has histori- Total North America 7.11% 6.73% 6.71% cally been imported through West Source: American Association of Port Authorities, July 2007. Coast ports and transported by train the Panama Canal) and Southwest ports, the cost differential is currently across the country, a trade pattern Asia (via the Suez Canal) are becom- not significant enough to justify the referred to as “land-bridging.” Rising ing more desirable as the economies entry of short sea routes by carriers. fuel costs, congestion at West Coast of these regions improve. The rela- If the Federal Highway Administra- ports, concerns regarding the vulner- tive viability of these trade routes is tion pushes short sea shipping as a ability to trade disruptions, and impacted by infrastructure limita- real strategy for mitigating landside changing global trade patterns have tions. Of note, the Panama Canal is highway congestion and improving made land-bridging less economically coping with mounting delays and will air quality, then it is possible that viable in recent years. As a result, not be able to accommodate the new subsidies like those offered intermo- goods intended for East Coast mar- generation of container ships until its dal rail facilities (using grants, bonds, kets are increasingly being shipped expansion project is completed and public/private partnerships) through East Coast ports, a shift re- (scheduled for 2014). As an alterna- would induce marine carriers to de- ferred to as “trade rationalization.” tive, global traffic will increasingly velop these services. The expected continuation of make use of the Suez Canal. As ships A recent study evaluated possi- trade rationalization could result in travel through the Suez and across bilities for short sea shipping routes increased activity at U.S. East Coast the Mediterranean Sea and Atlantic on the U.S. East Coast.12 The investi- ports. Capturing additional market Ocean to the U.S., East Coast ports gators asked shipping companies to share will require that ports actively are the logical destination. assess cost factors that would prepare for growth, especially by fo- prompt them to use this type of ser- cusing on improvements to landside Short Sea Shipping vice. Interviewees indicated that be- infrastructure and services. Shipping As container mega-ships enter cause container cargo is time- lines are increasingly taking into global fleets, they will call on only the sensitive, the dependability of truck account the efficiency of cargo largest container ports. This trend transportation is very valuable. The handling and inland distribution will increase potential for the devel- study estimated that a 10 percent networks in choosing a port-of-call. opment of a hub and spoke system cost savings would not be sufficient For this reason, coordinated regional to accommodate demand, in which to utilize short sea shipping, however port activity and cost-effective con- secondary ports with feeder barges a 20 percent reduction may cause nections to inland U.S. markets will would handle local, or “short sea,” shippers to consider it. be key factors in attracting future trips. Such a system could be seen as port business. Ports that are able to analogous to air traffic, which utilizes In addition, legal barriers exist to swiftly move cargo off the terminal hub airports as primary destinations the implementation of short sea ship- and to such inland markets as and smaller, “reliever” airports to ping. The Merchant Marine Act of Chicago, Memphis, and Detroit will absorb a portion of additional traffic. 1920, commonly referred to as the be at a competitive advantage. Jones Act, requires that shipping ac- In other parts of the world, short tivity between ports in the United Shifting Trade Routes sea shipping is used as a way to by- States be limited to U.S.-built ships. pass poor roads and congestion. In Figure 33 illustrates current major The Federal government’s recent the U.S., despite congestion in major global shipping routes. Trade pat- exploration of short sea shipping as a metro areas and particularly around terns involving Latin America (via means to mitigate road and rail con-

27 SECTION 3: GLOBAL TRENDS AND IMPLICATIONS FOR DELAWARE RIVER PORTS

River’s primary port function is to Figure 33: Global Shipping Routes accommodate demand generated by its regional population base. As Fig- ure 34 illustrates, the Delaware River is situated at the center of the most heavily populated region in the U.S. Approximately 27 million people are located within 100 miles of Delaware River ports, and 95 million people (31 percent of the U.S. population) are within 500 miles. The 500 mile radius is a rough fulcrum point between cost-effective service for trucks (shorter distance) and trains (longer distances). The Delaware River’s geographic proximity to such a large consumer market will help its

Source: Hofstra University. ports sustain competitiveness in maritime commerce. gestion has underscored the potential vestments in port infrastructure Port Operating Efficiency. for expansion of U.S. shipbuilding would increase container capacity, Delaware River ports have relatively capacity. thereby allowing the ports to capture predictable and versatile work rules a share of anticipated demand. In Military Cargo Demand that are a distinct advantage over Philadelphia, recent proposals in- competitors. For example, the Port Commercial cargo is not the only clude densification of existing facili- of Philadelphia offers 19 labor “start business flowing through the U.S. ties and construction of new facili- times” compared to New York/New ports. Military cargo is imported and ties, including the Southport and Jersey’s five. Additional start times exported through local facilities. In Northport proposals adjacent to the improve competitiveness by increas- particular, the RESET program re- existing Packer Avenue facility. If ing docking flexibility, thereby reduc- turns damaged military equipment to realized, these capital projects could ing the potential for delays and, in a state of good repair. This effort triple the Port of Philadelphia’s con- turn, the average cost to shippers of requires that equipment, such as tainer capacity. calling on the port. Additionally, tanks, jeeps, and helicopters, be Storage Capacity. Existing con- Philadelphia has been noted for high shipped back to the United States for gestion at large East Coast container landside velocity, minimizing a ship’s maintenance. The 2007 Defense ports may present an opportunity for “turnaround time” and further re- Appropriations bill included $17.1 Delaware River ports. In particular, ducing shipping costs. billion for this program, a substantial warehouse facilities are becoming increase made necessary by mounting Landside Infrastructure Capac- scarce around the Port of New volumes of equipment worn out by ity. The region’s major highways, York/New Jersey. Efforts to invest prolonged military engagements in including Interstate 95, Interstate in and promote warehousing and Afghanistan, Iraq, and elsewhere. 476, Interstate 76, Pennsylvania distribution centers in Greater Phila- Turnpike, and New Jersey Turnpike delphia could attract shipping busi- create an extensive arterial network ness being squeezed out by dwin- Implications for Delaware serving both North-South and East- dling supply at its competitor ports. River’s Competitive Position West freight corridors. These road- Access to Trade Routes. Ports ways are close to the region’s port Anticipated global trends high- on the Delaware River will not likely facilities and have low levels of con- light the important factors that will become the first point of call for gestion relative to competitor ports, influence Delaware River ports’ com- container mega-ships coming thus providing competitive connec- petitive position in future maritime through the Suez Canal, but they tions to large clusters of distribution commerce. stand to benefit from increased usage facilities in South Central Pennsyl- Positive Factors of the Suez as a primary trade route. vania, the Lehigh Valley, and Central New Jersey. Container Capacity to Increase Proximity to Large Regional Throughput. Proposed capital in- Consumer Market. The Delaware

28 SECTION 3: GLOBAL TRENDS AND IMPLICATIONS FOR DELAWARE RIVER PORTS

The region’s freight rail network Delaware River does not have a deep container mega ships. Several com- also is extensive and well-connected enough channel to accommodate the petitors are undertaking more aggres- to the river. Both CSX and Norfolk largest of new container ships. Even sive channel deepening measures, Southern have modern intermodal now, some ships must be putting the Delaware River ports at a facilities adjacent to Packer Avenue “lightered” (partially offloaded to competitive disadvantage, even if Marine Terminal. Combined, the reduce draft requirements) before dredged to a 45-foot depth. region’s road and rail infrastructure navigating up the river. Dredging the The impact of a relatively shallow represent a critical support mecha- Delaware River channel from 40 to channel is compounded by tidal nism for moving cargo from the 45 feet will help to mitigate this limi- shifts, which can delay ships at the Delaware River ports to a final desti- tation, but it will not be sufficient to mouth of the Delaware River for up nation. accommodate the new generation of Positioning for Short Sea Ship- ping. If short sea shipping material- Figure 34: 100-mile and 500-mile Radii from Philadelphia izes, Delaware River ports would likely act as “relievers” for larger container ports such as New York/ New Jersey or the Virginia ports. Of specific short sea feeder routes evaluated by the study team, one from Halifax, Nova Scotia to Philadelphia was seen as having the most promise. The study team concluded: “Should a short sea operator from Atlantic Canada wish to target transshipped feeder traffic…a port in Philadelphia would be a suitable choice and help complement the existing demand.”13 Short sea shipping would also create new demand for American- built ships. In the Aker Shipyard, Philadelphia would be well positioned to capture a significant share of this new market. Positioning for Military Cargo. Philadelphia is strategically positioned to handle additional demand for military cargo. Letterkenny and Tobyhanna Army Depots in Pennsyl- vania are already servicing electronics and vehicles that come through the Port of Philadelphia, a designated strategic port deemed to have the appropriate capacity, logistical networks, and security to handle military cargo. Increased Congressional funding for RESET, continued military equipment needs, and Philadel- phia’s maintenance of its strategic port designation present the opportunity for increased maritime activity. Limiting Factors Shallow Channel Depth. The

29 SECTION 3: GLOBAL TRENDS AND IMPLICATIONS FOR DELAWARE RIVER PORTS

to 10 hours. Most of the Philadelphia region’s ited the Delaware River’s maritime double-stacked trains first travel competitiveness. Distance from the Ocean. The north through New York to access Port of Philadelphia is approximately Limited Regional Collabora- inland distribution markets, a process 100 miles from the mouth of the tion. Competition and conflict that can add up to a day of additional Delaware River, a trip of as much as among Delaware River port facilities travel for Delaware River based a half-day that amounts to a signifi- have led to fractious and unproduc- trains compared with New York- cant additional cost. tive relationships among port based trains. stakeholders. Despite several efforts Limited Trade with Asian Mar- As a result, the Delaware River at institutionalizing regional kets. The Delaware River ports have ports’ container market is limited to coordination, historically public and not been active participants in the regional markets and truck-based private port entities have operated rise of trade with Asia, the world’s distribution, which is also con- unilaterally. largest container growth market. At strained in part by infrastructure limi- present, no Asian ships call on any As a result, while other regions tations. The connections between the Delaware River port. Capturing addi- have banded together to promote highway system and port facilities are tional container share will require unified port interests, Delaware River characterized by troublesome grade establishing closer ties with Asian ports compete with one another for crossings and frequent delays. container business. business and develop plans for Compounding poor connectivity is growth in a piecemeal manner. Phila- Limited Connectivity with poor condition. That 57 road bridges delphia’s lack of regional collabora- Inland Markets and Critical tion has resulted in inefficient National Distribution Net- use of increasingly scarce wa- works. The ability for Dela- The ability for Delaware River ports terfront land, compromising ware River ports to develop to develop connections with overall port competitiveness. connections with distribution networks is constrained by the distribution networks is constrained Philadelphia region’s rail and by the Philadelphia region’s rail and Summary road infrastructure. road infrastructure. Delaware River ports’ com- Regarding railroads, low petitive advantages - terminal, bridge clearances limit the in southeastern Pennsylvania are storage, and infrastructure capacity, region’s capacity for “double stack” rated “structurally deficient” access to trade routes, proximity to a container trains to access inland dis- illustrates that the region’s large regional consumer market, op- tribution networks. Double stack infrastructure is rapidly aging, a fac- erating efficiency, and positioning to trains have become the standard for tor that is compromising the highway accommodate future demand - and container service, doubling a train’s network’s ability to effectively service their disadvantages - a shallow chan- container capacity by without in- port activity. nel, prohibitive distance from the creasing fixed costs. Double stack ocean, trade imbalance and trade clearance is critical for railroads to Trade Imbalance. The decline partners, poor connectivity with provide ports with competitive distri- of manufacturing in Philadelphia inland markets and distribution net- bution service, and is therefore es- reduced the region’s exports. Rapid works, and limited regional collabo- sential for establishing a port’s com- globalization weakened U.S. export ration - suggest that the region is not petitiveness in connections with markets and further undermined the now and is unlikely to become a top inland markets. region’s status as an exporter. The tier container port, but that global result has been a drastic import- Currently, the only port facility in trends offer prospects for growth. export trade imbalance. This imbal- the Philadelphia region with double Delaware River ports should strategi- ance has led to inefficiencies by limit- stack clearance is the Packer Avenue cally focus on leveraging competitive ing shippers’ ability to backhaul, Marine Terminal. However, Packer advantages and mitigating disadvan- thereby increasing the cost of calling Avenue’s double stack clearance is tages to maximize growth potential. on a Delaware River port. Moreover, constrained in that it requires trains niche cargoes, for which the region to stop and change tracks, a process has developed an expertise, tend to that adds 37 miles and 5 hours to be seasonal, a temporal reality that travel. This distance and time adds results in an uneven and therefore cost that reduces the benefit of dou- inefficient overall usage of existing ble stacking. facilities. These factors have all lim-

30 SECTION 4: STRATEGIES AND SCENARIOS FOR DELAWARE RIVER PORT GROWTH Section 4: Strategies and Scenarios for Delaware River Port Growth

Key Findings use, storage, quayside operations and tially offloaded ships would not re- equipment, and landside transport quire drafts as deep as needed when ⇒ Planning matters. In particular, linkages. Many port’s capital and sailing at full capacity. planning around cargo segments, strategic plans collapse the cargo em- To capture additional share in this existing capacity, and inherent phasis to container, bulk (dry, liquid, market, Delaware River ports have limitations will help Delaware and break-bulk) and roll-on/roll-off an opportunity to target trade routes River ports prepare for growth. (vehicles). ⇒ Delaware River ports’ strategy that typically feature smaller ships. for growth should include lever- Planning Around Demand on the For example, Eastern Europe, the aging existing strengths, targeting U.S. East Coast Baltics, and Central America are smaller volume regions that may infrastructure investments The macro factors influencing serve as an attractive alternative to around strategic objectives, and global maritime commerce are hav- trade with larger Asian markets. In collaborating as a region to pur- ing a profound affect on the U.S. particular, Eastern European and sue all future growth opportuni- East Coast ports, resulting in a con- Baltic involvement in intermediate ties. stantly evolving competitive land- manufacturing could serve the ⇒ The future of maritime com- scape. These industry factors will Delaware River region well.14 merce on the Delaware River is continue to impact future cargo de- uncertain, and will depend on the ports’ collective Strategies to Leverage ability to strategically de- A strategy to promote port growth velop infrastructure and Opportunities for Growth mitigate risks. should explicitly relate to an A strategy to promote port ⇒ Ports presently have ca- objective analysis of market growth should explicitly relate pacity to accommodate opportunities. to an objective analysis of another 1.5 million TEUs market opportunities. This through 2020. report has illustrated some of the market considerations that Planning Principles for Growth mand at East Coast ports, a reality should impact the development of a that will have significant implications strategy for Delaware River port Strategically positioning port fa- for Delaware River ports’ future growth. Its key findings accentuate cilities for the future is a complex competitive position. the importance of building this strat- process of effective marketing and egy around three core actions: capacity readiness. Market position- Planning Around Existing Capacity ⇒ Leveraging existing competitive ing is somewhat predetermined by Capacity investments are strengths; relative geographic placement, local expensive, protracted propositions. ⇒ market size, density of development Ideally, a port’s capacity reflects an Investing in infrastructure en- around port facilities, and access to optimal balance of infrastructure hancements; and inland markets. types to service a port’s existing ⇒ Collaborating to rationalize use of regional facilities. Strategically improving the com- cargo mix. To maximize the value of Leverage Existing Competitive petitive position of Delaware River future investment, desired increases ports will require proactively leverag- to capacity should take into account Strengths cargo mixes and industry factors that ing the region’s competitive advan- Delaware River ports’ competi- will have the largest positive impact tages and mitigating its disadvan- tive strengths include a proximity to on a port’s competitive position. tages. The first step in this process is a large consumer market and an ag- to shape future plans and actions Planning Around Limitations glomeration of facilities to support around anticipated global trends. niche cargo shipments. These Even with channel-deepening, strengths should be strategically lev- Planning Around Cargo Segments Delaware River ports must develop eraged to capture additional business. The types of cargo Delaware other capabilities (inland distribution, Leverage Geographic Prox- River ports plan to handle matters. for example) that add value for ship- imity to U.S. Northeast Market. Each cargo segment has unique re- pers. Wilmington and Philadelphia Sitting at the center of the largest quirements for labor utilization, land may be able to capture significant business as a second port of call. Par- population mass in the country,

31 SECTION 4: STRATEGIES AND SCENARIOS FOR DELAWARE RIVER PORT GROWTH

River, which has a well-established Figure 35: North Atlantic Port Range Container Demand by Hinterland reputation for managing high-value perishable breakbulk cargo. With the Projected Demand for TEUs, Hinterland Market CAGR, 2005-2020 concentration of container trade at 2020 (Millions) the largest U.S. ports expected to U.S. Northeast 10.34 5.5% continue, the remaining U.S. ports Eastern Canada 3.14 5.4% will be competing for a smaller share Great Lakes/Plains 3.55 4.0% of overall U.S. container traffic. Ports U.S. Southeast 3.70 6.8% with strength in container move- Source: Ocean Shipping Consultants, 2006. ments will look to leverage that strength, potentially at the expense of Delaware River ports have an New Jersey for warehouse and distri- other existing bulk and breakbulk opportunity to leverage geographic bution uses that has resulted in a mi- operations. proximity to a large population base. gration of distribution centers to- The region’s agglomeration of While a recent marine trade growth wards Greater Philadelphia. This infrastructure to support refrigerated outlook for the North Atlantic port trend represents an opportunity for cargo movement has created range shows growth fueled by inland Delaware River port interests to lev- economies of scale that maximize the markets,15 an expert panel found that erage proximity to distribution cen- cost effectiveness of facilities. More- the Delaware River’s best ters and position themselves as a cost over, such infrastructure clusters are opportunity to expand market share -effective way to access this network. very difficult and costly to duplicate; is in the northeast United States. However, the Port Authority of as a result, refrigerated cargo traffic is Greater Philadelphia’s large local New York and New Jersey is actively relatively stable at Delaware River consumer market that the Delaware addressing this trend by supplement- ports. Leveraging this strength is an River helped to create is largely re- ing expanded terminal capacity with opportunity to grow market share in sponsible for the river’s continued a “Portfields” initiative that aims to a important commodity for the re- viability as a commercial maritime recapture the migrating distribution gion’s overall port activity. highway. The regional consumer centers and strengthen the port’s ties Invest in Infrastructure market provides a stable source of to its local distribution networks. Enhancements cargo demand and therefore a strate- Greater Philadelphia port stake- gic opportunity for growth. Delaware holders should consider developing a To accommodate anticipated ad- River ports are located a short dis- similar proactive strategy for address- ditional business, Delaware River tance from two growing distribution ing migrating distribution centers as a ports will require strategic invest- hubs: south-central Pennsylvania and business development opportunity. ments in terminal and landside infra- the New Jersey Turnpike Corridor. structure capacity. Leverage Expertise in Niche From this perspective, Delaware Cargoes. Specialization of port op- Investment in Terminal Ca- River ports stand to gain from lim- erations16 could be a significant mar- pacity. Philadelphia’s container ca- ited availability of land in northern ket opportunity for the Delaware pacity is documented at 362,000 TEUs for the Packer Avenue Marine Terminal (with limited additional Figure 36: Container Market Share at North Atlantic Ports, 2005 container capacity at Tioga Termi- nal). Based on 2006 statistics from Port TEUs (000s) Market Share PRPA, the 247,211 TEUs consumed New York/New Jersey 4,793 47% 68 percent of the current container Hampton Roads 1,982 20% capacity. Montreal 1,255 12% Baltimore 603 6% As Figure 37 illustrates, realiza- Halifax 551 5% tion of a densification project (one of Wilmington, DE 251 2% four proposed projects under Philadelphia 205 2% PRPA’s Capital Enhancement Plan, Boston 189 2% and the one with the shortest build- St. Johns NF 111 2% out of 1 year) would provide Phila- Other 157 2% delphia with an additional capacity of Total - North Atlantic Ports 10,097 100% 750,000 TEUs, more than tripling its Source: OCS, 2006. current container capacity. Notes: “Other” category includes Port of Albany, NY, Providence,RI, New Haven and Bridgeport, CT, and Camden-Gloucester NJ.

