PORT: S. Jersey Port Growing With Demand

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BY TONY WEST/ Even if the Delaware River channel were never to reach 45 feet – some of our ports have been placing big, independent bets on a brighter future.

Take a look at the Jersey side of the river. There, in the Borough of Paulsboro, just below the airport in Gloucester Co., a 200-acre, $175 million first phase is moving into the wharf construction of a new facility. When it’s complete, in 2013, the first new Delaware River marine terminal in 50 years will serve (New Jersey hopes) a robust market in bulk and breakbulk products that doesn’t depend on channel-deepening, doesn’t depend on Panama Canal-widening – although it is positioned to take advantage of both.

WORK HAS now finished on first phase of new Paulsboro Marine Terminal, which included dredging berths for wharfs.

This is the pride and joy of the South Jersey Port Corp., a state agency that manages three terminals – soon to be four, when Paulsboro comes onstream.

SJPC has long specialized in bulk cargoes (like cement) and breakbulk cargoes (like plywood). During the global expansion in the early 21st century, its docks had all the business they could handle; they turned away a minimum of 20 ships in 2006. That hasn’t been a problem since the Great Recession struck. “Our volume is down 40%,” notes SJPC Executive Director Kevin Castagnola (although, he said, revenue-wise the port has had a pretty good year).

Already, though, he is spotting signs of a turnaround. “We have renewed some business that had stopped coming here because of the economy,” he explains. There is rising demand for steel and plywood, chiefly in the manufacturing sector. A fair amount of Marcellus Shale pipeline material has come into this port. If construction picks up once more, SJPC expects to boom with it. Construction materials are one of its traditional bread-and-butter cargoes. So it has high hopes for Paulsboro.

The site’s last use was for a petrochemical facility, a waning industry on the Delaware. SJPC aims to develop Paulsboro to target growth areas instead, with what it styles an “omniport” that can accommodate two to four ships. What’s an omniport? It is a flexible site which can shift between a variety of uses with moderate refitting, and is particularly adapted to the kind of manufacturing Castagnola sees stateside growth in: niche manufacturing or “niche processing”. Typically, these are based on bulk or breakbulk cargoes which receive some value-added processing on site before they are moved somewhere else for final production or assembly.

By their nature, niche processing is job-specific, but a typical example is the work of one of SJP’s successful tenants, Camden Yards Steel. This firm imports sheet metal in huge, tight coils for ease of shipment. It then uncoils the metal, flattens it and stamps out sections for end users, all of which is performed in the port facility; and then warehouses them for distribution. It is this kind of manufacturing work Castagnola sees coming from overseas – often coming back after having been outsourced many years ago.

ONE POSSIBLE use for Paulsboro Terminal sketched out in this conception: offshore wind turbines could be assembled here and shipped directly to their stations at sea off New Jersey coast.

A flexible facility can be repurposed in many creative ways. On target vigorously being explored by SJPC, for example, is the offshore wind-turbine industry, which is certain to develop in South Jersey. SJPC would like to see the wind turbines assembled at Paulsboro, where components can be easily shipped in and finished products easily shipped out to their nearby sites. “It just makes sense that Southern New Jersey and Paulsboro in particular should be the epicenter of this great new industry,” maintains Marlin Peterson, who is the new terminal’s project manager. “There is just a natural synergism and resulting cost efficiency of having manufacturing of the turbines, towers and blades in roughly the same footprint as where the developers assemble the components and the transport them out to sea for installation.”

Work began on the Paulsboro site last year. To date, the platforms for the new terminal have been laid down: 325,000 cubic yards have been dredged while 300,000 cubic yards of fill has been placed to elevating the site two to 10 feet – high enough to be above the 100-year floodplain, and also to adapt to the potential for sea-level rise caused by climate change.

Maintaining a strong bulk/breakbulk capacity on the Delaware River is a core mission of the State of New Jersey. While international trade has shifted toward containerization in recent decades, bulk/breakbulk facilities can provide more benefits per ton of cargo to surrounding communities. That’s because they require more handling, thus create more jobs. Steering SJPC toward “niche processing” businesses may create even more jobs.

That would be fine with SJPC. As a state agency, it seeks to carry out a mixed mission to maximize jobs while optimizing revenues. The corporation is governed by an 11-member board appointed by the Governor of New Jersey. Breakbulk commodity shipments won’t go away and they will always tilt toward smaller vessels as compared to the container industry. That’s because raw-material exporters tend to be located in less-developed countries and their source can be in relatively isolated areas. Conversely, deep-draft ports favor manufactured-goods that are generated in denser, urban locations, such that economies of scale throughout the supply chain can be achieved.

