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Maritime potential seen as big, possibly hindered

July 16, 2008

Henry J. Holcomb, Philadelphia Inquirer


Seaports on the Delaware River are again at a crossroads, facing major opportunities for growth and long-festering feuds that experts say could block it.

The long-delayed deepening of the river, to allow larger ships, is inching forward, despite a long Pennsylvania-New Jersey dispute. Gov. Rendell and others tout tens of thousands of jobs on the horizon and are planning to expand the port.

A $100,000 study to be released today, sponsored by an agency often skeptical about the port's future, ranks the maritime industry among the region's largest and best-paying employers. But it also warns of potential-limiting issues.

Many changes favor port growth. Imports of perishable cargo are growing from the southern hemisphere, long a big business here. The anticipated 2014 completion of a larger Panama Canal will increase cargo traffic from Asia to the East Coast. And congestion on U.S. highways and railroads has prompted Congress to push for moving cargo between U.S. coastal cities by ship.

Private investors here and worldwide see cargo volume growing faster than the transportation systems that handle it and are investing in creating modern port facilities. Until recently such projects were built almost exclusively with government money.

"Private investors see long-term, relatively stable revenue," said Paul Heylman, a maritime lawyer in Washington for the Saul Ewing L.L.P. law firm.

John H. Estey, chairman of the Philadelphia Regional Port Authority and Rendell's former chief of staff, said a formal process for selecting a private port-expansion partner will begin next month and be complete by year's end. He said two dozen private enterprises - ship operators, investment banks and consortiums - had expressed interest.

Meanwhile, the South Jersey Port Corp., a state agency, is in the early stages of developing a new major terminal in Paulsboro.

Economist Joel Naroff, of Naroff Economic Advisors Inc. in suburban Holland, who has no current maritime business ties, said local ports need a major upgrade. Modern terminals designed to provide security and quickly link all transport modes - ship, truck, rail and air - are critical to the economy, he said.

Ocean-borne commerce will double by 2020.

With fuel costs soaring and the dollar weak, modern port facilities would spawn redevelopment of area manufacturing sites. Ships that now deliver cargo and depart empty could offer good rates for exports, Naroff said.

The study to be released today was done by the Economy League for Greater Philadelphia and commissioned by the Philadelphia Industrial Development Corp. The PIDC, a quasi-public agency controlled by the city and the Greater Philadelphia Chamber of Commerce, manages redevelopment of the former Philadelphia Navy Base. It has been skeptical of the need for more port space.

Steve Wray, the league's executive director, said the "fractious relationships among port stakeholders" is causing wasteful "piecemeal planning."

As a result, he said, the region falls way behind other seaports in containerized cargo and has no traffic from Asia, the biggest sources of anticipated growth.

He said the river's 40 terminals and its three state agencies have done a poor job of marketing such strengths as a flexible labor force that offers 19 shift-starting times daily, reducing costly delays.

Wray's study estimates the region's maritime employment at 4,000 jobs and that each of these jobs supports two more in a wide range of fields, including law, accounting, sales, transportation and health care. The total is 12,000 jobs, a third in Philadelphia.

In recent years, maritime interests have hired consultants to offer job-growth estimates to support their case for expansion, including one projecting a tenfold increase in maritime-related jobs.

The estimates have generated skepticism. The realistic answer may be: It all depends.

Reducing fractiousness, Wray said, is the key. In 1988, then-Govs. Bob Casey of Pennsylvania and Tom Kean of New Jersey crafted a cooperation plan, but it got bogged down in turf wars, lawsuits, and patronage-protection battles.

"Quite simply," Wray said, "if the region's ports are to prepare for future growth, stakeholders must work together."