32 SECTION 4: STRATEGIES AND SCENARIOS FOR DELAWARE RIVER PORT GROWTH

Existing and proposed capacity at should be geared towards improving Figure 37: Packer Avenue Marine Delaware River ports comes at a time road connections to regional destina- Terminal Container Capacity of projected exhaustion of existing tions. To this end, the Delaware Incremental container capacity at competitor River ports should consider its geo- PAMT ports. A North Atlantic port outlook graphic proximity to distribution TEU Capacity projects that 95 percent of the center growth markets as a strategic Current 362,000 planned container capacity by 2015 advantage and look to enhance con- With Densification 750,000 in the North Atlantic port range will nections with the Lehigh Valley, Car- Total TEUs 1,112,000 occur among the ports of New lisle, and Harrisburg areas. Develop- Source: Transystems’ Port of Philadelphia Forecast. York/New Jersey, Baltimore, Hali- ing linkages with these markets is an fax, Montreal, and the Virginia ports. opportunity for the region to estab- future. If demand expectations for the lish a stable niche market for its Rationalize Facility Utilization North Atlantic port range are near ports. and Planning. Without effective accurate, capacity utilization will be Currently, PennPORTS (an office collaboration and coordination, port at 93 percent, a rate well above the of the Pennsylvania Department of investments may yield an inefficient level associated with efficient port Community and Economic Develop- allocation of resources. It is easy to operations.17 ment that facilitates port and infra- imagine that without coordination, An overall increase in container structure projects) is working on an capacity for some types of cargo may demand, coupled with potentially initiative with PennDOT to improve be oversupplied, while others are displaced cargo due to capac- undersupplied. In areas that ity constraints at competitor the region has a dearth of ca- ports, suggest that Delaware pacity, business will be lost to River ports could capture ad- Terminal capacity investments must competitor ports outside the ditional container business. be linked with strategic investments region. Existing capacity and pro- in road and rail infrastructure. Public and private ports with posed capacity enhancements excess capacity will compete would help to prepare port internally for business, driving facilities for this potential down prices. Given that port growth. costs are but one part of the overall the east-west transportation corridor Investment in Landside Capac- expenses considered by supply chain spanning from U.S. 422 in Altoona ity. Any growth in port activity will managers, it is unlikely that undercut- to western Pennsylvania and Ohio. increase the strain on Greater Phila- ting prices is what draws business to The proposed Ben Franklin Corridor delphia’s existing landside infrastruc- the Delaware River ports. In this project would improve linkages be- ture. For this reason, terminal capac- scenario, pitting Delaware River tween the Port of Philadelphia and ity investments must be linked with ports against one another for cargo the Midwest, an integral element for strategic investments in road and rail that was destined for this region any- maintaining and growing port activity infrastructure. way hurts public and private opera- in Philadelphia. tors by lowering their revenues. The various infrastructure im- In the same way that PennDOT’s provement projects planned or un- State and local governments are “Ben Franklin” corridor has en- derway (described in Section II) will also harmed by this internal competi- hanced access to areas of western allow for higher volumes of cargo to tion, as lower revenues translate into Pennsylvania and southeastern Ohio, move more efficiency through the lower tax collections overall for the future infrastructure investments region. Given the magnitude of in- region. Even if state and local gov- should target strategic destinations to frastructure need, the best way to ernments wanted to encourage inter- improve overall connectivity between maximize the utility of investments is nal competition in the hopes of get- Delaware River ports and inland dis- to focus each investment on targeted ting a larger piece of the shrinking tribution destinations. objectives. For this reason, future pie, the economic impact analysis of infrastructure investments should be Collaborate for the Efficient the Delaware River ports discussed tailored towards achieving explicit Deployment of Resources in Section I made clear that states goals set forth in strategic plans. and local governments realize tax Efforts to grow Delaware River revenues from port activity even Given the strength of the con- port activity will be most effective if when it occurs outside their taxing sumer market in the northeast U.S., port stakeholders work together to jurisdiction. landside infrastructure improvements plan and develop strategies for the

33 SECTION 4: STRATEGIES AND SCENARIOS FOR DELAWARE RIVER PORT GROWTH

Coordinate Marketing. Carriers smaller cooperative efforts can build planning and investment. Of these and national shipping experts identi- trust for future collaboration. Joint scenarios, the expert panel found fied the region as having neither a facilities planning and market re- Scenario 3 to be the most likely out- positive or negative image, but rather search ensure an efficient allocation come as it most closely resembles the no real image at all. Given that each of investment, and coordinated mar- status quo. (See Appendix E for export entity in the region is small keting efforts will leverage individual cerpts from the panel discussion.) compared to competitors like the marketing budgets to provide a Scenario 1: Increasing Market Port of New York/New Jersey and broader reach and image. Share the Virginia ports, it is unsurprising

that marketing efforts to date have Summary of Factors not made the region a well-known Scenarios for Delaware River Assumption shipping destination. Port Growth ⇒ Delaware River ports increase Pooling resources to raise aware- With global trade volumes rising the share of U.S. waterborne ness of the Delaware River ports and competition among East Coast commerce from 5.5 percent to would provide an opportunity to ports intensifying, the study team 6.5 percent of the national mar- introduce the region to non- engaged a panel of national experts ket traditional trading partners that offer to better understand the range of Key Requirements growth potential, such as Asian and trade activity the Delaware River Eastern European lines. Rather than ports could expect in the future. ⇒ Inland transit times and cost to individual marketing efforts serve inland markets is im- designed to brand a particular proved facility, these efforts would With global trade volumes rising and ⇒ Growth in niche cargo present the assets of the re- competition among East Coast ports ⇒ Regional coordination in gion, such as proximity to intensifying, the Delaware River marketing and capacity man- population centers, transpor- agement tation networks, and expertise ports are poised for either growth or Risks in niche cargoes, as well as to decline. address concerns shippers ⇒ Absence of economies of may have, such as the depth scale and distance of the river. They evaluated prospects for three ⇒ Improved capacity and transportation networks at competitor Select Greater Philadelphia is a growth scenarios for Delaware River ports business marketing organization that ports: ⇒ Distance from Asian manufac- has successfully employed this ⇒ Increasing market share of total turing centers model; it proactively markets the area U.S. tonnage; to firms that could chose any region ⇒ Moderate growth; and Strategies and then later provides the resources ⇒ Declining market share of total ⇒ Leverage existing competitive for business to find the appropriate U.S. tonnage. strengths location within the region. Each scenario anticipates dredging of ⇒ Strategic infrastructure invest- A Continuum of Cooperation. the Delaware River channel to 45 ment Efforts to grow Delaware River port feet, a baseline prerequisite that ex- ⇒ Regional collaboration activity will be most effective if port perts emphasized was absolutely nec- Assumption. This scenario as- stakeholders work together to plan essary to simply maintain the region’s sumes that ports of the Delaware and develop strategies for the future. maritime competitiveness. River are able to capture an increased Unification of public facilities, while Scenario 1 – increasing market market share of port activity by 2020. a challenge with the involvement of share – requires regional coordina- Capturing additional market share three state jurisdictions and a com- tion, growing niche cargoes, and in- will require new strategies and ac- plex history, may be ripe for serious frastructure investment that outdoes tions, particularly in light of aggres- reexamination, particularly in light of competitors. Scenario 2 – moderate sive efforts by competitor ports on the success it has brought competi- growth – is dependent on public and the East Coast. In 2005, the Dela- tors such as the Port of New York/ private investments to improve dis- ware River ports carried 5.5 percent New Jersey. tribution networks. Scenario 3 – of the nation’s waterborne com- Even if unification proves too declining market share – reflects the merce. This included 12 percent of challenging or otherwise undesirable, absence of coordinated regional the nation’s petroleum shipped, ac-

34 SECTION 4: STRATEGIES AND SCENARIOS FOR DELAWARE RIVER PORT GROWTH

counting for more than three quar- facilities and other existing ports in creasing their container business. ters of the total tonnage moved on the region. Capacity constraints in New York the Delaware River. As the volume and elsewhere may push out these Key Requirements. Increasing of petroleum is not expected to in- cargo types. Delaware River ports market share requires that Delaware crease due to refinery capacity con- can build upon existing niche mar- River ports cultivate new business straints, growth would have to be kets more efficiently than developing flows to inland markets with trip achieved in non-crude cargoes. specialization in new areas. time and cost improvements. Reli- Without commodity specific pro- ability, vessel turnaround time, and Most successful regional ports, jections, estimates of necessary seamless intermodal connections are such as the Virginia ports and the growth levels by cargo type of primary concern to supply chain Port of New York/New Jersey, have (container, bulk, and breakbulk) can- managers, assuming the port’s cost consolidated to create marketing en- not be estimated. Reaching 6.5 per- structure is not grossly out of line. tities that recognize the increasing cent market share without growth in The ports’ future will depend in part scale of shipping companies and petroleum will likely necessitate ex- on identifying opportunities to im- competitive ports driving the indus- pansion in volume for each cargo prove intermodal connectivity, iden- try. Currently, the individual ports of type at levels beyond national growth tifying corridors to and from inland the Delaware River do not have the rates. If container volumes needed to growth markets, and strategically market power individually nor the be 8.8 percent compound annual focusing infrastructure investment combined resources to compete with growth rate (CAGR), twice the na- on developing those connections. emerging North Atlantic ports. Op- tional growth rate of 4.4, total vol- portunities for coordination include More competitive distribution ume for the Delaware River ports unified international sales teams and networks to inland markets would would grow from 317,000 in 2000 to more impactful presence at trade present the opportunity to expand roughly 1.5 million TEUs in 2020, events. the base for the Delaware River’s more than could be accommodated niche cargoes, such as steel and per- Risks. The Delaware River ports at just Packer Avenue and Tioga Ma- ishables. The Delaware River ports are currently at a disadvantage in rine Terminals with densification, but will also be well positioned to divert terms of economies of scale and likely feasible if spread across the niche bulk and breakbulk cargo away inland market connections and ef- Philadelphia Regional Port Authority from competitors focused on in- forts to improve may not be suffi-

Figure 38: Summary of Growth Scenarios

Scenario 1: Scenario 2: Scenario 3: Factors Growing Market Share Moderate Growth Declining Market Share

♦ Delaware River ports increase ♦ Delaware River ports de- the share of U.S. waterborne ♦ All cargo growth at 0.9 percent crease the share of U.S. Assumptions commerce from 5.5 percent to ♦ Container growth at 4.4 per- waterborne commerce from 6.5 percent of the national cent, equal to the national rate 5.5 percent to 4.5 percent of market the national market ♦ Inland transit times and cost to serve inland markets is improved ♦ Petroleum import levels must be maintained ♦ Growth in niche cargo Requirements ♦ Bulk and breakbulk cargoes ♦ None ♦ Regional coordination in remain dominant, particularly marketing and capacity steel and perishables management ♦ Absence of economies of scale ♦ Improved capacity and transpor- ♦ Acceleration of global shift to ♦ Continued containerization tation networks at competitor alternative fuels Risks ♦ Decline in niche cargoes ports ♦ Weak regional economic and ♦ Lack of goods to export ♦ Distance from Asian manufactur- demographic growth ing centers ♦ Leverage existing competitive strengths ♦ Leverage existing competitive ♦ The absence of coordination to leverage existing assets Strategies ♦ Strategic infrastructure invest- strengths and improve transportation ment ♦ Regional collaboration networks ♦ Regional collaboration

35 SECTION 4: STRATEGIES AND SCENARIOS FOR DELAWARE RIVER PORT GROWTH

cient to overcome the advantage held among the region’s ports does not container volumes from 317,000 in by other East Coast ports. artificially deflate profits. 2000 to 605,000 TEUs in 2020. This volume of activity could be entirely The Delaware River ports will not Scenario 2: Moderate Growth accommodated at Philadelphia Re- be alone in upgrading transportation gional Port Authority facilities, pro- infrastructure and adopting policies Summary of Factors vided that densification occurs as to improve freight movement. The Assumptions envisioned, which would add Heartland Corridor serving the Vir- 750,000 slots to the existing 362,000 ginia ports will cut travel times to the ⇒ All cargo growth at 0.9 percent available at Packer Avenue and Tioga Midwest, and the Port of New York/ ⇒ Container growth at 4.4 percent, Marine Terminals. The existence of New Jersey has considered subsidiz- equal to the national rate other container handling facilities in ing rail rates to ease congestion on Key Requirements the region suggests that even with regional roads. ⇒ Petroleum import levels must be the assumption that the region will Delaware River ports will have maintained match national container growth difficulty attracting additional con- ⇒ Bulk and breakbulk cargoes re- rates, Delaware River ports will have tainer traffic given their location and main dominant, particularly steel excess container handling capacity lack of historic container business. and perishables through 2020. The distance from Asian manufac- Risks Key Requirements. This sce- turing centers that are the origin of nario’s plausibility rests upon main- increasing container traffic ⇒ Acceleration of global shift to taining existing core strengths exacerbates this. As those Successful implementation of three in niche cargo markets. For manufacturing centers in East total tonnage to grow, petro- Asia move westward, Suez interlocking strategies - leveraging leum import levels must be shipping routes will become existing strengths, strategic maintained. The location of more competitive. While this infrastructure investment, and regional oil refineries in the region, presents an opportunity for collaboration - are preconditions for absence of planned new facili- the East Coast to capture ties, and the fact that refineries business from West Coast increasing the market share of trade elsewhere in the country are at ports, southern East Coast volumes at the Delaware River ports. capacity limits the threat of ports will have an advantage losing business to competitor over the Delaware River ports based alternative fuels ports. on travel times from the Straits of ⇒ Weak regional economic and Gibraltar. demographic growth Maintaining prominence in key Strategies niche bulk and breakbulk cargoes will Strategies. Successful implemen- be necessary to achieve growth. Sig- tation of three interlocking strategies, ⇒ Leverage existing competitive nificant quantities of steel are han- leveraging existing strengths, strate- strengths dled through private ports in the area gic infrastructure investment, and ⇒ Regional collaboration and this may be enhanced by addi- regional collaboration are precondi- Assumptions. Consistent with tional investment in United States tions for increasing the market share projections by Global Insight and steel manufacturing by foreign firms. of trade volumes at the Delaware forecasts prepared by the Army This development may stimulate ex- River ports. Corps of Engineers and others, the ports through Delaware River ports As this scenario requires im- projected growth of 0.9 percent and help address the region’s trade proved transportation networks and CAGR is envisioned for the Dela- imbalance. may necessitate expansion or recon- ware River ports, despite national Refrigerated cargo can be ex- figuration of port facilities, region- cargo projections for all cargo at pected to remain strong, particularly wide market research for specific double this rate. At this rate, Dela- in Wilmington which benefits from commodities and cargo types should ware River port tonnage will expand being closer to the ocean than Phila- be a precursor to investment deci- from 72 million tons to 82 million delphia and South Jersey ports with sions. To guide resources efficiently tons between 2000 and 2020. comparable refrigerated warehousing and effectively throughout the re- Growth in containerized cargo is and other facilities. Barriers to entry gion, regional cooperation among all projected to mirror the national rate in this market segment are high, public and private entities can ensure in this scenario, at 4.4 percent making the region best positioned to that additional capacity is used and CAGR. This would increase regional attract additional container growth in that internal competition for business