“However, commodity shipments do have the preference to be larger and heavier,” notes Peterson. “They require more-specialized handling as a result.”

What does it take to be a niche-terminal? Peterson says it calls for a sensitive balancing act between infrastructure, labor force and market demand. The SJPC’s goal is to be able to offer any customer a custom-tailored “linkage” between the ocean, other transportation modes – and the customer’s own internal process, the “black box” as Peterson calls it.

Marketing for the Paulsboro Terminal is underway. SJPC has a number of Memoranda of Understanding, which it is working to convert into lease agreements. In common with its sister ports on the Delaware, SJPC is rich with intermodal transportation options. Rail, ship and highway connections are densely interlinked here.

“Obviously, the variety of terminals of the different ports along the Delaware have niche interests on certain issues and cargoes,” comments Castagnola. Shippers can always move if they want and like to have options. “Each terminal markets for the shippers to do business at their facilities,” says Castagnola. “But if the business does not come to us, we would rather keep that business in the Delaware River Complex and not to a competing port in another region of the country.”

In a sense, SJPC already has another new terminal on the Delaware – or at least a new name. Its venerable Beckett Street Terminal in Camden underwent a name change in the later part of 2011, to Joseph A. Balzano Marine Terminal. (Its other two sites are the Broadway Terminal, farther south in Camden, and the Salem Marine Terminal in Salem Co.) The new name marks the sad loss of an old presence. Joe Balzano was the face of SJPC for decades, a man whom the New York Times called “one of the best operators in the world.” Balzano, who died in October 2011, was honored by having his name bestowed on the facility to which he had devoted his life.

The transition to new leadership has been fairly seamless. Balzano’s long-time assistant Castagnola moved into the top spot with little fanfare and the port’s management team remains otherwise unchanged.

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One Response to PORT: S. Jersey Port Growing With Demand

  1. The Port of Paulsbor project is an admirable endeavor for the Borough of Paulsboro, Gloucester County, and the State of New Jersey. And, I’m certain that the project, when completed in its entirety, will create many opportunities for employment. A similar objective was launched about 1917, when the then Socony Vacuum Oil Company built an oil refinery on land that once belonged to the Paul family. Soon after, other oil companies bought up the other available Delaware River front property and land adjeacent to the nearby Mantua Creek, to erect oil storeage tanks, dock facilities, a chemical plant [IP THOMAS,INC.] etc. Sure, jobs were created that provided work to many residents of Paulsboro and surrounding communities. However, recreation facilities at any point along the Delaware River and Mantua Creek inside the Borough were either sorely lacking or non-existant.
    A very small “Park” aka “Lincoln Park”, that is about the size of a football field, lies wedged between the [now] Paulsboro Refinery and an oil storeage/pipeline facility. Unfortunately, no one can actually walk down to the water’s edge, without “bush wacking”it through heavy underbrush on a steep slope, a chain link fence, and “No Trespassing” signs. The park itself has a few playground pieces, a few shade trees, a few picnic tables, toilet facilities that are not always open, and a couple of benches. The once famous Lincoln Park of the late 1800’s and early 1900’s used to be here, along with a large hotel and a ferry slip. The facility was destroyed in a fire prior to World War I. Even before that, though, Fort Billings was built on the very first land purchase by the Continental Congress in 1776. That, too, was eventually swallowed up by commercial development. For most people in Paulsboro, however, there is no public access to the waterfront at either high or low tide along the Delaware or Mantua Creek. Any thought of a tree lined area along the river, with benches, shade from the summer sun, and pathways for walking, jogging or riding a bicycle has been dashed in the name of commercial progress and economic priorities. This is a repeat of the short sightedness of the town fathers early in the last century. Money took precedence over rest and relaxation. It was not as important as a paycheck. It would seem that a similar philosophy abounds with the current Port of Paulsboro project. So, if you are a tax payer or a younger resident looking for a quiet, enjoyable place to spend some free time along the river in Paulsboro, your only recourse is to get a ride to River Winds in West Deptford or the Red Bank Battlefield Monument in National Park. Industry has no room for you in Paulsboro. Another irony is the fact that the Paulsboro Refinery, for the most part, is not even inside the Borough limits but is actually a part of Greenwich Township and Gibbstown. So, Borough residents get all of the smoke and fumes from the Refinery, and all of the questionable esthetics of its oil refinery exoskeleton, but little iof any of the tax revenue it generates. It would seem that some things in life really don’t change. And, common sense, logic and long term planning are also not perceived as that important either. That’s why I left Paulsboro years ago for greener pastures.

    John N. Perian, Jr.
    October 20, 2012 at 12:02 am

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