State Commits $300 Million to Port of Philadelphia, but PRPA Staff Is Slashed

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LT. GOV. Mike Stack looks on as PRPA Board Chairman Jerry Sweeney answers a question concerning port improvements at the press conference announcing a $300 million state investment into the Port of Phila. Photo by Wendell Douglas

by Joe Shaheeli
When Gov. Tom Wolf joined US Sen. Bob Casey (D-Pa.), elected officials and stakeholders to tout a comprehensive Capital Investment Program at the Port of Philadelphia, proponents of Southport grew worried.

Would their long effort to create additional super-modern terminals with the development of Southport’s acreage be consigned to a page in port history? For now, that’s an “if,” since present port demands for increasing space to handle millions of cars scheduled to arrive here will be available at the former Naval Base site.

The $300 million is on top of over $100 million spent to deepen the river’s channel another five feet to accommodate the vast number of ships now with a draft of up to 45 feet. Making the dredging program a reality was the work of Congressman Bob Brady (D-Phila.) which brought in federal money amounting to over $100 million and the additional millions from the State thanks to Casey, Gov. Ed Rendell, State Rep. Bill Keller (D-S. Phila.) and State Sen. Mike Stack, now Lieutenant Governor. They kept reminding their colleagues the port was viable and would produce more revenue and jobs. After all, it is the state’s only direct gateway to the world by sea.

The Philadelphia Regional Port Authority is responsible for the city’s port terminals. As a landlord, it has to provide maintenance, upkeep and equipment needed to handle today’s ships, and lobby for needed funds from both Harrisburg and Washington. It’s Board seeks to balance its budget.TIts new CEO Jeff Theobald, was selected by the PRPA Board after a national search, to replace James T. McDermott, Jr., who held that post for well over a decade. In charge since last August, Theobald was CEO and president of Ports America Outer Harbor in Oakland, which managed a terminal facility, with oversight of 50 management staff and over 200 union employees. Prior to that, he spent much of his career in Asian port operations.

When he was selected, he told the PRPA Board, “I am delighted the PRPA Board has selected me at this very exciting time for the Port of Philadelphia. I look forward to do everything I can to assure the port meets the challenges of the future and fulfills its great potential.”

Yet employees at PRPA have been told a cut of staffing by 30% is now required. Those responding so far are long-time employees, four guards and four maintenance men. Those pondering a decision to take a buyout fear they may face the ax if they don’t.

Congressman Brady is upset by the first major policy announcement coming from Theobald, which is that PRPA staff must either voluntarily accept buyouts or face termination if that figure isn’t reached by the buyouts. Brady noted the port had grown quietly but quickly under its former CEO, McDermott, whose staff fielded all the demands made of them in timely fashion. Port downtimes for ships had been dramatically reduced; new equipment had been added; modernization and upkeep of facilities was a round-the-clock priority.

So Brady finds it “incredulous” that a new port director will seek to save dollars and prove his worth at the expense of the 90-plus staffers of the PRPA. He noted, “McDermott, over his long positive tenure in that post, had a salary of about $150,000. Theobald now commands a salary of $290,000. On top of that, he received $25,000 for relocation expenses and a $1,400-a-month car allowance.”

Brady wonders what kind of a car will require such an allowance and wonders why McDermott’s office now needs to be renovated for about $50,000.

Now, with dredging about complete, the $300 million state investment reportedly will go to double warehousing and increase needed acreage for the continued growth of auto imports. The success of car imports has begun to show a jump in American-made cars being shipped overseas by the same vessels bringing them in.

Wolf stated his “number-one priority is to continue to strengthen Pennsylvania’s economy to support the middle class and this capital investment program will give the Port of Philadelphia the tools it needs to improve its competitive position and create thousands of family-sustaining jobs while increasing state revenues.”

He added, “With its major economic impacts throughout the state, my administration understands the value of Pennsylvania’s port asset in Philadelphia.”

“This is one of the largest economic-development projects in the state,” Casey said. “I have worked since I was elected to ensure the deepening of the Delaware River, an investment in job retention and creation for the state.”