36 SECTION 4: STRATEGIES AND SCENARIOS FOR DELAWARE RIVER PORT GROWTH

the shipment of perishable items. 4.5 percent of the national mar- shippers in general; and ket Risks. Erosion of the current ⇒ As breakbulk and bulk cargoes volume of petroleum is not likely to Risks are converted to containerized shipping, the Delaware River come from competition, but instead ⇒ Continued containerization result from changes in oil consump- may lose business in the niche ⇒ Decline in niche cargoes cargo areas that it once domi- tion patterns. Environmental con- ⇒ Lack of goods to exports cerns and high oil prices may cause a nated. shift to other fuels that are less likely Strategies Further erosions to the region’s to be trafficked on the Delaware ⇒ The absence of coordination to niche cargoes may arise from a pro- River. leverage existing assets and im- longed slump in the real estate sec- prove transportation networks. tor. As new housing starts decline, The Delaware River ports can Assumption. This scenario asso to does the demand for construc- realize moderate growth, albeit at tion materials in which the Delaware lower levels than national growth, so sumes that the Delaware River ports’ market share will decline from 5.5 River ports have traditionally ex- long as the region’s population and celled. economic conditions continue to percent to 4.5 percent of waterborne rise. Delaware River ports have fo- commerce. This assumption is based Uncoordinated efforts to attract cused on serving the local consumer on maintenance of the region’s share containers away from other East market; should conditions deteriorate of crude traffic but declines in other Coast ports without the benefit of without the region improving cargo types, although vulnerability of improved transportation link- its service to inland markets, Uncoordinated efforts to attract ages to inland markets will port activity could be expected divert resources away from to slow proportionally. containers away from other East Coast investments that would main- ports without the benefit of improved tain and expand traditional Strategies. This growth transportation linkages to inland cargoes, creating opportunities scenario is contingent on lev- that other ports could exploit eraging existing strengths and markets will divert resources away from to lure that business away. regional collaboration. In ar- investments that would maintain and South Atlantic and Gulf Coast eas where growth is possible, expand traditional cargoes. ports closer to the South such as containers, region- American and Australian ori- wide facility planning can pre- the region’s petroleum trade is a pos- gins of many of the perishable items vent the building of excess capacity. sibility. that currently arrive in the United Additionally, joint marketing efforts States via the Delaware River are can support the maintenance and Delaware River ports could ex- perience volume growth even while already expanding facilities to handle expansion of niche cargoes in the those cargoes. face of competition from more coor- losing market share. In this scenario dinated ports along the East Coast. it is unlikely that container growth Strategies. As a result of rising would match the national rate of 4.4 trade volumes, Delaware River ports Regional cooperation and priority percent CAGR. can expect to gain some trade vol- setting for investment in landside ume without making any strategic transportation can improve connec- Risks. Without a great increase in population or efficient inland con- actions. Maintaining the region’s tions to inland markets that the Dela- market share, however, is an addi- ware River ports have not tradition- nections, it is unlikely that consumer demand for products that move tional hurdle given that improve- ally served. This serves as a hedge ments at competitor ports are already against economic and demographic through the region’s ports will grow. As a relatively small player in the underway. Without coordination for decline in the local market, but is not improved distribution networks and as essential as in Scenario 1. container business, the trend of moving more and more commodities by efforts to retain and expand niche Scenario 3: Declining Market container rather than shipping them cargoes, market share decline can be Share as bulk or breakbulk could hurt re- expected. Summary of Factors gional port activity in two ways: Assumption ⇒ The distance up the Delaware River and lack of Asian business ⇒ Delaware River ports decrease relationships makes the region’s the share of U.S. waterborne ports unattractive to Asian commerce from 5.5 percent to growth markets and container

37 SECTION 5: CONCLUSIONS AND KEY RECOMMENDATIONS Section 5: Conclusions and Key Recommendations Conclusion and maintain or expand market share rest upon building on what the re- Key Recommendations For more than 300 years, Dela- gion already does well, as opposed to ware River ports have been vital to Based on its key findings, the chasing business for which we are ill- Greater Philadelphia’s development. Economy League developed a series suited or at a competitive disadvan- Going forward, the question is of recommendations highlighting tage. whether the ports' diverse entities opportunities for the region’s ports Investment in Infrastructure and interests can come together to to enhance advantages and improve Enhancements leverage strengths, confront weak- competitiveness through a renewed nesses, and gain from global trends focus on coordination and compre- Expanding existing lines of busi- driving the future of maritime com- hensive approaches to maritime business or pursuing new ones will re- merce. ness development. They include: quire investment in facilities, infra- Summary of Key Findings structure and marketing. Piecemeal This report has described or uncoordinated approaches should be avoided to ensure the current composition of The region’s ports remain viable Delaware River ports and that the scarce resources spent highlighted the key factors despite several limiting factors and have maximum impact. that will impact their future. could gain from global trends Through densification and The report has illustrated that other investments in existing driving the future of maritime facilities, the region has the Delaware River ports are char- commerce. acterized by: capacity to accommodate projected container traffic, and ⇒ A low number of jobs also has locations identified as with high wages ⇒ Leverage existing assets that are suitable for future port development. ⇒ Niche – and largely un- both inherent (geographic) and containerized –commodities commodity-based (niche car- Access to inland markets is critical to port competitiveness. For this ⇒ Largely constrained landside in- goes) reason, adequate rail and road con- frastructure ⇒ Strategically investing in infra- nections from port facilities to distri- ⇒ A drastic import/export trade structure enhancements (both terminal and landside) bution networks is critical to port imbalance expansion. In particular, competitive ⇒ ⇒ A history of disjointed planning, Collaborating to rationally lever- rail service will require increasing the marketing, and development age existing assets and strategi- region’s double stack clearance. Im- ⇒ Existing capacity for expansion cally invest in the future. proving double stack rail access These factors have dictated the im- Leverage Existing Assets would enhance port capacity by mak- pact of Delaware River ports on the With centuries of continuous oping freight movement more efficient. Greater Philadelphia economy and erations, Delaware River ports have Expanded double stack clearance now comprise the framework for managed to survive adaptations in would also help the port and region evaluating potential future growth of global trends, technology, and de- develop linkages with the Midwest, a port activity. mand. Nevertheless, to improve its critical growth market for potential competitiveness will require the expansion of Delaware River port Within this framework, the report activity. also illustrates that several factors Delaware River ports to take a proac- will impact the potential future tive approach in reconstituting its Collaborate for Efficient growth for Delaware River ports and business to define a competitive po- Deployment of Resources will continue to drive the future of sition in the 21st century port industry. Although past port unification maritime commerce in the region. efforts have experienced limited suc- They include: To do so, Delaware River ports cess, stakeholders recognized the ⇒ Evolving global shipping trends should leverage their existing assets, benefits of coordinating and rational- ⇒ Investments made by competitor including expertise in niche cargos, izing port operations. Business devel- ports proximity to consumer markets, and opment and national experts are clear ⇒ The ability of Delaware River opportunities for improved port fa- that institutionalizing collaborative ports to adapt to the fluid com- cilities. Efforts by the Delaware regional port activity is a prerequisite petitive landscape. River ports to grow trade volumes

38 SECTION 5: CONCLUSIONS AND KEY RECOMMENDATIONS

for enhancing the competitive posi- models of public and private financ- A Defining Moment tion of the Delaware River ports. ing and management of design, con- With three states and a mixture of struction, and operations of new and The Delaware River has reached a public and private facilities, a single redeveloped port facilities. As ship- critical juncture in its commercial ownership and management struc- ping companies, investment banks, history. Potential for port growth is ture for the region’s ports is unlikely, and others seek to invest in ports, real but will hinge on the region’s but there are key initiatives that could public authorities should carefully ability to take a coordinated ap- be undertaken to better coordinate explore potential costs and benefits. proach to future development. This port operations and development. Consideration also should be given situation analysis has highlighted Opportunities for doing so include: to the off-site infrastructure demands both opportunities and challenges impacting the future of maritime ⇒ Joint market demand and commerce in Greater Philadel- cargo strategy phia. As the region continues ⇒ Multi-state waterfront and Successful growth of regional port to reassess and revaluate its port land use planning activity will require a diverse group relationship to the Delaware ⇒ A region-wide capacity River, port functions have the analysis and demand fore- of port interests to rally around opportunity to remain an im- cast to prevent over or mutually beneficial goals. portant part of the Greater under supply of facilities, Philadelphia economy as it has including comparative for over 300 years. Successful cost/benefit analyses of from port development. Transporta- growth in regional port activ- densification and expansion option improvements are likely to re- ity will require a diverse group of portunities main a public responsibility, even port interests to rally around mutu- ⇒ Joint marketing and branding with private port development, and ally beneficial goals. Only through efforts. may be a prerequisite to future in- strategic and collaborative action can The regional port industry would vestment. stakeholders ensure that the Dela- also benefit from a more holistic ap- ware River ports will thrive in the

proach to port-related investment future. and development. A comprehensive approach to future port planning should include evaluation of various

39 APPENDIX A: GLOSSARY Appendix A: Glossary

Backhaul Double Stack Jones Act To load a freight vessel for its return Rail routes with overhead clearances Also known as the Merchant Marine to its point of origin. sufficient for trains carrying two con- Act of 1920, the Jones Act is a fed- tainers stacked atop one another to eral statute that governs the rights of pass through. sailors and restricts the movement of goods between U.S. port. Goods Berth may be moved by ship between U.S. Where a vessel “parks” at a port for Drayage ports only if the ship was made and loading and unloading. Logistical service in the shipping in- registered in the United States.

dustry. Breakbulk Labor Starts Goods shipped in small separable Dredging Appointed times per day when load- units. For example, bags of cocoa ing or unloading of a vessel may be- beans. Underwater excavation to remove bottom sediments and move them gin.

elsewhere, thus increasing the chan- Bulk nel depth and facilitating the movement of larger or more heavily laden Land bridging Unpacked, unbundled cargo. It may vessels. Moving goods from West Coast be liquid (e.g., petroleum products) ports to the central and eastern U.S. or dry (e.g., gravel or sand). via long-haul trucking or intermodal DSPC rail. CAGR Diamond State Port Corporation. The Delaware State agency that owns Compound Annual Growth Rate, the and operates the Port of Wilmington. Landside Logistical Networks year-over-year growth rate. Often The management of the flow of applied to changes in tonnage or goods, incorporating information, value of cargo in relation to port ac- DWT/Deadweight tonnage transportation, warehousing, and tivity. The weight of a loaded ship minus transportation, once cargo has been the weight of an empty ship. The offloaded from the ship. Channel Depth DWT includes the weight of cargo, crew, passengers, crew, and fuel. Distance between the waterline and Lighter bed of the dredged body of water. The act of transferring a commodity Gantry from ship-to-ship without anchoring. This is common practice with oil Containerization Crane used to move breakbulk cargo and containers on and off ships. tankers because the large vessels can- System of freight transport where May either be on rails or wheels. not fit into ports. goods are placed in standardized containers that can be loaded onto ships, rail, or trucks. ILA Liner Operations The International Longshoremen’s Regularly scheduled commercial ship sailings along established trade lanes. Densification Association is a union of maritime workers. Process by which capital upgrades are made at existing port facilities to Megaship increase the efficiency of land use. Intermodal Transportation Ships that typically have capacity for Freight or passenger movements that more than 8,000 TEUs. Distribution Facilities involve multiple forms of transportation between origin and destination. Warehouse/logistical centers where goods are organized for delivery.

40 APPENDIX A: GLOSSARY

Perishables Short Sea Shipping TEUs Products that are temperature sensi- Hub and spoke system of freight Twenty-foot Equivalent Units, the tive, such as produce, meats, and movement to alleviate congestion standard capacity measure for con- pharmaceuticals. and accommodate overflow demand. tainers. Most containers today are forty feet, or 2 TEUs.

Project Cargo Short Ton Tidal Delays Freight that is unusually large in ei- A measurement of weight equal to ther weight or size. An example of 2,000 lbs. A long ton is equal to The amount of time a ship spends project cargo in this region is large 2,240 lbs or 1,000 kilograms. waiting for high tide because depth is windmill components destined for insufficient to sail at low tide. Gamesa, a Spanish manufacturer and SJPC supplier of energy technologies with Tonnage facilities in Bucks County. South Jersey Port Corporation. State- created agency that owns and oper- The cargo capacity of a ship, a meas- ates public port facilities at the Port urement of volume. PRPA of Camden.

Philadelphia Regional Port Authority. Trade Rationalization The state-created entity that is re- Strategic Port Shipping patterns where goods get as sponsible for public port manage- Ports designated by the military as close as possible to their final desti- ment in Philadelphia. having logistical capabilities, security, nation by water. and capacity sufficient for the handling of military cargo. RESET Transshipment

Military equipment refurbishment Goods that are shipped to one loca- program. Terminal tion, transfer to another vessel, then Maritime terminals are facilities continue on to their final destination. where cargo is moved from ships to RoRo other modes of transportation. Cargo, such as cars, machinery, and farm equipment, that can roll on and roll off vessels.

41 APPENDIX B: HISTORY OF THE DELAWARE RIVER PORTS Appendix B: History of the Delaware River Ports

Summary for maritime commerce and quickly and by the time of the Revolutionary purchased land within close prox- War, Philadelphia had become a pre- ⇒ Philadelphia and surrounding imity to the river. From the very be- mier port destination for both do- towns along the Delaware River ginning, the Delaware River played a mestic and international trade and were settled to take advantage of critical role in Philadelphia’s emer- the third most important commercial the safe harbor and access to the gence as a commercial powerhouse hub in the British Empire behind resource-rich inland areas. in colonial America. only London and Liverpool.22 ⇒ Coal exports from the Lehigh Valley, development of railroads, The Delaware River’s commercial attractiveness was enhanced by its and manufacturing activity in the The Industrial Revolution region supported port growth in resource-rich hinterlands character- the 19th century. ized by fertile farmland and ample The discovery of anthracite coal ⇒ As coal exports waned, manufac- forestland, providing the River’s in the Lehigh Valley in 1792 acceler- turing moved, and port facilities ports with a natural agricultural ap- ated Philadelphia’s rise during the failed to modernize quickly to peal. The Delaware Valley was also industrial revolution as the manufac- attract containerized cargo; Dela- characterized by a temperate climate turing hub of America. The advent ware River ports declined in and an inland location, affording of the steam locomotive enhanced prominence. Delaware River ports a safe harbor access from the port to coalmining ⇒ Efforts to consolidate regional and immediate access to inland trade territory and other inland locations. management of port opera- While the railroad industry tions have been attempted From the very beginning, the Delaware marginalized the use of canals, and failed, yet stakeholders Philadelphia successfully lev- still see opportunities for River played a critical role in eraged railroads as a new improved efficiencies Philadelphia’s emergence as a means to promote port activ- through coordination and commercial powerhouse in colonial ity. By the close of the 19th collaboration. America. century, every wharf in the city had direct rail access, with service offering rates lower Origins than that of New York or Boston.23 routes, increasing Philadelphia’s vi- In addition, many of the marine ter- American cities – especially along ability as an international and domes- minals were owned by the rail com- the eastern seaboard – have histori- tic port of call. cally developed around ports, which panies themselves, allowing ships to provided commercial access to wa- However, Delaware River ports dock and unload free of wharfage terways and allowed for the conven- also faced an assortment of natural charges.24 These features increased ient exchange of both people and impediments. First and foremost, the competitiveness of Philadelphia goods. Today, maritime commerce Philadelphia’s inland location, while as a port of call. safely removed from the ocean, was remains critical to the national econ- In the late 19th century, advances less convenient than coastal locations omy, accounting for over 95 percent in steamship technology improved like New York. Moreover, navigating of the United States’ international the viability of transatlantic shipping 19 the River was considered hazardous trade by volume. routes and accelerated international because of its shallow water and scar- maritime commerce along the East In Greater Philadelphia, commer- city of lighthouses and accurate Coast of the U.S. Demands of bigger cial activity originated with the Dela- maps. On arrival in Philadelphia and faster ships pressured ports to ware River. The land was initially ships were greeted by thirty-foot high modernize facilities. Philadelphia inhabited by the Lenape (Delaware) riverbanks, further complicating the responded in 1895 by deepening the people, and then settled by Europe- logistics of cargo movement.20 By Delaware River from its natural ans in the early 1600s. After receiving 1720, Philadelphia had passed depth of 17 feet to 26 feet. the charter for Pennsylvania in 1681, Charleston, SC as the third largest William Penn founded Philadelphia American port in annual trade vol- As a result, Philadelphia was able on the river’s western bank and be- ume.21 to add new transatlantic lines to sup- gan dividing parcels of land among port increases in both goods move- Growth in maritime commerce backers. Penn’s investors were im- ment and passenger travel.25 How- mediately drawn to the opportunity continued through the 18th century,

42 APPENDIX B: HISTORY OF THE DELAWARE RIVER PORTS

ever, as the new century would illus- By 1910, approximately 4 million pace in this regard diminished Phila- trate, the more immediate impact of tons of coal were being exported delphia’s relative attractiveness and steamship technology was on Phila- annually from Philadelphia to points utility of its port facilities. delphia’s shipbuilding capacity. Al- along the East Coast and to the West

ready the premier 18th and 19th cen- Indies, while annual oil exports tury port for North American ship- ranged from 250 million to 400 mil- The Post-War Period building, Philadelphia was poised to lion gallons.27 Philadelphia’s sugar Philadelphia’s post-World War II leverage steamship technology to industry also experienced rapid industrial decline had a markedly become a dominant force in a new growth in the early 20th century, due damaging impact on port competi- era of 20th century shipbuilding. in large part to the opening of the tiveness. Compounding the city’s Panama Canal in 1914 that enhanced At the turn of the 20th century, industrial decline was a weakening East Coast access to the port from Philadelphia was still a top tier East market for Pennsylvania coal and the Hawaiian Islands. That year, Coast port of call, bolstered in large steel production, which had driven a Philadelphia refined approximately part by the Delaware Valley’s indus- large share of Philadelphia export 500,000 tons of raw sugar, approxi- trial development into a manufactur- activity through the first half of the mately one-sixth of all sugar refined ing powerhouse. In 1912, Philadel- century. The use of oil and natural in the United States.28 Several invest- phia produced five percent of all gas decreased demand for coal, and ments were made to waterfront fa- manufactured goods in the United high sulfur levels characteristic of cilities in this period to support in- States, much of which were exported Pennsylvania anthracite damaged its dustrial growth, including a state-of- through the city’s port facilities. competitiveness in the remaining the-art grain elevator at Girard Point While Philadelphia had made a name coal market. for itself in the textile industry, Philadelphia’s export market the city also exhibited world- also suffered from the decline class strength in a variety of Despite the improvements and a robust of Pennsylvania’s steel indus- building industries, including th export market, by the late 19 century try, which by the 1950s and lumber, concrete, paints, roof- Philadelphia had begun to lag behind 1960s had begun to succumb ings, and fixtures.26 Industrial to rising costs, material short- activity was also strong else- port competitors in the effort to ages, environmental regula- where in the region, especially modernize port facilities. tions, and overseas competi- in cities and towns along the tion. The resulting economic Delaware River. decline had a harmful effect A variety of export markets were and an ore handling plant at Port on Philadelphia port activity, which thriving, including coal, petroleum, Richmond. relied on the city and state’s once- iron, machinery, cotton, leather, strong industrial base for a viable Despite the improvements and a grain, livestock, lumber, fertilizer, export market to sustain global com- robust export market, by the late 19th and tobacco. Bristol (PA) had be- petitiveness.31 century Philadelphia had begun to come a primary point of connection lag behind port competitors in the In fact, Philadelphia’s most sig- from the Delaware River to the Le- effort to modernize port facilities, nificant maritime activity during the high Valley coal region. It also negatively impacting the port com- mid-20th century was at the Navy boasted mill operations, developing plex’s global competitiveness. Be- Yard. Its 40,000 wartime employees industry strengths in wool, silk, and tween 1900 and 1907, the city’s rank- built 53 ships and repaired over 500 felt production. Trenton was a pri- ing among worldwide ports in vol- more, earning it the moniker mary producer of machinery and ume of trade fell thirteen spots, from “Arsenal of America.”32 The Navy agricultural equipment, as well as 38th in 1900 to 51st in 1907.29 Princi- Yard was able to satisfy the require- automobiles, carriages, bridges, and pal among modernization efforts was ments of building large military ves- elevators. Camden had developed a deepening the Delaware River, which sels due in part to deepening of the number of specialties, including com- had become increasingly important Delaware River to 40 feet in 1941.33 mercial and military shipbuilding, to account for rapid growth in ship However, after the war the demand iron and wood products, paper, size. At the time, the depth of the for shipbuilding dropped precipi- paints, and coffee. Chester was a na- Delaware Channel was 28 feet, seven tously, and the Yard eventually tional leader in oil refining, while feet shallower than that of Boston ceased operations as a U.S. Navy Wilmington boasted the largest pow- and Baltimore and 10 feet shallower facility in 1995. der making plant in the world. 30 than New York. The failure to keep

