New Canal, New Channel: Port of Philadelphia Enters a New Era

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Interview with Jeff Theobald

PHILAPORT CEO Jeff Theobald

BY TONY WEST
2018 is the year that Philadelphia’s historic port officially entered the post-Panamax world, when the world’s largest cargo ships are able to sail directly from China and East Asia to the Northeastern United States via the Panama Canal – and the Delaware River is ready to receive them, thanks to the deepening of the shipping channel to 45 feet by the Army Corps of Engineers.

The implications for our region are enormous. If we play our cards right, tens of thousands of jobs and hundreds of millions of new dollars may ripple out from the port. But challenges lie ahead and there is work to be done.

One man with a seagull’s-eye view of this change is PhilaPort’s CEO Jeff Theobald. He gave a succinct account of the substantial progress to date and of what will come next.

PhilaPort’s 2017 year-end report confirmed a record year for port traffic, with Philadelphia growing faster than any other major U.S. port – “a remarkably high level,” Theobald said. As the midyear mark in 2018 approaches, Theobald said, things have calmed down some, but he still expects around 5% container growth by the end of the half.

Channel-deepening work is winding to a close. Theobald estimated there will be a complete 45-foot channel one way by summer’s end; the two-way channel should be finished around the first of next year.

But the port already welcomed its largest ship ever earlier this spring, the MSC Shuba B. Larger ships are already testing this port. “Pilots have said that if dredging was not as far long as it is, they would not have been able to do it,” Theobald reported.

Skeptics have doubted Philadelphia’s competitiveness even at 45 feet, since other Northeastern ports are at 50 feet. But Theobald revealed PhilaPort has wiggle room – thanks to its 6-foot tides. “That means we can accommodate 51 feet, with proper planning,” he explained.

Further, he noted, “Philadelphia will not be the first port of call for Asian container ships. They may land first at Savannah or Charleston and work their way north, or dock first at Boston and work their way south.” Many will thus have shallower draft by the time they reach our docks.

More cargo room and more vessel traffic require more of everything else. The seven new supersized cranes that are being installed this year are one part.

The $300 million in government investment by Gov. Tom Wolf is mostly in the engineering and bidding phase now.

More warehouse space is urgent. One of PhilaPort’s strengths is an unusually large amount of riverfront land available for development.

Site work is planned on 80 acres of land at Southport to expand PhilaPort’s vehicle-processing capacity. At the former Produce Center, 29 acres can be retooled, Theobald said, to accommodate a new dockside state-of-the-art refrigerated facility, enhancing Philadelphia’s already-large perishable-produce industry, as well as allow for added warehouse space for all the new containers.

Intermodal links also must be examined, and repurposed or upgraded as needed, said Theobald. The port’s rail partners, CSX and Norfolk Southern, own much land that can be studied for ways to improve efficiency – or perhaps to free up some for additional warehousing. PennDOT must study the adjacent highway systems to make sure they are prepared to handle added truck traffic.

The port’s terminal tenants will need more manpower as well. “We are working with AFL-CIO, the International Longshoremen’s Association and the College Consortium to develop a training module for new workers in port-related jobs,” said Theobald. “It’s on the cusp of happening.”

In IT, the port is exploring blockchain technology – the architecture behind crypto-currency – to speed port transactions. Theobald said that the Holt Cos., who constitute a major tenant at PhilaPort, and the giant Norwegian container shipper Maersk Line, are working on such a project.

When imports grow, a port operator and a shipper both want to see exports grow in tandem. That maximizes use of warehouse space and cargo space, so that transporters don’t have to deadhead back empty.

PhilaPort is a major Northeast delivery point for Korean-made automobiles. Theobald would like to attract American-made auto exporters to its well-equipped roll-on roll-off facility. Construction equipment – Caterpillar machines, for instance – could be another attractive customer.

Key to PhilaPort’s marketing edge, Theobald insisted, is its labor force.

“We have a great relationship with the Teamsters and ILA,” he said. “They are hard-working and dedicated, with the highest productivity in the Northeast. They are why we consistently beat New York City.”

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