The program will modernize the port’s three operating terminals, bring in additional Post-Panamax and other cranes needed to provide short-turnaround stays for the bigger ships as they arrive. “Panamax” is shorthand for the enlargement of the Panama Canal, a mammoth project that was finished on June 26 of this year, which permits huge vessels to sail directly from Asia to the East Coast, rather than unloading their cargo on the West Coast. Bigger ships need bugger cranes.

“The State’s $300 million investment is a good deal not just for the port’s workers and for Philadelphians, but for taxpayers across the entire state,” said Philadelphia Mayor Jim Kenney. “This increased capacity will be needed in the years to come, since the deepening of the Delaware River’s main navigation to prepare for bigger ships is scheduled to be completed in early 2017. So we are grateful to the Wolf administration, to state lawmakers, and, of course, to the hard-working men and women of the Port of Philadelphia.”

Improvements are expected to double container capacity at the Port, provide increased breakbulk (non-containerized) cargo capacity and bring a substantial increase in automobile-handling capacity.

A total direct job increase of 70% is projected from the current level of 3,124 to a projected 5,378 direct jobs. Total employment at the port will also increase, from 10,341 to 17,020, and state and local tax revenues generated will increase from the current $69.6 million to $108.4 million annually.

“The investment in the Philadelphia port will not only provide overdue upgrades to the existing ports, it will also add thousands of jobs to the region,” said Keller. “I would like to thank Gov. Wolf for securing the funds for this very important project.”

“Once again, the Port of Philadelphia is indebted to Gov. Wolf and his administration,” said PRPA Chairman Gerald H. Sweeney. “In the recent past, Gov. Wolf had funded the critical final stages of the 45-foot Channel Deepening Project and championed other major port improvements. Now, this $300-million capital investment will enable the port to significantly grow family-sustaining jobs and dramatically expand all our business lines.

“This investment by the governor, coupled with the talented dedication of the entire port community, ensures the Port of Philadelphia will capture a significant share of the increased vessel traffic on the East Coast resulting from the expanded Panama Canal and our deeper channels.”

As the latest example of the successful public/private partnerships at the Port, Astro Holdings, Inc., the tenant of the Packer Avenue Marine Terminal, will also purchase one of the Post-Panamax container cranes for the terminal, as well as dedicate significant privately owned port acreage, in the form of the Holt operation’s 40-acre “Publicker” site located next to the Packer Avenue facility, for container growth through Packer Avenue Marine Terminal.

Officials of PRPA expect these improvements will result in no less than a doubling of the cargo-handling capacity at the terminal, already the busiest and most multi-use terminal at the Port of Philadelphia. Container-handling capacity will especially increase, with a 900,000 TEU capacity. “TEU” or “20-foot equivalent unit” is an industry measurement for a standard cargo container.

The Ports Automobile Import/Export facility, which currently processes 150,000 cars and employs more than 300 direct workers, will also benefit by receiving about $90 million of the governor’s Capital Investment Program. Since 2010, Glovis America has been the main customer of the port’s auto-processing facility, located in South Philadelphia adjacent to the Packer Avenue Marine Terminal, bringing Hyundai and Kia automobiles on vessels for eventual distribution to dealerships throughout the region.

Improvements to the port’s automobile-handling operation will include the addition of 155 paved and fenced acres above the flood plain at the port’s Southport site; the conversion of the former seaplane hangar at Southport into a second auto-processing site; enhancements at the main auto-processing site at Pier 98 Annex; and the establishment of a framework that provides flexibility for use of the land the port needs for containers and automobiles, as determined by market demands.

Tioga Marine Terminal will be the third beneficiary of the State Capital Investment Program. About $12 million has been earmarked for improvements to the main on-dock warehouse that has been successfully handling and processing Brazilian wood-pulp cargoes since 2014. A second warehouse at Tioga will be converted into a food-grade warehouse, allowing the port to increase its wood pulp volumes to meet the demands of Pennsylvania companies requiring this material, which goes into a wide range of sanitary-paper products. Improved rail access and the purchase of a second mobile harbor crane will also add capacity for the terminal.

This Capital Investment Program aims to provide an alternate, more-efficient and expeditious solution to reach the port’s goals as embodied in the recent Southport RFP: growing container capacity, accelerating job creation, and capitalizing immediately on the river-dredging program. It will ensure that the port will be competitive and positioned for growth immediately.

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