43 APPENDIX B: HISTORY OF THE DELAWARE RIVER PORTS

Historical Port Governance rect role in maritime trade on either Recognizing the role regional inside of the River. fighting had played in accelerating Recognition of declining standing port decline, leaders in Delaware, th For most of the 20th century, in the early 20 century spurred what New Jersey, and Pennsylvania began Delaware River ports struggled to became a century of port governance to call for “port unification,” spark- keep pace with an evolving maritime change. In 1907, Philadelphia Mayor ing the most concerted attempt at industry, resulting in a steady deterio- John Rayburn moved to create a Mu- regional port governance in the his- ration of port business. In the 1980s nicipal Department of Wharves, tory of the Delaware River. Champi- this decline became more pro- Docks, and Ferries, charged with ons of the port unification cause in- nounced. Between 1981 and 1987, overseeing maritime activity and co- cluded: New Jersey Governor Tho- the region’s non-petroleum imports ordinating improvements to port mas Kean; Pennsylvania Governor 34 and exports fell by 23 percent, with facilities. Through the 1910s and Robert Casey; business-led groups, exports dropping by 74 percent.37 1920s, the Department oversaw a such as the Greater Philadelphia This decline caught the attention of quadrupling of the number of pub- Chamber of Commerce and the Pen- regional port stakeholders, prompt- licly owned piers. New “finger piers” jerdel Council; and the Maritime Ex- ing several investigations that con- employed new technology to im- change, an organization of port firmed the ports’ overall state of cri- prove the efficiency of multimodal stakeholders.40 Delaware Governor sis.38 cargo movement, emphasizing con- Michael Castle was involved in initial nections between railroads and load- While some were quick to blame unification discussions but would not 35 ing docks along Delaware Avenue. the port complex’s shallow channel continue to play an active role. and inland location for its weakened While Philadelphia was commis- Also endorsing unification was a sioning a municipal depart- gubernatorial panel commis- ment to manage its port facili- For decades, ports on both sides of the sioned by Governor Casey ties, competitors had begun to and led by SmithKline see the benefits of inter- river had resisted developing a regional Beecham CEO Henry Wendt jurisdictional collaboration in alliance for port governance, funding, to develop recommendations port governance. After many for resuscitating the Philadel- years of interstate battles, in and operations, opting instead to protect individual port interests at the expense phia ports. The Wendt report 1921 New York and New Jer- resolved that the Common- sey formed the Port Authority of overall port competitiveness. wealth must take two steps to of New York, later renamed revive port activity: 1) pur- the Port Authority of New York and chase the ports from the City of condition, many came to realize that New Jersey, to oversee both states’ Philadelphia; and 2) unify the ports one of the most significant impedi- port infrastructure. As the first bi- of Pennsylvania and New Jersey un- ments to growth was in fact self- state port authority in the United der the Delaware River Port Author- imposed. For decades, ports on both States, New York/New Jersey eased ity (DRPA). According to the com- sides of the river had resisted devel- political tension and became a model mittee report, these actions would oping a regional alliance for port for regional port governance. have three specific benefits: governance, funding, and operations, In Philadelphia, regional port opting instead to protect individual ⇒ A state takeover of Philadelphia’s governance was much slower to take port interests at the expense of over- ports would put Pennsylvania and hold. In 1919, New Jersey and Penn- all port competitiveness. While other New Jersey, which already con- sylvania created the Delaware River regions had forged institutionalized trolled the ports of Camden un- Joint Bridge Commission, which partnerships, Philadelphia’s intra- der the South Jersey Port Corpo- managed the construction of the regional battles for shrinking port ration, on equal political footing; Delaware River Bridge, later renamed business was growing increasingly the Benjamin Franklin Bridge. In fierce, prompting a 1988 DRPA ⇒ The combination of state owner- 1948, the Commission recommended study to conclude: “‘The ports of the ship and DRPA management the creation of a joint port authority, Delaware are a maritime house di- would afford the ports an un- and in 1952 the Delaware River Port vided against itself. The outside ob- precedented level of capital to Authority (DRPA) was established as server need only spend a short pe- pursue much needed improve- 36 the Commission’s successor. How- riod’ with the port ‘community to ments to infrastructure; and ever, the DRPA failed to take control become convinced he has walked ⇒ DPRA control would represent of the region’s commercial port in- onto the battlefield of a river war.’”39 terests and has played only an indi- concerted regional port govern-

44 APPENDIX B: HISTORY OF THE DELAWARE RIVER PORTS

ance, institutionalizing bi-state board chairman, a series of additional and flexibility should the takeover cooperation and mitigating river board appointments, and a national occur.44 infighting that had threatened search for a qualified CEO. It also Two years after the DPRA take- overall port competitiveness. empowered the DRPA to engage in over process had begun, legal and the final phase of port unification: In July 1989, Pennsylvania pur- political battles had paralyzed unifi- the official takeover of PRPA and chased Philadelphia’s port facilities, cation efforts. By 1996 very few pro- SJPC port facilities.43 replacing the Philadelphia Port Cor- ponents of the original plan re- poration with the Philadelphia Re- Considered at the time to be a mained. To many, it seemed the uni- gional Port Authority (PRPA). Unifi- two-year process, DRPA assumption fication effort had actually soured cation was the first of PRPA’s three of bi-state port ownership was al- port relations, between port stake- strategic initiatives, which also in- most immediately snagged by intense holders and DPRA officials, between cluded retention and expansion of politicking and legal challenges. By the two states, and within the states Pennsylvania port business and de- the end of 1994, port unification was themselves. The final death knell to velopment of the South Philadelphia in jeopardy. A lawsuit filed by Tho- unification was delivered in 1998, rail yard. In creating the PRPA, the mas Holt, owner of the largest pri- when the SJPC withdrew its offer to state pledged $33 million towards vate operating port facility in the re- voluntarily turn over its ports to the initial port improvements, with the gion, argued that the DRPA’s sub- DRPA, asking instead for an annual promise of additional future funds sidization of public ports would rep- rent payment of $2 million. SJPC from DRPA’s expanded coffers.41 resent unfair competition with pri- also insisted on the DPRA assuming vate facilities. Also at issue was intra- its liabilities, including debt service After nearly two years of state state anger among New Jersey legis- obligations, environmental problems, leadership change and bi- and pending litigation. Such state political posturing, in an agreement on the part of 1992 New Jersey and Penn- DPRA would have required sylvania both passed bills a similar arrangement with that dramatically expanded Bi-state port ownership was almost PRPA. DRPA’s ability to manage a immediately snagged by intense politicking unified port. The DPRA’s and legal challenges. By fall of 1998, port unifica- revised compact allowed the tion was all-but abandoned. Authority to: “acquire rail- The CEO of the Ports of roads and related facilities, Philadelphia and Camden, even using the power of hired after a national search lators at Governor Christie Whit- eminent domain; operate terminals, following the 1994 merger, decided man’s board appointment choices, transportation and commerce-related not to pursue renewal of his contract with several State Senators threaten- facilities; engage in a wide range of and left the region. Port executives ing to block the appointments alto- economic development and job- promised employment in the unified gether. creation initiatives; and consolidate port agency moved on to other posi- government-owned docks and termi- The mechanics of staff merger tions. By that time a judge had dis- nals into a single operation and mar- had also become contentious, com- missed Holt’s lawsuit questioning the ket the area’s public and private port plicated by a provision requiring that legality of public subsidies, but unifi- facilities worldwide.”42 no port employees be fired in the cation efforts had been irrevocably process. Finally, renewed port activ- damaged. In December 1993, the bi-state ity drove port stakeholders to protest merger was approved by the PRPA Recognizing the reality of the to unification and explicitly act in and SJPC, creating the Ports of situation, the Ports of Philadelphia ways that would hinder the takeover. Philadelphia and Camden, a not-for- and Camden board members decided On both sides of the river, port lead- profit subsidiary of the DPRA to be to cut their losses and devised a new ers began pursuing new leases and governed by an 18-member board, plan to develop unified port market- maverick port operations that would with nine appointees from each state. ing, resolving that each state would ultimately limit the DPRA’s authority Made official in May 1994, the retain rights to own and operate its merger set in motion the naming of a port facilities separately.45

45 APPENDIX C: METHODOLOGY FOR ECONOMIC IMPACT ANALYSIS Appendix C: Methodology for Economic Impact Analysis

Calculating Impacts to supply labor to assemble/improve parts of three states, each with its To estimate the magnitude of the inputs into a final product or own unique tax system and tax rates, economic impact of the port indus- service. When local households it was necessary to distribute the total try, information regarding 2005 activ- spend their after-tax earnings for economic impact generated by the ity at Delaware River marine ports in household consumption, it creates IMPLAN model across the three the 11-county Philadelphia-Camden cycles of wage generation and more states. The total changes in employ- metro area was compiled. This as- household spending. This describes ment, which IMPLAN provides on a sessment includes maritime trade the induced impact. The sum of the place of work basis, were distributed activity at both public and private direct, indirect, and induced impact is across 11 counties based on the Jour- terminals along the river and reflects the total economic impact. ney to Work commuting flows for the region from the 2000 Census of the availability of the terminal-related The success in using this tool for Population. data needed to build this analysis – impact estimation depends on: (a) namely the employment on-site to data quality; (b) knowing how to de- The commuting flow data show, conduct port activity. This analysis scribe the workings of the policy/ for a single county, all the counties shows the resulting annual economic facility under study to the IMPLAN where its employed residents worked impact for the group of Delaware model; and (c) ensuring that sectors in 2000 and also the county of resi- River ports together and for the selected in the IMPLAN model to dence for all the persons who Philadelphia port complex alone. represent the profile of direct activity worked there in 2000. For example, Impacts and activity of only non-oil do a good job of representing the in 2000 Philadelphia’s place-of-work facilities are also presented. other direct aspects (wages, sales or employment was 660,050 persons, The economic multiplier model jobs) of each sector in use and a comprised of 429,667 residents who from IMPLAN46 was used to esti- plausible set of indirect responses. also worked in the city and 230,383 residents from other counties who mate the impact of on-site port and Tax Revenue Impact terminal employment. Two versions commuted into Philadelphia to work. IMPLAN was further employed of the model were assembled by Se- Gross output, valued added, and to determine the tax revenue impact lect Greater Philadelphia using the earnings were distributed across the associated with port activity in the latest IMPLAN model (2006): an 11- 11 counties based on 2005 personal city and region. The level of tax reve- county47 Greater Philadelphia Metro income data published by the Bureau nues produced by an individual sce- area model for analysis of the Dela- of Economic Analysis (BEA), which nario is a function of its total eco- ware River port complex and a single is available at http://www.bea.gov/ nomic impact, specifically the in- -county model of Philadelphia to regional/reis/. address the stand alone evaluation of creases in employment, output, value Philadelphia ports (public and private added, and labor income produced Since the amount of individual facilities). by that scenario’s direct increase in income taxes paid is determined by employment. where a worker lives as opposed to Economic Impact where he or she is employed, it was The tax analysis estimated necessary to convert the county-level The IMPLAN analysis system is changes in the following types of employment and earnings data from an input-output model that calculates state taxes: individual income tax, a place-of-work to a place-of- multipliers. Once IMPLAN has pro- corporate income tax, general sales residence basis. The Journey to Work vided a description of the direct ef- and use tax, selective sales taxes (e.g., flows were used to convert the em- fects (whether as jobs or dollars of cigarettes, alcohol), and other state ployment estimates, while 2005 per- sales), it measures the added eco- taxes and fees. Increases in the City sonal income data was also used to nomic activity that is subsequently of Philadelphia’s wage and sales taxes convert the wage and proprietor’s triggered. This additional effect is were also determined. Business Privi- earnings estimates. Supplemental made up of indirect and induced im- lege Tax and other taxes unique to income (i.e., employer-paid fringe pact. Indirect impact reflects the sub- Philadelphia were not included. Fur- benefits and contributions to retire- sequent rounds of purchase interac- ther analysis may be done to deter- ment) was subtracted from IM- tions among businesses across differ- mine if these taxes are significant PLAN’s labor income results to ob- ent industries (some are local) to buy enough to include in further models. inputs in the form of goods and ser- tain wage and proprietor earnings vices for their respective production Determining regional tax reve- that are subject to income and wage processes. Households are also paid nues. Because this study covered taxes.

46 APPENDIX C: METHODOLOGY FOR ECONOMIC IMPACT ANALYSIS

In order to use the results of the multiplied by the appropriate meas- from 6 percent to 7 percent on July IMPLAN model, it was necessary to ures of economic activity to estimate 1, 2006. derive effective tax rates for each of the increases in tax revenues.

the taxes being considered. An effec- Determining Philadelphia tax tive tax rate is expressed in percent Calculating “Direct” Employ- revenues. The first step in estimat- terms; it is obtained by dividing the ment ing the increases in Philadelphia’s annual revenues collected for a spe- wage tax revenues was to estimate When reviewing the best estimate cific tax (e.g., individual income, cor- place of residence employment for of port facilities and private terminal porate income, sales, etc.) by the pri- each scenario since City residents jobs (termed the direct effect or di- mary economic activity that the tax is paid a higher wage tax of 4.301 per- rect jobs) to base the economic im- generated by. For example, if total cent in 2006 regardless of where they pact measurement on, it is important individual income taxes paid in a year worked. It was also estimated that to understand what is being de- are $2 million from a total earnings the number of employed residents of scribed. The estimate describes on- base of $100 million, then the effec- the other 10 counties that worked in site employment functions. Other tive tax rate is 2 percent. Philadelphia paid a lower wage tax of support activities involved in running The first step in deriving the ef- 3.7716 percent in 2006. The two em- a specific facility at a port and termi- fective tax rates was to obtain actual ployment estimates were multiplied nal represent indirect effects occur- 2006 values for the amount collected by county-specific figures for wage ring with suppliers or vendors that in each of the three states for the and proprietor earnings per job to contribute to water cargo transaction taxes listed above. This data was ob- obtain the total amounts subject to (e.g., off-site warehousing, trucking, tained from the U.S. Census Bureau’s the wage tax, and these two figures export packing, etc.) 2006 State Government Tax collec- were multiplied by the appropriate Some researchers and consultants tions data, available at: http:// wage tax rate from 2006. augment the concept of what the www.census.gov/govs/www/ The resulting shares of wage tax direct effect includes typically when statetax06.html. This source showed payments by residents and non- evaluating transportation facilities that total individual income tax col- residents were compared against ac- such as water ports and airports. lections during 2006 were $1,018.6 tual data to check the accuracy of our They add many of the indirect (off- million in Delaware, $9,091.7 million methodology. The City of Philadel- site) functions into the direct cate- in New Jersey, and $9,021.9 million phia’s Department of Revenue indi- gory and the consequence is their in Pennsylvania. cated that 61 percent of total wage analysis presents a larger number of The next step was to obtain state- taxes in 2006 were paid by residents direct jobs and a disproportionately level totals in 2006 for the same vari- of Philadelphia versus 39 percent smaller number of indirect jobs. In ables provided by the IMPLAN paid by non-residents. By compari- the process of assembling the 2005 model. Estimates for gross output, son, this study estimates that just employment data for this exercise, it value added (i.e., Gross Domestic over 64 percent of the wage tax pay- became clear that two of the three Product by State), employment, and ments were made by residents; the public port facilities in the Delaware labor income in each of the three higher share is likely due to the fact River port system are associated with states were obtained. the difference between the average direct effects congruous with on-site salaries of residents and non- jobs. We have attempted to place all Effective tax rates were then cal- residents is less in the port sector facilities’ employment on an equal culated for each of the taxes by di- than in other sectors such as Fi- footing. Direct jobs are on-site and viding revenues collected by the ap- nances, and Professional and Busi- include union and non-union posi- propriate variable. For example, col- ness Services. tions. Off-site port-related activity is lections of individual income taxes in handled as an indirect effect of the New Jersey during 2006 were divided The City of Philadelphia levies an port. by total labor income in the state for additional 1 percent sales tax on top the same year to obtain the effective of the 6 percent Pennsylvania sales tax rate for individual income taxes, and use tax, so the state sales tax while corporate income tax receipts revenue estimate was divided by 6 to in Pennsylvania for 2006 were di- obtain additional revenues received vided by the state’s output in 2006 to by the City. Finally, the effective obtain the effective tax rate for cor- sales tax rate for New Jersey was ad- porate income taxes. Once the effec- justed upward to account for the fact tive tax rates were derived, they were that the sales tax rate was increased

