Robert C. Blackburn, Senior Deputy Executive Director

FTZ No. 35 • 983 total acres • • 3.6 million sq. ft. warehouse space • 40-ft channel • ICTF

Rail: NS, CSX

Highways: 1-95, I-76

Top export destinations: Turkey, Vietnam, Australia

Top export commodities: Scrap, Machinery, Meat

Robert Blackburn: At the Philadelphia Regional Port Authority, we are happy to report that year-end statistics for 2013 indicate the fourth consecutive year of double digit growth and tonnage handled. Our growth over the past two years has been varied, I should say, and different commodity groups. The first two years it was driven primarily by imported automobiles. We’ve experienced a bump in liquid bulk cargoes handled and in two years the growth has been primarily in container cargo, and that’s both import and export.

We have probably two premier projects that we are pursuing. The biggest economic development project in this region in the past 50 years or so is our channel deepening project. The Philadelphia Regional Port Authority and the Commonwealth of Pennsylvania are working in partnership with the U.S. Army Corps of Engineers to deepen the shipping channel of the Delaware River. It’s about a 90-mile shipping channel. The current depth is 40 feet and we are in the process, about 60 percent complete, of deepening the channel to 45 feet. That should provide for, it will provide for, a deeper draft and ability to handle much bigger vessels, and an increase in the vessel size of approximately 50 percent should open up opportunities for us, both export and import. We anticipate that there will be extensive growth in the container business. That seems to be the business that is growing fastest, not only in the Port of Philadelphia but in the shipping business in general, and we should be able to capitalize from a deepened channel as well as the second huge project that we are working on and that is our Southport Marine Terminal project. We were able to, over the past decade, painstakingly piece together parcels of land and packaged them together and marketed them to the shipping community at a time when most large container ports, like New York, like Norfolk, are capacity challenged for container customers. We have been able to put together 120 acres that we right now have under lease to Delaware River Stevedores, which is a local company but is jointly owned by Stevedoring Services of America and Ports America, which are two very large, very international terminal operating stevedoring companies, and they’re the parent company for DRS. They are committed, and we are in the final stages of working out the details where they will invest private capital in developing the 120-acre Southport Marine Terminal, so they are very, very excited about that. There is also some other land that we have been able to acquire that we’re going to be utilizing, hopefully in the very short term, for some other opportunities.

We’re not, as I said, a huge container port, but I think last year we did over 333,000 TEUs. That was a 32 percent increase over 2012, so we’ve got robust growth in the container business. Our historic strength has been handling break-bulk cargoes like forest products, fruit cargoes, steel, things like that. We’ve done good business with the automobiles, with RO/RO and, as I said, liquid bulk. So we’re a diversified port, growing in several areas. Our strongest growth area, because of the way the industry is going, in a way that will affect the export market in a more positive way relative to Philadelphia, is in the container business.

Global Trade: You said you’ve grown in each of the last four years. Is there anything the port has done to drive that or is that really just things that are going on in the industries that are supporting the port with their shipments?

Robert Blackburn: Well, we continually invest in our facilities. In, I think, 2007, could be 2008, we completed a strategic facilities assessment where we identified where our capital investments should be made. We are just getting to the end of that program where we invested money in our facilities in conjunction with our terminal operators to maximize our ability to handle cargoes and increase our tonnage volumes. We’ve been fortunate to form partnerships with folks. For instance, the automobile business was a public/private partnership, but we were able to attract some private investment to help us modernize our automobile-handling facilities and that resulted in the Hyundai and Kia business coming to Philadelphia from both Baltimore and north New Jersey. They closed down their operations in both those ports and consolidated in Philadelphia. In 2010, we went from zero cars annually to over 150,000 cars a year. That was a very, very big shot in the arm, especially coming out of the Great Recession, as it was.

That’s the idea that we are pursuing as we move forward with Southport as well. We’ve made some initial investments in public dollars but the point of the whole exercise is to attract private investment, to use a little bit of public dollars to attract a much larger private investment and develop our terminals that way and that’s what we’re doing. The liquid bulk business that we got is the same thing. We invested about a million dollars in our port facility. The terminal operator who handles the liquid bulk, Kinder Morgan, invested about $5 million in the facility and together we were able to double our tonnage in the course of one year. You know, we’re not the most affluent port on the East Coast. Certainly all state governments have been struggling since the recession and we as an independent authority of the Commonwealth of Pennsylvania are not alone in our struggle for funding. We needed to be aggressive and creative and look for opportunities where we can attract partners with private resources, and we’ve had a modicum of success in that regard over the past few years. We will continue to look for that moving forward.