47 APPENDIX D: PORT-RELATED EMPLOYMENT Appendix D: Port-Related Employment

Delaware River ports also have an economic impact re- context only and should not be added to direct, indirect, and lated to their customer base, which is comprised of firms induced employment estimates. across different industries that rely on water transportation to ship or receive products. Based upon information from Employment of Port-Reliant Business the Port Import Export Reporting Service (PIERS) 2006 in Greater Philadelphia, Importers 2006 NAICS database of importers and exporters provided by the Phila- Description Jobs delphia Regional Port Authority and employment for port Code customers in the 11-county area derived from Dun and 111 Crop Production 550 Bradstreet data, it is estimated that “port-reliant” firms em- 212 Mining 108 ploy 72,825 people across Greater Philadelphia.4 Of this to- 221 Utilities 110 tal, 58,705 positions are related to imports and 14,120 to 236 Construction 50 exports, a disparity that reflects the region’s import-export 237 Heavy and Civil Engineering Construction 40 trade imbalance. 238 Specialty Trade Contractors 26 Much of this activity arises from firms involved in the 311 Food Manufacturing 1,719 manufacturing of chemicals, computer and electronic prod- 312 Beverage & Tobacco Product Manufacturing 140 ucts, and petroleum and coals products. With the region’s 313 Textile Mills 293 expertise in perishable items and steel, it is unsurprising that 314 Textile Product Mills 50 firms in the region are creating finished products from those 315 Apparel Manufacturing 20 materials and exporting them through ports in Philadelphia 316 Leather and Allied Product Manufacturing 20 and South Jersey. While it is not possible to assess the value 321 Wood Product Manufacturing 6 of Delaware River ports to day-to-day operations, it can be 322 Paper Manufacturing 1,118 surmised that for a great many port-reliant firms, a disrup- 323 Printing and Related Support Activities 475 tion in port services would have a some impact on business 324 Petrol and Coal Product Manufacturing 2,583 activity. However, port-reliant employment estimates are for 325 Chemical Manufacturing 19,309 326 Plastics and Rubber Product Manufacturing 677 327 Nonmetallic Mineral Product Manufacturing 362 Employment of Port-Reliant Business 331 Primary Metal Manufacturing 528 in Greater Philadelphia, Exporters 2006 332 Fabricated Metal Manufacturing 98 333 Machinery Manufacturing 384 NAICS Description Jobs 334 Computer & Electrical Product Manufacturing 16,989 Code 335 Electric Equipment Manufacturing 1,297 221 Utilities 21 336 Tran. Equipment Manufacturing 701 236 Construction 3 337 Furniture Manufacturing 242 238 Specialty Trade Contractors 1 339 Miscellaneous Manufacturing 162 311 Food Manufacturing 1,993 423 Wholesale – Durable Goods 1,956 315 Apparel Manufacturing 60 424 Wholesale – Non-Durable Goods 2,624 322 Paper Manufacturing 64 444 Retail – Blding Material and Garden Supplies 85 324 Petrol and Coal Product Manufacturing 40 445 Retail – Food and Beverage 1,315 325 Chemical Manufacturing 5,335 447 Gasoline Stations 746 326 Plastics and Rubber Product Manufacturing 811 448 Retail – Clothing 487 331 Primary Metal Manufacturing 2,625 452 Retail – General Merchandise 204 332 Fabricated Metal Manufacturing 62 453 Retail – Miscellaneous 4 333 Machinery Manufacturing 84 454 Non-store Retailers 98 336 Tran. Equipment Manufacturing 700 484 Truck Transportation 42 423 Wholesale – Durable Goods 1,222 488 Support Activities for Transportation 901 424 Wholesale – Non-Durable Goods 436 493 Warehousing and Storage 161 441 Motor Vehicle and Parts Dealers 26 511 Publishing 1,330 444 Retail – Bldg Material & Garden Supplies 200 541 Prof. Scientific, Tech., Services 124 445 Retail – Food and Beverage 2 561 Administrative and Support Services 266 541 Prof. Scientific, Tech, Services 400 611 Educational Services 120 561 Administrative and Support Services 3 624 Social Assistance 185 562 Waste Management and Remediation Services 32 Total Jobs With Port-Reliant Importing Firms 58,705 Total Jobs With Port-Reliant Exporting Firms 14,120 Source: PIERS 2006 for Port of Philadelphia (excludes Port of Wilmington).

48 APPENDIX E: EXCERPTS FROM EXPERT PANEL DISCUSSIONS Appendix E: Excerpts from Expert Panel Discussions Conference Call velopments related to a port inland parcels of property in the vicinity of July 26, 2007 distribution network (PIDN), the Port the NY/NJ ports are scarce. This Topic: Global Issues & Implications of Philadelphia may carve out a niche could mean an opportunity for Phila- for Delaware River Ports and the related to reaching secondary mar- delphia’s port, if ocean lines currently Port of Philadelphia kets in central and western Pennsyl- calling NY/NJ shift southward to be vania as well as Ohio and other mid- closer to the large distribution cen- Panelists western market areas. Port of Phila- ters in Pennsylvania. Today the Port Steve Fitzroy, Fitzroy Associates; delphia might consider looking to of Philadelphia does not have an Shashi Kumar, Dean, U.S. Merchant establishing new markets via the Asian service. If the Port could es- Marine Academy; Elizabeth Ogard, North Sea to reach Baltic and eastern tablish an Asian service, this might Prime Focus Consulting; John European markets. be an opportunity for Philadelphia. (Kumar agrees.) Rounesville, Horizon Lines. Ogard: The Port of Philadelphia is a second tier, niche port in compari- Rounesville: Philadelphia has good Moderator son to the deep water East Coast niche for refrigerated (reefer) cargo Lisa Petraglia, EDR Group container ports. According to Sean which is a very attractive feature for Excerpts Mahoney, Director of Marketing for shippers. Reefer containers exhibit the Philadelphia Regional Port Au- the highest revenue – per unit – for Hierarchy of U.S. Ports thority, Philadelphia is perceived to most shipping lines. Pharmaceutical Kumar: The Port of Philadelphia is have a poor reputation with labor companies depend on refrigerated not and will not become be a top tier which is undeserved. The Port of containers that once landside move port – even on the East Coast. Its Philadelphia actually offers 19 start predominantly by truck. times daily while Port of NY only niche is primarily viewed as a bulk Global Issues port (i.e., fruit, other agricultural has 5. Many feel that Philadelphia’s commodities, and petroleum). With location, up the Delaware river is a Fitzroy: Shipping lines determine respect to container growth pros- disadvantage for European cargo, where routes will be established (e.g., pects there are two criteria that limit but there is no disadvantage for first ports of call on trans-Atlantic the Port of Philadelphia: (a) centrality South American cargo or carriers routes) and hence where dredging (population density), and (b) interme- using the Panama Canal. There are investment must be made to capture diacy (ability to attract supplemental cargo clearance issues for double-stack rail, that business. Philadelphia is not typically for transshipment). In both and this is a hindrance for shippers likely to be the first port if call for cases the Ports of NY/NJ eclipse the who want to move double stack traf- large container vessels. However, Port of Philadelphia. The 45 foot fic. Rail connections from the port some cargo may be lightered off at draft, while important, is not going are somewhat circuitous, for exam- other ports before going to Phil. In to add a sustained competitive ad- ple, the CSX railroad must go north this case the 45 foot draft may be vantage in terms of attracting bigger or south when leaving the port, to go sufficient for some time. to western markets. While rail invest- containerships. A 2 or 3 fold in- Smaller container vessels are comment is persistently a “big issue” be- crease in global container move- ing on the market (fabricated by cause of the magnitude of the pro- ments will surely exhaust all U.S. Philadelphia-based ship building jects and costs. Finding funding to ports by 2015. company–AKER) for Hawaiian trade clear double stack routes is not easy. as a result of Jones Act. Vessels of Fitzroy: Port of Philadelphia will The Port of Philadelphia has sur- this size can already access Philadel- never be NY/NJ or LA/Long vived with the current rail access be- phia and Delaware ports without Beach. Not realistic to think the cause of its large surrounding market, deepening the current channel. Port of Philadelphia would attain 3-4 accessible by truck and because it is million TEU’s or 50 million short primarily a bulk cargo port. Class 1 Kumar: Panama Canal has growing tons per year. However, the entire railroads prefer long haul railroad delays and likely will be saturated by system of Delaware River ports markets. Highway access issues may 2008. As a result more service will (particularly Wilmington) has huge become a priority to achieve future divert through the Suez Canal from growth potential. Wilmington has growth at the port. Asian and West Asian ports to East already established itself as an impor- Coast ports until Panama expansion There are landside issues at NY/ tant niche for containerized is completed in 2014 or 2015. Mean- NJ. Huge containerships require (refrigerated) fruit, which has grown while, all major East Coast ports are large warehouse facilities and suitable significantly. Separate from any de- expected to be at capacity by 2015.

49 APPENDIX E: EXCERPTS FROM EXPERT PANEL DISCUSSIONS

While every East Coast port should arriving at East Coast U.S. ports. connections would be a mistake. Op- not aim to be a mega-port, that does- Some shippers are looking at a re- portunities may exist around new n’t mean there aren’t opportunities verse Suez Canal operation. Land- services to handle biofuels coming for those ports which megaships do side transportation can add as much from South America and the export not call on. There will be a realloca- as 30 percent to the total inland of US farm products to Europe tion of trade activity by vessel type transportation cost of getting the (building on the reefer capacity in when certain ports take on a growing goods to market. In the ideal world, Wilmington). Also exports of dis- share of megaship carried cargo. a shipping line, would only call a few tiller’s dried grains (DDGs) are exports and would operate full vessels, pected to increase substantially as Ogard: There are serious environ- with quick and efficient terminal corn stocks are converted to domes- mental concerns in Southern Califor- handling operations, and all markets tic ethanol production. There is a nia as these ports seek to expand. would have a back-haul. We aren’t significant export capacity for these Southern California is already dealing there yet. products to Europe.49 with diesel emission issues related to truck drayage and marine emissions. Rounesville: There has been a green Kumar: Philadelphia should focus All port are watching the Port of Los movement across all industries. on CAFTA countries which use Angeles/Long Beach in their effort Dredging and expansion will be hin- smaller vessels. Short-sea shipping to spread peak gate demand to off- dered by environmental rules. There could work and I’m a bit surprised it peak terminal hours. (e.g., PIER has been revenue erosion (for ship- hasn’t taken hold yet. There is room PASS, an incentive program (per pers) due to increasing rail rates; for it, but you must use a Jones’ Act container) to induce shipping and these are hard to pass on to the cus- ship which is a problem since there trucking lines to call on the port dur- tomer. Shipping lines would prefer aren’t enough vessels with these ing off-peak congestion periods). to take on business that requires as American flagships. Security issues have become para- little intermodal movements as possi- Ogard: Short-sea shipping has mount and the introduction of ble for protecting profits on the strong parallel with intermodal rail. If TWIC (transportation worker identi- transaction. the government subsidizes it, then it fication cards for on-port worker may be introduced before the pure clearance) may cause administrative ⇒ Issue 1: Issues that affect a shipping market signals would warrant its in- related delays if everyone waits until line’s profitability other than port troduction. What needs to be worked closer to the deadline to get their depth or vessel operating costs out is the frequency, cost, and profit- credentials. Some are concerned that Ogard: Market density and the ability of a specific short-sea route, there may be a worker shortage if the ability to backhaul cargo helps. and right now, even with truck concurrent workforce does not comply gestion being what it is, a short-sea with the process. Kumar: Competition among other shipping lines to that port, but movement can’t compete with the Efficiency is also an issue. Many equally important is maintaining cus- truck. In a recent study looking at ports in the U.S. have a mission to tomer loyalty and market share, par- water service between Burns Harbor, create jobs. While efficiency is im- ticularly in the container business. Indiana and Milwaukee, Wisconsin, portant to attract customers, funding truck rates are still too low and the for productivity improvements is Rounesville: While market density is transit times are too slow between often slow to materialize.48 U.S. port viewed as crucial, a port like Jackson- the two terminal points. productivity is typically constrained ville (lacking market density) has pro- by worker rules, which is one reason moted several of its locational advan- ⇒ Issue 3: Types of factors that can be productivity is not as high in the U.S. tages such as good roads, excellent attributed to a port’s loss of market as it is in Asian ports. Railroad inter- rail connections, and ample and com- share petitive supply of truckers. modal service particularly on the Rounesville: Philadelphia had a big West Coast is becoming constrained Implications for Philadelphia loss of market share when a Puerto by key choke points, which are cre- Rico shipper folded. Alternate ser- ⇒ ated by sheer train volumes, steep Issue 2: How water shipping services vice was located by the interested mountain grades and restricted tun- might realistically evolve and how it parties; the service now calls the Port nels. As a result of the labor issues in would affect relative position of ports of NY/NJ. 2004, many containerized shippers Fitzroy: New services will evolve if Ogard: Rates on landside transpor- have reevaluated their ports of entry justified – based on efficiency and and are diversifying their ports of tation are key. Port of Tacoma saw profitability of vessels. There has shipping lines migrate down to Port call. Marine shipments which used to been a reaction to increases in rail arrive on the West Coast are now of LA due to a landside transport rates. However, ignoring intermodal cost increase for one line.

50 APPENDIX E: EXCERPTS FROM EXPERT PANEL DISCUSSIONS

Kumar: Union vs. non-union labor helpful to segment the current cus- strengths and weaknesses with com- and other costs associated with using tomer base, strategically target, and petitive ports; look at primary mar- a port’s facilities. Capacity issues sell the port’s high velocity, high security kets and their competitive advantage have somewhat curtailed the ship- traits to new users who would value for users in markets that are in their ping line’s ability to shop for the best these attributes. For example, Phila- niche; and need to make the case port-of-call. delphia might clarify its market niche about why people should come. as a premier refrigerated load center ⇒ Issue 4: What it would take for Phila- on the East Coast, and target users in ⇒ Issue 7: Why global private investment delphia to harness an anticipated over- these markets that they believe they aimed at port infrastructure might flow of growth at NY/NJ provide a competitive advantage. consider Philadelphia Fitzroy: PIDN is a possibility. It is (e.g., refrigerated dairy products or Fitzroy: Equity investors will need in competition with New Jersey fruit). to know their expected return-on- inland warehouses, some (in central investment, the value proposition ⇒ Issue 5: How the additional five feet of New Jersey) effectively closing the and likely risk sharing with the port draft would affect the current standing distance between activity generated authority as well as the State. The of Philadelphia at the Port of NY/NJ and Philadel- Governors and the Secretary’s of phia. Inter-port agreements would Kumar: Every other port is deep- Transportation in both New Jersey pave the way to securing overflow at ening its channels. The effect will be and Pennsylvania have commis- NY/NJ; stimulating investment in short-lived. sioned high-level studies on public- the Philadelphia region for ware- private partnerships in the past year. Fitzroy: It is important to ask for a housing/distribution facilities net- The timing is right to assess private port such as Philadelphia’s (given its work and learning to compete with equity interest in port infrastructure current activity profile) how much is the New Jersey warehousing busi- investments. depth a differentiator among the ness. class of ports for which it is truly in Kumar: People are looking to in- Ogard: Philadelphia needs to first competition with? What kind of vest; there are many examples of pri- improve its poor intermodal connec- business would you lose if you didn’t vatization outside the U.S. tions (as defined by FHWA) around dredge? the port complex. Trains which run ⇒ Issue 8: If the Port of Wilmington along Delaware Avenue can block ⇒ Issue 6: What Philadelphia must do creates a ceiling on growth for Philadel- access to terminals. Access to I-95 to aggressively grow its container busi- phia ness moves along city congested streets. Kumar: Wilmington being closer Trains blocking at-grade rail cross- Kumar: I have never considered to open water does cause a problem ings can create delays for motorists Philadelphia to be a player in the for Philadelphia’s competitiveness and trucks. During peak traffic, if a container market. They would need a since ships run on a tight schedule. train blocks the grade crossings as huge marketing campaign and draw Ogard: PRPA needs to ask: Who is much as a 40-minute delay has been customers by offering a lower price. the Port of Wilmington selling to and reported in getting to the nearest They need to evolve certain services how do you offset their advantage of interstate connection. Some vessels and make additional terminal invest- being closer to open water? Would calling NY/NJ don’t have their own ment. terminals, and currently share facili- the Wilmington users find value in ties at other carrier’s terminal. This Fitzroy: Quickest to get cargo off Philadelphia? the dock and onto its destination will makes for uncertainty/vulnerability Fitzroy: Airports offer an analogy be a key selling point, whether this is regarding future availability of termi- to marine ports. Reliever airports by on-dock rail, double-stack dock to nal resources, especially if the pri- were developed recently when big the mainline. Partnership of port mary tenant grows into the full ter- airports reached maximum capacity. with rail industry participants would minal area. As a result these smaller The lesson is that all ports may gain be a big plus and it should be mar- carriers are quite interested in consid- if they cooperate. ering the Port of Philadelphia, yet keted as such. Conclusions terminal access issues create doubt. Ogard: Show how you stack up Philadelphia must clarify their core against port competitors in terms of Ogard: I’m excited about the Port competence and market their ser- throughput time, cost, and service. of Philadelphia. There is a lot of op- vices to specific users. Philadelphia Sell your niche and make the case for portunity, and the Port is doing a lot has an advantage with access to Le- why customers should come. Phila- of interesting things right now when high Valley, Carlisle and Harrisburg delphia would need to do complete you consider dredging and Port de- Distribution Centers. It would be study on transit time and compare velopment opportunities. PennDOT

51 APPENDIX E: EXCERPTS FROM EXPERT PANEL DISCUSSIONS

is focused on freight transportation percentage point in the U.S. short tons current raises storage concerns. as well as corridor opportunities. The handled (from 5.5% down to 4.5%). Ogard: Expect different trade pat- stars could be lining up properly. The Petroleum trade is unaffected. terns to emerge for the Philadelphia oil Port needs to explore an increase in Excerpts terminals. refrigerated users who need storage near a large customer base. Highway The following perspectives were ⇒ Issue 2: The future for bulk and break- improvements are needed. Look into shared regarding how specific aspects bulk for Delaware River ports securing an Asian container service. of waterborne trade along the Dela- ware River (affecting the Ports of Kumar: The Port of Philadelphia Fitzroy: It could establish relation- Philadelphia, South Jersey, and Wil- will retain its competitive position in ships with up and coming regions – mington) influence the likelihood of this cargo segment. The commodities especially in Latin America, Eastern these three possible future growth sce- include beef from Australia and South Europe/Baltics, and Africa. narios. At the close of the discussion, America, forest-products, wood pulp Rounesville: Refrigerated cargo is the panelists were asked which (if any) and flowers. It will present a stable very important. It is time sensitive scenario seemed most plausible for business segment but not a growth and pays more than other cargo. Delaware River ports and to suggest segment in part since containerization any additional macro (global) influ- is still on-going and some break-bulk ————————— ences that need to be taken into ac- cargo will convert to container ship- Conference Call count when envisioning the growth ments. November 16, 2007 trajectory for these ports. Fitzroy. Regarding break-bulk, steel manufacturing spurred by foreign di- Topic: Future Scenarios for Delaware ⇒ Issue 1: While the above scenarios are to rect investment from Russia and India River Ports motivate a discussion about future levels for integrated and mini mills here in of container and bulk cargo that can be Panelists the U.S. will create increased ship- attracted to Delaware River ports, the ments for the Port of Philadelphia and Elizabeth (Libby) Ogard, Prime Focus; river historically has played and will other East Coast ports which can serve Sashi Kumar, Dean of the US Mer- continue to play a vital role in receiving midwest and southeast U.S. markets. chant Marine Academy; Steve Fitzroy, crude petroleum shipments at private So competition (from Hampton Transport Economics & International terminals. Comment on how this traffic Roads, Savannah, Baltimore) will be Trade, EDR Group may change over the next 15 years. present and Philadelphia should pre- Moderator Kumar: U.S. consumption patterns pare by leveraging its existing steel rela- Lisa Petraglia, EDR Group will change as oil prices remain high. tionships and build capacity. Part of There will be a growth in consumption this potential is driven by steel mills Summary of Scenarios of LNG. The Delaware River ports looking to reduce the rising transport Scenario 1: “Base case.” As should therefore expect to maintain costs over the road (with land bridg- defined by DRI/WEFA forecasts to their share of the petroleum trade but ing) and looking more at unladening at 2020 for the ACE Re-Analysis Re- not grow it. East Coast ports. Steel shipments are a likely factor for scenarios 1 or 2. port on River Dredging, all cargo Fitzroy: The CAGR of the Dela- (tonnage) would grow at a CAGR of ware River ports’ petroleum trade are Possible vulnerability in the break- 0.9% (which is half the projected rate near an all-time high. Would only envi- bulk segment is lumber shipments due for cargo nationwide). The container sion a larger market share if more re- to the housing slump. Once housing segment would grow at a CAGR of fining capacity were added in the re- investment re-starts, the additions will 4.4% (in line with U.S. projected gion, and that seems unlikely. What is likely be for a different housing unit container growth). likely to change, however, is where concept. Sees a shift towards multi-unit Scenario 2: “Increased Market crude petroleum shipments will origi- which uses many non-wood compo- Share.” Between 2005 and 2020 the nate from. Philadelphia will see more nents. liquid tankers arriving from the African Delaware River ports group will cap- Ogard: As ports are forced to focus continent and from South America. ture an additional percentage point of on specific market segment to survive, the non-petroleum trade (from 5.5% Another issue to watch is how suc- the projected growth in international to 6.5% of the U.S. short tons). cessfully ethanol (corn or sugar based) container trade will cause some ports Scenario 3: “Diminished Mar- will be in substituting for petroleum. to shed their bulk and break-bulk busi- ket Share.” Similar definition to sce- If there isn’t ample domestic imports, ness. There is an opportunity for the nario 2 except between 2005 and then conceivably the river could see Delaware River ports to concentrate 2020 this group of ports will forfeit a liquid bulk ethanol shipments. This further on their existing competitive

52 APPENDIX E: EXCERPTS FROM EXPERT PANEL DISCUSSIONS

position in this cargo segment. It is Philadelphia. opportunity here. Ports must re- very difficult to balance growing seg- package themselves to portray they are One other limitation to container ments since they make different port key player in the supply chain for spe- growth for Philadelphia is that gaps utilization demands. cific goods. exist in the inland rail network depend- ⇒ Issue 3: The future for refrigerated con- ing on how far goods need to move Fitzroy: Market efficiency and ca- tainers vs. other containers for Delaware once unladen at Philadelphia. Pilot pacity are the most compelling factors River ports demonstration projects are being for being selected on the carrier’s rota- fielded for container-on-barge but no tion. Carriers want to see a separate Kumar: Beef (Australia) and fruit current proposal includes Philadelphia. treatment for importers and exporters. (South America) shipments will remain Economies of scale are key to the car- strong and underpin scenario 1. ⇒ Issue 4: Markets and products that rier. Baltimore and Savannah have promise growth for Delaware River ports Fitzroy: Wilmington serves as an these, and they have been the winners important niche in reefer cargo in Kumar: Linking the hinterland will with carriers. terms of markets served and custom- be a key driver for the ports. The sus- Ogard: The economics of vessel ers. It will play a moderate positive tained decline of the U.S. dollar is in- strings, markets served (rail bottlenecks role in underpinning scenario 1. Port creasing the demand for U.S. exports. at a port and gateway cities), as well as of Philadelphia is vulnerable with re- Expects less growth from the local the economic outlook of the trading spect to non-reefer containers as many market served. partners are all involved in determining ocean carriers are closely managing Fitzroy: The local market will be whether Delaware River ports would unit costs given vessel size optimiza- demanding building materials. Hinter- be chosen in a port diversification tion and achieving economies of rota- lands have some potential but are con- strategy. Volume and capacity at other tion. The outcome may be that Phila- tested – Wilmington for reefers, land- locations may determine some oppor- delphia is bypassed in container seg- side infrastructure, slated improve- tunity. Pending resolution of labor ments for which Philadelphia doesn’t ments at competitor ports, priorities issues on both West and East Coasts currently exhibit a competitive posi- and privatization all play a role in how may also influence port diversification. tion. Port of NY/NJ sees the most the hinterland business is awarded. calls from the largest vessels on the ⇒ Issue 6: Factors in the relative cost com- Private steel operations are guaranteed East Coast, and those vessels typically petitiveness of Delaware River ports business for Philadelphia but will need serve Baltimore and Hampton Roads to have storage issues addressed (both Kumar: While relative cost of the on the same string of calls. The chan- open & closed warehouses) and some port is important it is not the main nel depth requirements are onerous for rail connections established. influencer in attracting shipments. Reli- Delaware River port facilities if they ability is the driver whereby vessel continue to pursue the lure of larger Ogard: Exchange rates will definitely turnaround time and seamless intermo- vessels. affect trading partners and flows and dal connections are what matter most. so will port improvements that come The plus for Delaware River ports This assumes that the port’s cost struc- online. Expects a resurgence of U.S. is their strength in the local market ture is not grossly out of line. exports to Europe, some of it manu- served. This must be maintained to factured goods that will move in con- Fitzroy: If Delaware River ports serve as a stabilizer for facility per- tainers. Some of these containers ar- build on concentrating their current formance in the future. Reefer cargo rived at West Coast ports and would customer cargo (affording them stabil- will maintain its share, while other con- have traveled back empty across the ity), then based on current cost pa- tainer cargo will be under pressure. Pacific. Instead they move inland, are rameters, there is a favorable trajectory. Ogard: The re-building of reefer filled with manufacturers form the mid Business growth is more complicated capacity in the Gulf post-Katrina has -West and will export to Europe off than just the on-port cost. Gross in- been state-of-the art facilities, and the East Coast. Without an already vestment in freight infrastructure plays these locations have a deep reach into established container position it is hard a big role. the midwest. The Port of Philadelphia to see the windfall for Philadelphia. Ogard: The channel deepening to 45 fortunately has a good catchment area Foreign Trade Zones have had good feet is a plus, but there are corridor in the New England market. Competi- success statewide with pharmaceuticals issues. The future will depend on iden- tion is rising as NYC is underway with and small manufacturing. tifying the corridors that can lead to railroad improvements; Hampton key gateway cities, or link to new ware- Roads is adding new container capac- ⇒ Issue 5: Delaware River ports’ ability to house centers (Lehigh, Chambersburg, ity. As mentioned back in the first play a role in port diversification strate- Harrisburg). Philadelphia is addressing panel discussion (August 2007), lack of gies of shippers/consignees or carriers highway infrastructure improvements a North Asian service is a weakness for Kumar: Hard to say of there is an

53 APPENDIX E: EXCERPTS FROM EXPERT PANEL DISCUSSIONS

and the Liberty Corridor has been advantage Philadelphia. Channel deep- Kumar: Should promote through funded to remove clearance issues. ening is necessary but not sufficient. public-private investments between These challenges could be somewhat Operator-Carriers-Shippers. A supply chain manager examines mitigated with a unified strategy be- the entire ocean-highway and/or rail Fitzroy: Private money is key. Pick tween Philadelphia, South Jersey, and transit. They look for a carrier that can specific commodity carefully to de- Wilmington. offer that seamlessly and consider the velop the capacity around. Locate the cost and time involved. Ogard. First movers on capacity investments appropriately. Large enhancements will have an advantage amounts of public money invested are ⇒ Issue 7: How Delaware River ports over Philadelphia. Possible opportuni- best in large economies of scale con- should position themselves as they look to ties exist through offering support/ text. the future feeder services to large vessels calling Ogard: Focus on a market niche, elsewhere on the East Coast. Kumar: Each port should focus on a secure commitments and work with specialty. Coordination through politi- ⇒ Issue 9: Role for regional intermodal the customer to build the investment. cal collaboration or port unification initiatives should be looked at (again) seriously. ⇒ Issue 11: What else may influence the Fitzroy: These will become relevant future for Delaware River ports Fitzroy: The most successful re- for the long-haul move (1-2 day mar- gional ports have evolved into joint Ogard: Recent AASHTO publica- ket). These are typically arranged be- marketing entities and are realizing tion shows a long-term railroad infra- tween the carrier and the consignee. economies of scale as a result. This structure shortfall despite $8 billion of Baltimore, Hampton Roads and Port mirrors the trend among carriers. planned improvements. The 2008 elec- of New York/New Jersey are also Large carriers want to negotiate with tion may change policy towards trans- competitive depending on the specific large port complexes. Smaller individ- portation and freight but it is an un- commodity. Increasing fuel costs will ual ports can not leverage the same known right now. The role of fuel tend to favor rail move instead of long- bargaining assets. Internal competition surcharges is shifting the truck-rail mix haul truck. along the river can be viewed as non- to move freight to/from the inland. productive. Ogard: Double stack long-haul rail Ocean carrier rationalization will dic- ideally travels 700-1,000 miles before tate where the winner ports are; it will Ogard: When viewed as a multi- the first stop. Philadelphia (CSX) has be those that can assemble point-to- jurisdiction planning issue, three states some rail issues to remedy in terms of point business for the railroad. Hard present a challenge for coordination, ease of moving westward from port. to see a strong advantage for Philadel- but it is not impossible. Freight will The port currently does not have the phia with the inland double-stack ser- flow to the path with least resistance volume to justify investment in high vice. Lastly, the TWIC daily imple- (cost effective and smooth reliable cube stack services in the near future mentation official as of January 2008 intermodal movements). All this pre- but other competitor ports are already may likely pose a process bottleneck. sents challenges for a small facility. underway. ⇒ Issue 12: Most probable outlook for the ⇒ Issue 8: The role of carrier commitments Intermodal connections – getting Delaware River ports Kumar. The Panama Canal widen- from port to highway – issues of spot Kumar: Would caution that the base ing completion in 2014 and the South congestion and grade separations – case is overly ambitious when viewed Asian stimulus will contribute to more fixable. Philadelphia has a highway on current market conditions. Port traffic to the East Coast. This traffic network with good connections to operators are reexamining their recent will typically involve vessels of 12,000 warehousing districts (Lehigh Valley, forecasts again. TEUs as the worldwide fleet is shifting Chambersburg, Harrisburg) and a into larger vessels. Despite the 45-foot straight path (one-day drive) to Colum- Fitzroy. Believes it is unlikely that channel deepening, there will remain bus, Ohio. Also has possibly the fastest the Delaware River ports will be able depth limitations and the geographic and most cost effective move for high to keep pace with the assumed growth limitation of position up river. value cargo to the midwest. But not for U.S. ports. The base case is too being a first port-of-call will limit up- optimistic for containers and so is sce- Fitzroy: Continued consolidation side. Best market opportunity reached nario 2. Forecasts from 1 year ago are among carriers will make container through intermodal is likely the North being reworked. Bulk will likely re- growth for Philadelphia difficult to East corridor. Limited market oppor- main the opportunity for these ports. achieve. The Suez route of Hong tunity in the midwest. Scenario likelihood: #1 – 45%, #2 – Kong to Philadelphia could begin to 15%, and #3 – 30% (including liquid look more attractive, but vessel size ⇒ Issue 10: Implications for port capacity bulk component). and the order of ports of call will dis- additions

54 APPENDIX F: PORT PROFILES

Appendix F: Port Profiles

Philadelphia Regional Port Authority

2006 Specialized Terminal Landside Facility Operator Vessel Berths Warehouse & Storage Cargoes Area Connection Calls Packer Avenue Containers, steel 6 berths - 1 dry/heated - 100,000 sq. ft. Highway: I-95 Greenwich 112 acres Marine Terminal products, frozen 3,800 lin- 1 dry - 90,000 sq. ft & I-76 within Terminals, 363 45 sq. hec- (Columbus Blvd. at meat, fruit, heavy lift, ear ft.; 1 1 dry - 100,000 sq. ft 0.5 mi.; Rail: LLC tares (ha.) Packer Ave.) project, paper Ro/Ro 1 reefer - 2,200,000 cu. ft. CP, CSX, NS 1 compartment. refeer/heated - Containers, fresh Tioga Marine 6 berths - 300,000 sq. ft. Highway: Delaware fruit, paper, plywood, Terminal 116 acres 3,822 lin- 1 cold storage - 90,000 sq. ft. Close to I-95; River Steve- 95 cocoa beans, autos, (Delaware Ave. at 47 sq. ha. ear ft.; 1 1 heated storage - 97,500 sq. ft. Rail: CP, dores, Inc. palletized, project, Tioga St.) Ro/Ro 1 dry - 40,000 sq. ft. CSX, NS breakbulk, & steel 1 dry - 107,000 sq. ft. Pier 74 Annex: 115,000 sq. ft. 4 berths - Highway: Piers 78/80 Penn Ware- Newsprint, coated Pier 78: 1 dry - 364,000 sq. ft. 44.4 acres 3,892 lin- Close to I-95 (Columbus Blvd. at housing 60 paper, wood pulp, 78 Annex: 1 dry - 208,000 sq. ft. 18 sq. ha. ear ft.; 2 & I-76; Rail: Snyder St.) Distribution other forest products Pier 80: 1 dry - 456,000 sq. ft.; Ro/Ro CP, CSX, NS 80 Annex: 1 dry - 125,000 sq. ft. Pier 82 Highway: Fruits & vegetables, 2 berths - 1 heated chilled - 130,000 (Columbus Blvd. at Horizon 13.3 acres Close to I-95 39 break bulk, project, 1,994 lin- chilled sq. ft. (with humidification Oregon Ave. & Stevedoring 5.4 sq. ha. & I-76; Rail: paper ear ft. system) Jackson St.) CP, CSX, NS Highway: Piers 38/40 Penn Ware- Newsprint, coated 3 berths - 2 dry - each 180,000 sq. ft. 12 acres Close to I-95 (Columbus Blvd. at housing & 23 paper, wood pulp, 1,721 lin- Pier 40 - 1st floor heated and 4.9 sq. ha. & I-76; Rail: Christian St.) Distribution other forest products ear ft. humidification system CP, CSX, NS Highway: Pier 84 Dependable Cocoa beans & 1 berth - 13.9 acres 1 dry - 500,000 sq. ft. Close to I-95 (Columbus Blvd. at Distribution 22 other cocoa prod- 855 linear 5.6 sq. ha. 1 dry - 40,000 sq. ft. & I-76; Rail: Jackson St.) Services ucts ft. CP, CSX, NS Pier 96: Highway: 9.7 acres Pier 96 & 98 Annex Pasha Auto Automobiles, pro- 2 berths - Auto-washing system - 15,000 Immediate 3.9 sq. ha. (Columbus Blvd. at Warehous- n/a ject, heavy equip- 2,640 lin- sq. ft. access to I-95 98 Annex: Oregon Ave.) ing, Inc. ment ear ft. Service building - 80,000 sq. ft. & I-76; Rail: 45.2 acres CP, CSX, NS 18.3 sq. ha.

South Jersey Port Corporation

2006 Specialized Terminal Landside Facility Operator Vessel Berths Warehouse & Storage Cargoes Area Connection Calls Highway: Beckett Street Cocoa beans, wood, Access to I- South Jersey 4 berths - Terminal scrap metal, steel, 125 acres 676, I-76, US Port Corpo- 154 2,655 lin- 19 dry - 1,110,000 sq. ft. total (Beckett St. at Sec- wood products, iron 50.9 sq. ha. 130, & I-295; ration ear ft. ond St., Camden) ore, pyrite, & salt Rail: CP, CSX, NS Highway: Broadway Del Monte Access to I- Bananas, pineap- 1 berth - 3 temperature-controlled - Produce Terminal Fresh Pro- 28 acres 676, I-76, US 65 ples, & other perish- 1,135 lin- Total 210,600 sq. ft. (2500 Broadway, duce N.A., 11.3 sq. ha. 130, & I-295; ables ear ft. 1 dry - 25,000 sq. ft. Camden) Inc. Rail: CP, CSX, NS Highway: Furnace slag, ce- Broadway Access to I- South Jersey ment, steel, wood 2 berths - Terminal 180 acres 676, I-76, US Port Corpo- 34 products, dolomite, 2,000 lin- 29 dry - 1,100,000 sq. ft. total (Broadway at Mor- 72.8 sq. ha. 130, & I-295; ration salt, cocoa beans, & ear ft. gan Blvd., Camden) Rail: CP, CSX, other perishables NS Highway: Direct access Wearing apparel, Port of Salem South Jersey 1 berth - to US 45 and finishing apparel, 22 acres Shed & warehouse space - (Exit 1, NJ Turn- Port Corpo- n/a 350 linear US 49, with autos, food products, 8.9 sq. ha. 80,000 sq. ft. pike, Salem) ration ft. access to US sand, & gravel 130, I-295, & NJ Turnpike 55 APPENDIX F: PORT PROFILES

Diamond State Port Corporation

2006 Specialized Terminal Landside Facility Operator Vessel Berths Warehouse & Storage Cargoes Area Connection Calls 7 berths - general 6 warehouses - chilled & freezer Highway: Port of Wilmington Diamond Containers, autos, 308 acres cargo; 1 storage - 800,000 sq. ft. total Access to I- (Hausel Rd., Wil- State Port 399 fruit, juice, meat, 124 sq. ha. tanker; 1 Controlled atmosphere capabil- 95; mington) Corporation paper, salt, & steel floating; 1 ity - 16,000 sq. ft. total Rail: CSX, NS Ro/Ro

Major Privately Owned Facilities 2006 Specialized Terminal Landside Facility Operator Vessel Berths Warehouse & Storage Cargoes Area Connection Calls Highway: Penn Terminal Containers, fruit, 1 berth - Penn Termi- 71.4 acres Warehousing capacity - 300,000 Access to I- (Saville Rd., Ed- 253 autos, clothes, & 1,150 lin- nals 28.9 sq. ha. sq. ft. 95, I-476, & dystone, PA) project ear ft. NJ Turnpike Highway: Gloucester Marine Greenwich Containers, steel, 5 berths - 11 dry/heated - 1,200,000 sq. ft. Access to I- Terminal 150 acres Terminals, 187 frozen meat, fruit, 2,600 lin- 11 reefer/frozen - 5,090,000 cu. 676, I-76, I- (King St., Glouces- 60.8 sq. ha. LLC heavy lift, & project ear ft. ft. 295, & NJ ter, NJ) Turnpike Highway: Access to I- Fairless Hills 3 berths - 95, PA Turn- Kinder 100 acres Warehousing capacity - 208,000 (Sinter Rd., Fairless 94 Steel 2,200 lin- pike, & NJ Morgan 40.5 sq. ha. sq. ft. Hills, PA) ear ft. Turnpike Rail: CSX & NS Other Privately Owned Facilities

2006 Specialized Facility Owner/Operator Vessel Cargoes Calls Kinder Morgan Liquid Terminal (Delaware Ave. at Allegheny Ave., Phila.) Kinder Morgan 58 Chemical Bermuda International (Tilbury Rd., Salem, NJ) Bermuda International Mid-Atlantic 49 Containers Grows Terminal (New Ford Mill Rd., Fairless Hills, PA) Grows Waste Management 30 Salt & Gravel Oceanport (Claymont, DE) Oceanport Industries, Inc. 15 Salt National Gypsum (River Rd., Burlington, NJ) National Gypsum Company 14 Gypsum Riverside (Newbold Rd., Fairless Hills, PA) Riverside Construction Materials, Inc. 13 Cement Georgia Pacific (South Front St., Camden, NJ) Georgia Pacific Gypsum 9 Gypsum

Oil Refineries

2006 Facility Owner/Operator Vessel Calls Delaware City (Wrangle Hill Rd., Delaware City, DE) Valero, Inc. 231 Eagle Point (US 130 & I-295, Westville, NJ) Sunoco, Inc. 189 Fort Mifflin (Fort Mifflin, Phila.) Sunoco, Inc. 180 Marcus Hook (Delaware Ave. at Green St., Marcus Hook, PA) Sunoco, Inc. 166 Paulsboro (Billingsport Rd., Paulsboro, NJ) Valero Refining Co. of New Jersey 151 Trainers (Post Rd., Trainer, PA) ConocoPhillips, Inc. 85 Citgo Paulsboro (Paradise Rd., Paulsboro, NJ) Citgo Asphalt Refining 68 Hess Delair (Derousse Ave., Pennsauken, NJ) Amerada Hess Corporation 58 Pacific Atlantic Terminal (3rd St. at Billingsport Rd., Paulsboro, NJ) ST Services 56 H. Port Richmond (E. Allegheny Ave., Phila.) Westway Terminals, Inc. 42 Girard Point (Girard Point, Phila.) Sunoco, Inc. 40 Hog Island (Hog Island, Phila.) Sunoco, Inc. 16 Wilmington Oil Pier (Christiana Ave., Wilmington, DE) Magellan Midstream Partners 10 PECO Coal Terminal (Essington, PA) PECO 7 Koch Fuels (Gloucester City, NJ) Koch Fuels 4

56 APPENDIX G: ADDITIONAL DATA Appendix G: Additional Data

Rankings of U.S. Ports by Tonnage, 2005 Imports Exports Rank Port Short Tons Rank Port Short Tons 1 Houston, TX 103,189,879 1 South Louisiana, LA 51,083,963 2 New York/New Jersey 76,566,928 2 Houston, TX 41,860,694 3 Beaumont, TX 55,505,173 3 Virginia Ports/Hampton Roads, VA 24,417,636 4 Corpus Christi, TX 45,418,170 4 Long Beach, CA 18,808,002 5 Long Beach, CA 44,492,991 5 Duluth-Superior, MN and WI 13,951,792 6 South Louisiana, LA 43,489,700 6 Tacoma, WA 13,014,877 7 Texas City, TX 38,005,188 7 Los Angeles, CA 12,932,048 8 Los Angeles, CA 33,994,001 8 Portland, OR 11,945,116 9 Portland, ME 28,038,852 9 New Orleans, LA 11,826,683 10 Lake Charles, LA 27,083,364 10 New York/New Jersey 11,231,712 11 Philadelphia, PA 25,914,744 11 Seattle, WA 10,507,096 12 Freeport, TX 25,415,676 12 Mobile, AL 10,151,874 13 Baltimore, MD 21,507,392 13 Savannah, GA 10,084,137 14 New Orleans, LA 21,251,947 14 Kalama, WA 8,809,228 15 Mobile, AL 21,224,217 15 Corpus Christi, TX 8,390,095 16 Savannah, GA 18,216,211 16 Tampa, FL 8,270,965 17 Paulsboro, NJ 18,133,852 17 Plaquemines, LA 7,914,170 18 Baton Rouge, LA 17,585,231 18 Oakland, CA 7,113,612 19 Pascagoula, MS 16,542,106 19 Baltimore, MD 6,727,261 20 Charleston, SC 15,560,101 20 Charleston, SC 6,314,453 21 Boston, MA 14,090,568 21 Texas City, TX 5,462,230 22 Port Arthur, TX 12,992,497 22 Port Arthur, TX 5,060,308 23 Tampa, FL 11,838,306 23 Lake Charles, LA 5,022,731 24 Port Everglades, FL 11,566,543 24 Baton Rouge, LA 4,819,554 25 Jacksonville, FL 10,962,641 25 Beaumont, TX 4,597,105 26 Seattle, WA 10,476,388 26 Ashtabula, OH 4,319,057 27 Richmond, CA 9,991,591 27 Presque Isle, MI 3,373,239 28 Virginia Ports, VA 9,862,698 28 Pascagoula, MS 3,352,099 29 Marcus Hook, PA 9,570,380 29 Vancouver, WA 3,227,795 30 Plaquemines, LA 8,039,242 30 Longview, WA 3,204,802 31 Tacoma, WA 7,658,776 31 Conneaut, OH 3,165,069 32 Port Lavaca/Point Comfort, TX 7,358,387 32 Freeport, TX 3,029,744 33 Wilmington, DE 6,896,449 33 Miami, FL 2,834,117 34 Oakland, CA 6,357,517 34 Toledo, OH 2,752,376 35 Honolulu, HI 6,220,219 35 Nikishka, AK 2,703,823 36 Providence, RI 5,795,456 36 Galveston, TX 2,654,586 37 San Juan, PR 5,791,386 37 Port Everglades, FL 2,654,147 38 Miami, FL 5,000,574 38 Port Lavaca/Point Comfort, TX 1,872,184 39 Toledo, OH 4,847,786 39 Richmond, CA 1,744,862 40 Camden-Gloucester, NJ 4,742,854 40 Sandusky, OH 1,714,235 41 Portland, OR 4,410,840 41 Jacksonville, FL 1,546,678 42 Portsmouth, NH 4,285,676 42 Chicago, IL 1,500,501 43 Detroit, MI 4,120,212 43 Coos Bay, OR 1,440,917 44 Wilmington, NC 3,989,349 44 Kivilina, AK 1,381,126 45 Port Canaveral, FL 3,604,931 45 Palm Beach, FL 1,144,665 46 Cleveland, OH 3,137,262 46 Boston, MA 1,068,296 47 New Castle, DE 3,056,252 47 Morehead City, NC 1,021,929 48 Brownsville, FL 2,935,438 48 Anacortes, WA 995,410 49 Port Manatee, FL 2,931,318 49 Port Manatee, FL 930,651 50 New Haven, CT 2,783,030 50 Wilmington, NC 912,924 (Continued on next page)

57 APPENDIX G: ADDITIONAL DATA

(Continued from previous page)

Rankings of U.S. Ports by Tonnage, 2005 Imports Exports Rank Port Short Tons Rank Port Short Tons 51 San Diego, CA 2,552,817 51 Calcite, MI 899,856 52 Ponce, PR 2,280,006 52 Grays Harbor, WA 839,018 53 Barbers Point, Oahu, HI 2,192,235 53 Port Dolomite, MI 734,139 54 Penn Manor, PA 2,175,149 54 Gulfport, MS 687,240 55 Anacortes, WA 2,174,164 55 Brunswick, GA 672,140 56 Stockton, CA 1,904,034 56 Stockton, CA 667,849 57 Fall River, MA 1,889,507 57 Port Inland, MI 611,367 58 Bridgeport, CT 1,854,093 58 Burns Waterway Harbor, IN 591,894 59 Searsport, ME 1,705,823 59 Marblehead, OH 568,744 60 San Francisco, CA 1,667,908 60 Camden-Gloucester, NJ 545,293 61 Burns Waterway Harbor, IN 1,597,349 61 San Juan, PR 520,706 62 Brunswick, GA 1,563,859 62 Everett, WA 495,718 63 Port Hueneme, CA 1,375,792 63 Anchorage, AK 467,520 64 Morehead City, NC 1,282,428 64 Honolulu, HI 460,701 65 Chicago, IL 1,245,876 65 Brownsville, TX 420,287 66 Chester, PA 1,243,599 66 Chester, PA 400,092 67 Palm Beach, FL 1,193,852 67 Wilmington, DE 381,567 68 Milwaukee, WI 1,099,300 68 Fairport Harbor, OH 359,250 69 Vancouver, WA 1,064,786 69 Panama City, FL 346,551 70 Salem, MA 1,044,597 70 Philadelphia, PA 322,702 Source: American Association of Port Authorities. Notes: Tonnage is for foreign trade only.

58 APPENDIX G: ADDITIONAL DATA

Rankings of U.S. Ports by Value of Goods, 2005 Imports Exports Rank Port Dollars Rank Port Dollars 1 Los Angeles, CA 199,642,517,489 1 Houston, TX 41,934,379,555 2 Newark, NJ 100,835,454,909 2 Los Angeles, CA 26,264,621,637 3 Houston, TX 61,027,767,704 3 New York, NY 26,218,253,329 4 Long Beach, CA 57,661,560,859 4 Long Beach, CA 21,615,283,322 5 Charleston, SC 39,097,702,980 5 Norfolk, VA 16,595,053,349 6 Philadelphia, PA 29,462,379,151 6 Charleston, SC 16,101,460,266 7 Seattle, WA 27,906,668,169 7 New Orleans, LA 15,232,446,605 8 Norfolk, VA 27,226,542,494 8 Savannah, GA 13,703,056,423 9 Baltimore, MD 27,105,718,036 9 Oakland, CA 9,785,999,732 10 Tacoma, WA 26,911,757,293 10 Baltimore, MD 9,599,931,056 11 Savannah, GA 25,967,964,985 11 Miami, FL 9,413,624,905 12 Morgan City, LA 25,399,358,026 12 Seattle, WA 8,610,941,883 13 Oakland, CA 24,607,011,089 13 Jacksonville, FL 8,151,596,185 14 New Orleans, LA 18,467,400,418 14 Pt. Everglades, FL 7,570,159,382 15 Port Arthur, TX 15,713,257,491 15 Newark, NJ 6,945,122,058 16 Corpus Christi, TX 15,490,616,223 16 Tacoma, WA 4,973,481,293 17 Jacksonville, FL 12,471,747,504 17 Gramercy, LA 3,607,888,988 18 New York, NY 11,521,083,027 18 Corpus Christi, TX 3,282,648,360 19 Portland, OR 11,486,029,187 19 Detroit, MI 3,259,974,703 20 Miami, FL 11,469,886,241 20 Anchorage, AK 2,816,065,593 21 Pt. Everglades, FL 10,410,717,153 21 Portland, OR 2,555,628,178 22 Texas City, TX 10,129,026,843 22 Philadelphia, PA 2,430,517,679 23 Christiansted, Virgin Islands 10,100,103,974 23 Texas City, TX 2,297,503,047 24 Lake Charles, LA 9,374,219,400 24 Wilmington, DE 2,175,543,116 25 Beaumont, TX 9,013,516,806 25 Norfolk/Mobile/Charleston 1,988,681,398 26 Freeport, TX 8,742,964,843 26 Tampa, FL 1,954,990,969 27 Boston, MA 7,921,249,597 27 Baton Rouge, LA 1,894,212,777 28 Port Hueneme, CA 7,273,092,554 28 Beaumont, TX 1,841,535,908 29 Gramercy, LA 7,146,872,453 29 Mobile, AL 1,720,115,827 30 San Diego, CA 6,964,608,381 30 Pascagoula, MS 1,627,875,033 31 Pascagoula, MS 6,949,396,144 31 San Juan, PR 1,614,841,751 32 Baton Rouge, LA 6,870,916,666 32 Chester, PA 1,594,532,247 33 Mobile, AL 6,440,936,114 33 Freeport, TX 1,552,170,482 34 Richmond, CA 5,931,786,701 34 Wilmington, NC 1,357,231,895 35 Chester, PA 5,684,957,894 35 Boston, MA 1,292,834,383 36 Brunswick, GA 5,531,070,484 36 Kalama, WA 1,260,132,956 37 Wilmington, DE 5,499,289,565 37 Port Huron, MI 1,216,838,133 38 Providence, RI 5,269,111,207 38 West Palm Beach, FL 1,176,090,644 39 El Segundo, CA 4,961,753,258 39 Lake Charles, LA 1,144,648,129 40 San Juan, PR 4,837,450,824 40 Port Arthur, TX 1,129,938,104 41 Honolulu, HI 4,292,762,495 41 Galveston, TX 1,096,490,279 42 Panama City, FL 3,962,293,344 42 Vancouver, WA 1,081,813,469 43 Galveston, TX 3,501,867,193 43 Brunswick, GA 1,026,293,932 44 Perth Amboy, NJ 3,441,226,238 44 Gulfport, MS 922,507,705 45 San Francisco, CA 2,935,301,630 45 San Francisco, CA 866,723,964 46 Newport News, VA 2,486,968,631 46 Buffalo-Niagara Falls, NY 833,134,819 47 Wilmington, NC 2,455,994,599 47 Newport News, VA 802,252,054 48 Portland, ME 2,189,686,349 48 Panama City, FL 667,799,946 49 Tampa, FL 2,156,839,891 49 Longview, WA 630,784,599 50 Bellingham, WA 2,070,271,556 50 Richmond-Petersburg, VA 630,100,362 51 New Haven, CT 1,859,660,073 51 Chicago, IL 591,617,977 52 Gulfport, MS 1,518,840,565 52 Toledo-Sandusky, OH 525,819,320

(Continued on next page)

59 APPENDIX G: ADDITIONAL DATA

(Continued from previous page) Rankings of U.S. Ports by Value of Goods, 2005 Imports Exports Rank Port Dollars Rank Port Dollars 53 Humacao, PR 1,501,767,992 53 Champlain-Rouses Pt., NY 525,238,823 54 Guayanilla, PR 1,406,400,483 54 Christiansted, Virgin Islands 443,056,944 55 Chicago, IL 1,316,173,599 55 Everett, WA 404,875,614 56 Vancouver, WA 1,237,656,495 56 Duluth-Superior, MN-WI 368,021,760 57 Martinez, CA 1,046,283,847 57 Mayagues, PR 310,291,993 58 Richmond-Petersburg, VA 1,011,247,855 58 Humacao, PR 304,237,111 59 Detroit, MI 897,985,522 59 Honolulu, HI 292,724,785 60 Everett, WA 851,056,822 60 Brownsville-Cameron, TX 291,104,448 61 Anacortes, WA 834,682,942 61 Anacortes, WA 275,003,255 62 Port Manatee 817,316,420 62 Morehead-Beaufort, NC 256,073,294 63 West Palm Beach, FL 747,176,243 63 Fernandina, FL 246,625,301 64 Portsmouth, NH 693,721,722 64 Perth Amboy, NJ 220,703,434 65 Port Lavaca, TX 648,162,542 65 Eastport, ME 219,744,509 66 Carquinez Strait, CA 641,877,538 66 Port Hueneme, CA 219,619,353 67 Anchorage, AK 628,464,774 67 Port Lavaca, TX 214,629,905 68 Searsport, ME 568,770,515 68 Blaine, WA 208,686,751 69 San Joaquin River, CA 565,937,065 69 Guayanilla, PR 186,171,703 70 Port Canaveral, FL 554,688,410 70 Marquette, MI 170,973,341 71 Toledo-Sandusky, OH 507,168,379 71 Juneau, AK 162,165,865 72 Cleveland, OH 506,408,171 72 Portsmouth, NH 155,509,546 73 Morehead-Beaufort, NC 447,638,757 73 Bellingham, WA 154,378,774 74 Mayagues, PR 408,757,782 74 Camden, NJ 149,968,973 75 Brownsville-Cameron, TX 369,165,533 75 Albany, NY 142,437,075 76 Stockton, CA 347,358,071 76 Morgan City, LA 132,807,662 77 Good Hope, LA 270,017,958 77 Port Townsend, WA 129,516,603 78 Kalama, WA 269,499,677 78 Aberdeen-Hoquiam, WA 115,533,791 79 Paulsboro, NJ 255,203,257 79 Richmond, CA 114,233,947 80 Crockett, CA 248,054,863 80 Port Manatee, FL 110,559,407 81 Albany, NY 245,460,248 81 Port Canaveral, FL 109,175,706 82 Milwaukee, WI 243,292,793 82 Fort Pierce, FL 92,589,652 83 Oswego, NY 230,012,534 83 Providence, RI 92,154,050 84 Ponce, PR 225,120,810 84 Paulsboro, NJ 88,580,455 85 Bridgeport, CT 211,443,577 85 Stockton, CA 85,554,551 86 Longview, WA 202,345,085 86 Sacramento, CA 85,534,998 87 Port Huron, MI 152,273,688 87 Portland, ME 83,504,871 88 Fernandina, FL 151,484,840 88 Ketchikan, AK 82,862,637 89 Selby, CA 138,930,200 89 Coos Bay, OR 77,407,916 90 Fall River, MA 138,819,889 90 Ponce, PR 73,505,901 91 Jobos, PR 128,883,420 91 Milwaukee, WI 72,236,565 92 Duluth-Superior, MN-WI 128,544,575 92 New Haven, CT 70,939,879 93 Georgetown, SC 127,358,342 93 St. Rose, LA 70,747,918 94 New London, CT 125,262,747 94 San Diego, CA 63,126,526 95 Belfast, ME 119,742,120 95 Jobos, PR 52,863,916 96 Olympia, WA 107,009,652 96 Gary, IN 51,225,502 97 Marinette, WI 104,176,480 97 Sault Ste. Marie, MI 47,524,993 98 Newport, RI 89,111,987 98 International Falls-Ranier, MN 41,437,596 99 Memphis, TN 86,092,331 99 San Pablo Bay, CA 41,118,088 100 Sacramento, CA 80,324,139 100 Georgetown, SC 32,563,377 101 Green Bay, WI 78,359,561 101 Alexandria Bay, NY 28,447,201 102 Ashtabula/Conneaut, OH 77,118,161 102 Memphis, TN 27,076,360 103 Camden, NJ 67,409,025 103 Annapolis, MD 25,980,909 Total-All Ports 971,141,080,593 Total-All Ports 307,553,120,715 Source: U.S. Census Foreign Trade Division.

60 APPENDIX G: ADDITIONAL DATA

Ports by North American Region

Pacific Atlantic

Canadian U.S. Island U.S. North U.S. South Canadian U.S. North U.S. South U.S. Pacific Pacific Pacific Pacific Atlantic Atlantic Atlantic Gulf Coast

Fraser Apra Anchorage Long Beach Halifax Albany Brunswick (GA) Beaumont

Vancouver (BC) Barbers Point Everett Los Angeles Montreal Baltimore Canaveral Corpus Christi

Hilo Grays Harbor Oakland Saint John Boston Charleston Freeport

Honolulu Longview Richmond (CA) St. John’s Camden Fernandina Galveston

Greater Baton Hueneme Olympia San Diego Toronto Chester Jacksonville Rouge Hampton Kahului Portland (OR) San Francisco Miami Gulfport Roads New York/ Haunakakai Seattle Palm Beach Houston New Jersey

Kawaihae Tacoma Philadelphia Ponce Lake Charles

Vancouver Port Nawiliwili Portland (ME) Manatee (WA) Everglades Portsmouth San Juan Mobile (NH)

Richmond (VA) Savannah New Orleans

Wilmington Wilmington Panama City (DE) (NC)

Saint Bernard

Tampa

Mileage to Selected Inland Destinations

Philadelphia Norfolk Baltimore New York

Buffalo, NY 357 542 357 370

Chicago, IL 744 853 684 798

Cleveland, OH 421 532 363 475

Cincinnati, OH 568 585 499 661

Columbus, OH 461 555 392 554

Detroit, MI 578 687 518 632

Indianapolis, IN 635 697 566 728

Kansas City, MO 1126 1159 1057 1219

Louisville, KY 668 647 599 761

Memphis, TN 988 867 894 1092

Twin Cities, MN 1146 1255 1086 1200

Pittsburgh, PA 297 406 237 388

St. Louis, MO 681 908 357 735

Source: Maryland Port Administration, Mileage Chart. Available at: .

61 Due to the large file size, Appendix H (Maps, pages 62 ‐ 74) has been extracted to a separate file. APPENDIX I: END NOTES Appendix I: End Notes

1 Output, labor income, and tax revenue 20 Weigley, Russell et al. (1982) Philadelphia: 42 “DPRA Set to Exercise Its Develop- impacts are for 2005, expressed in A 300-Year History. ment Clout,” The Philadelphia Inquirer, 27 October 1993. 2006 dollars. This is a result of the 21 Ibid. particular economic model employed. 43 “Merging of Port Boards is Uneasy,” 22 Ibid. 2 Given the constraints of the data avail- The Philadelphia Inquirer, 16 May 1994. 23 William Stanley Ray (1914) The Port of able, this analysis was restricted to 44 “Holt Unites Port Officials: They Are Philadelphia: Its Facilities and Advantages, port activity in Philadelphia and South Angry At Him,” The Philadelphia In- State Printer, Harrisburg, PA. Jersey. quirer, 11 January 1995. 3 The more labor-intensive facets of pe- 24 Ibid. 45 “Political Maneuvers Sinking Port troleum-related activity in the region 25 Merger,” The Philadelphia Inquirer, 23 are in the refining of crude, which is Taylor and Schoff, The Port and City of August 1998. beyond the scope of this analysis. Philadelphia. 4 There is a citation in the original text. 26 Ibid. 46 The IMPLAN model (Stillwater, MN) has been used for many years in Phila- 27 5 Arthur Donovan & Joseph Bonney, The William Stanley Ray, The Port of Philadel- delphia by the Economy League of

Box that Changed the World, Common- phia. Greater Philadelphia (formerly the

wealth Business Media, 2006. 28 Ibid. Pennsylvania Economy League), by 6 Delaware Valley Regional Planning Philadelphia Commerce Department, 29 Weigley, Russell et al. (1982) Philadelphia: Commission, and Select Greater Phila- Philadelphia Port Facilities Study, 1978. A 300-Year History. delphia. 7 South Jersey Port Corporation. 30 Taylor and Schoff, The Port and City of 47 Counties include: Philadelphia, Bucks,

8 Port of Wilmington. Philadelphia. Delaware, Montgomery and Chester, 9 American Association of Port Authorities 31 Pennsylvania Historical and Museum PA; Camden, Salem, Gloucester, Bur- (AAPA). Commission, “Pennsylvania State His- lington, and Cumberland, NJ; and New tory: 1945-1995.” Available at: . 2007. is a function of investment in equip- 32 Ibid. ment, labor productivity, and utilization 11 AAPA, US/Canada Container Traffic in of live storage areas (see attached table TEUs, 2006. 33 South Jersey Port Corporation. at end of document.) 12 Brooks, Mary R. et al, “Short-Sea Ship- 34 AAPA. 49 U.S. exports of brewing waste have ping on the East Coast of North Amer- 35 Christopher Raymond Dougherty, “The grown from about $70 million in fiscal ica: An Analysis of Opportunities and Department of Docks, Wharves, and 1998 to over $150 million in fiscal Issues,” Dalhousie University, Transpor- Ferries: Making Philadelphia’s Modern 2006. Volume has also almost doubled tation Planning/Modal Integration Ini- Waterfront,” The PhillyHistoryBlog, from just over 600 million metric tons tiative, March 31, 2006. Available at: , September 2007. pected to continue as U.S. ethanol pro- 14 Steve Fitzroy, Expert Panel Conference duction continues to expand. The top Call, July 26, 2007. 36 Delaware River Port Authority, History, destination markets are Mexico, Ire- Available at: . Kingdom. Although several member 16 In the New York/New Jersey region, 37 “Three States Vow to Aid Area Port,” states of the EU-27 are in the top 20 Port Elizabeth, Port Newark, Howland The Philadelphia Inquirer, 5 April 1988. destinations, the EU share has fallen Hook, Red Hook, and Global Marine from 96 percent in fiscal 1997 to 30 38 terminals are all dedicated to container “State control of city port is urged,” The percent in fiscal 2006. Exports of

cargo. Philadelphia Inquirer, 15 June 1988. brewing waste closely track ethanol 39 “Study says ‘river war’ hurts ports,” The production. Source: Outlook for U.S. 17 Estimated to be approximately 18.8 mil- Philadelphia Inquirer, 7 September 1988. Agricultural Trade, Economic Research lion TEU for the North Atlantic port Service and Foreign Agricultural Ser- range. 40 “Group Urges Governor to Activate Port Rescue Plan, The Philadelphia In- vice, May 31, 2007. 18 Container Port Strategy, OCS 2007. quirer, 23 August 1988. 19 National Oceanic and Atmospheric As- 41 “At the Helm, Investment Banker to sociation. Available at:

tidesandcurrents.noaa.gov/ports.html>. phia Inquirer, 13 October 1989.

75 APPENDIX J: RESOURCES Appendix J: Resources

Cover Photo ______(1988) Group Urges Gover- Fiscal Impact Report. April. Available nor to Activate Port Rescue Plan. The at: . Community College of Philadelphia (2000) The Economic Impact of the Holcomb, Henry (1993) DPRA Set to Reports and Other Research Community College of Philadelphia. Exercise Its Development Clout. The Prepared by the Office of Institutional Philadelphia Inquirer. 27 October. A. Strauss-Wieder Inc. & Rutgers Eco- Research. February. Available at: nomic Advisory Service (2005) Eco- ______(1994) Merging of Port . Jersey Port Industry, 2004. Prepared Inquirer. 16 May. for New York Shipping Association. Delaware Department of Transportation ______(1995) Holt Unites Port August. Available at: . February. Inquirer. 23 August. Delaware River Port Authority (2007) Asher, James (1988) Three States Vow to Jensen, Arthur (1963) The Maritime History. Available at: . Michigan. ______(1988) State Control of Donovan, Arthur and Joseph Bonney City Port is Urged. The Philadelphia Keystone State International Terminals (2006) The Box that Changed the Inquirer. 15 June. (2005) Development Plan. July. World. Commonwealth Business Me- Biotechnology Council of New Jersey dia, East Windsor, New Jersey. Le-Griffin, Hanh Dam & Melissa Mur- and Deloitte and Touche USA (2007) phy (2006) Container Terminal Pro- Dougherty, Christopher Raymond New Jersey Biotechnology: A Robust ductivity: Experiences at the Ports of (2007) The Department of Docks, State of Health. June. Available at: Los Angeles and Long Beach. Febru- Wharves, and Ferries: Making Phila- www.metrans.org/nuf/documents/Le PhillyHistoryBlog. September. Avail- . -Murphy.pdf>. able at: . River and Bay (2007) Annual Summary Movement Analysis. Prepared for the of Cargo and Piers for the Delaware Economic Development Research Wilmington Area Planning Council. River Ports, 2006. January. Group (2005) The Cost of Congestion September. Available at: to the Economy of the Portland Re- Maritime Exchange for the Delaware . ness Alliance, Metro, Port of Portland, Martin Associates (2002) The Local and Canadian Pacific (2006) Annual Report. and Oregon Department of Transpor- Regional Economic Impacts of Marine Available at: . Authority. July. bodyzr5nmdl6rws33faihup35ychona5t Economic Development Research h6xwsd72lb4gl3wpzgovsjq2s2iy3xbojv ______(2002) The Local and Re- Group & DELCAN (2003) Economic fdkvzylszynuoilb/cpr-ar-2006- gional Economic Impacts of the South Impact Analysis of Investment in a cor.pdf>. Jersey Port Corporation. Prepared for Major Commercial Transportation the Delaware River Port Authority. Cohn, Gary (1988) Study Says ‘River System for the Greater Vancouver July. War’ hurts ports. The Philadelphia In- Region. Prepared for the Greater Van- quirer. 7 September. couver Gateway Council. July. Avail- ______(2005) The Local and Re- able at: . tegic Seaport of Philadelphia. Prepared vestment Banker to Head State Port for the Office of PennPORTS, Penn- Agency. The Philadelphia Inquirer. 13 Econsult Corporation (2006) The Uni- sylvania Department of Community October. versity of Pennsylvania Economic and and Economic Development. April.

76 APPENDIX J: RESOURCES

______(2005) The Economic Im- Study. Main Channel Deepening. February. pact of the Port of Tacoma. Prepared ______(2007) Philadelphia Im- ______(1998) Ports of Philadel- for the Port of Tacoma. May. ports: January 2006 to March 2006. phia, PA; Camden, NJ; and Wilming- ______(2007) The Local and Re- January. ton, DE; and Ports on the Delaware gional Economic Impacts of the Port River. Port Series No. 8. ______(2003) Southport Master of Houston. Prepared for the Houston Plan. November. ______(2004) Delaware River Port Authority. February. Main Channel Deepening Project. Port Authority of New York/New Jersey ______(2007) The Local and Re- Supplement to Comprehensive Eco- (2006) Strategic Plan. August. Avail- gional Economic Impacts of the U.S. nomic Reanalysis Report. February. able at: . 20Del%20Riv%20Final% Maryland Port Authority (2002) Strategic Port of Wilmington (2007) Port Over- 20Supplemental%20Report.pdf>. Plan. Available at: . Ray, William Stanley (1914) The Port of Maritime Administration (2006) Vessel Philadelphia: Its Facilities and Advan- Calls at U.S. and World Ports, 2005. Meigs, John (1914) The Port of Philadel- tages. State Printer, Harrisburg, PA. April. Available at: . Prepared for the Philadelphia Regional Select Greater Philadelphia (2007) Im- Urban Engineers (2005) Option D-2 Port Authority. October. pact of Higher Education in Greater Southport Master Plan, Pier 122 South Philadelphia. October. Available at: Mercer Management Consulting (1993) and 124 South. Prepared for the Phila- . for the Delaware River Port Authority. Virginia Port Authority (2006) Strategic November. South Jersey Port Corporation (2005) Plan. August. Available at: . report/4_ReportFile_SJPC%202005% nomic Impacts of Aviation. Available 20Annual%20Report.pdf>. Weigley, Russell F. et al. (1982) Philadel- at: . Stenvert, Remco and Andrew Penfold Foundation, U.S.A. (2007) Container Port Strategy: Pennsylvania Economy League— Emerging Issues. Ocean Shipping Wilson, Robert H. (1972) Philadelphia: Southeast Division (1998) Greater Consultants Limited. Land of Enterprise. Swarthmore Press, Philadelphia’s Competitive Edge: The Philadelphia, PA. Nonprofit Culture Industry and its Taylor, Frank H. & Wilfred Schoff Economic Value to the Region. Pre- (1912) The Port and City of Philadel- pared for the Regional Arts and Cul- phia. International Congress of Navi- ture Economic Initiative. September. gation. Presentation Materials Available at: . Feasibility Study. Prepared for South- ern California Association of Govern- Planning Commission.” 18 July. Philadelphia City Planning Commission ments. June. Delaware River Maritime Enterprise (2007) The Working Port. Central Council (2007) Material from: Delaware Riverfront Plan Working Tippetts Abbett McCarthy Stratton (1978) Philadelphia Ports Facilities “Presentation to Pennsylvania Stake- Paper. February. Available at: . Department of Commerce. July. Delaware River Port Authority (2006) Material from: “Southern New Jersey Philadelphia Regional Port Authority TranSystems (2006) Port of Philadelphia Forecast of Container Growth. Waterfront Master Plan.” 11 January. (2007) History. Available at: Available at: . U.S. Army Corps of Engineers, Philadel- pdfs/waterfront_plan.pdf>. ______(2006) North Atlantic Ports phia District (1992) Delaware River Comprehensive Navigation Study: Moffatt & Nichol and the American

77 APPENDIX J: RESOURCES

Association of Port Authorities (2004) Director, South Jersey Port Corpora- cer, Delaware River Port Authority. Material from: “Trade Trends for Fu- tion. July 20, 2007. July 26, 2007. ture Planning.” April. Breeman, Paul, Director of Planning, Packer, Herb, Executive Director, Office Paul F. Richardson & Associates (2007) Holt Logistics Corporation. July, 6 of PennPORTS, Pennsylvania Depart- Material from: “The Impact of the 2007. ment of Community and Economic Philadelphia Regional Port Authority’s Development. July 13, 2007. Butler, Boise, President, ILA Local 1291. Plan for the Food Distribution Center September 6, 2007. Preski, Brian, former Chairman, Phila- to the Maritime Industry.” February. delphia Regional Port Authority. July Dahlburg, Ted, Manager, Office of Paul F. Richardson & Associates (2007) 26, 2007. Freight Planning, Delaware Valley Material from: “A Briefing to the Regional Planning Commission, June Rochford, Dennis, President, & Lisa PIDC on the Maritime Stakeholders’ 26, 2007. Himber, Vice President, Maritime Initiative.” May 30. Exchange for the Delaware River and Estey, John, Chairman, Philadelphia Bay. July 23, 2007. Regional Port Authority. November 7, National Panels 2007. Ruf, Joseph, Manager, Customer Service, Penn Terminals. August 21, 2007. Fitzroy, Steve, Volpe Transportation Cen- Fisk, Stephen, Manager of Business De- ter; Elizabeth Ogard, Principal, Prime velopment, Canadian Pacific Corpora- Schulz, Uwe, President, Philadelphia Focus, LLC; John Rounesville, Hori- tion. August 13, 2007. Marine Trade Association; & Robert Palaima, President, Delaware River zon Lines; and Sashi Kumar, Dean, US Goetz, Bill, Vice President, CSX. August Stevedores. August 3, 2007. Merchant Marine Academy. Conference 15, 2007. Call. July 25, 2007. Tigue, Thomas, Managing Director, Hankowsky, William, Chief Executive Delaware River Maritime Enterprise Fitzroy, Steve, Volpe Transportation Cen- Officer, Liberty Property Trust. Au- Council; & William Keller, Pennsyl- ter; Elizabeth Ogard, Principal, Prime gust 27, 2007. Focus, LLC; and Sashi Kumar, Dean, vania House of Representatives. Au- US Merchant Marine Academy. Confer- Haroldson, John, Manager, International gust 1, 2007. Trade, & Thomas Keefer, Deputy ence Call. November 16, 2007. Walsh, Nicholas, Strategic Planning Di- Executive Director, Port of Wilming- rector, Philadelphia Regional Port ton. August 2, 2007. Authority. July 17, 2007. Interviews Howland, Susan, President & CEO, The Westerman, Nicole, Chief of Staff to the Howland Group. September 7, 2007. Adams, Peggy, Chairman, Bucks County Secretary of the Budget and Admini- International Trade Council; Thomas Lewis, H. Craig, Vice President of Cor- stration, & Kate Phillips, Special Advi- Jennings, Partner, Saul Ewing LLP; & porate Affairs, & James Klaiber, Man- sor to the Governor, Commonwealth Len Crescenzo, Manager, Kinder Mor- ager of Corporate Affairs, Norfolk of Pennsylvania. August 14, 2007. gan. August 13, 2007. Southern. August 15, 2007. Woodcock, Janice, Executive Director, Balzano, Joseph, Executive Director & Matheussen, John, Chief Executive Offi- Philadelphia City Planning Commis- CEO, & Jay Jones, Deputy Executive sion. July 23, 2007. Zimny, Ed, Paul F. Richardson & Asso- ciates. August 2, 2007.

78 Prepared For:

In Conjunction With:

With Assistance From: