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Port of Wilmington:  A gateway to Delaware’s economic development

It’s mid-morning on a sunny but chilly morning at the Port of Wilmington.

Workers in hardhats swarm the docks.

Forklift operators maneuver their palettes and crates with the precision of racecar drivers.

The shipment: Chilean winter fruit, carried thousands of miles aboard the m/v Atlantic Klipper.

The scene is fairly typical for late winter and early spring at the port. Its relationship with large fruit companies like Dole and Chiquita is well-known. However, a wide variety of national and local businesses also utilize the port. Shipments of automobiles routinely make their way along the Christina River to the Delaware, south to the Delaware Bay and onward to international destinations. Steel and construction materials make their way through the port as well. GM vehicles come through the port on their way to the Middle East, while a strong market for second-hand vehicles connects the port to West Africa. Pregnant Holstein heifers are sent from the Port of Wilmington to such locations as Turkey, Russia and Egypt.

The Port of Wilmington, when evaluated in detail and observed at length, can truly serve as a window to the national and world economies.

Dole Fresh Fruit Company maintains facilities at five North American ports, including Wilmington, as well as one in San Juan, Puerto Rico. The company’s Vice President of North American Operations, Stuart Jablon, said its Wilmington operation is more than double the size of its others on the continent.

“It’s a great access point to the major demographic area, population area of the United States: the northeast,” Jablon said. From Wilmington, Dole is able to have its products distributed as far north as Canada, as far west as Chicago, and as far south as the Carolinas.

Additionally, Dole maintains a third-party cargo business, selling space on its vessels for non-Dole related business. Materials such as used computers for schools and tires for farm tractors are transported to Central and South America using Dole ships.

Like any business, Dole keeps its options open and looks for the competitive edge. However, Jablon said Wilmington’s facilities and what he called a “great labor force” have made Dole a returning customer.

Jablon cited the dedication port workers showed during some of the heavy snowstorms during the past few winters. Several of the storms fell on weekends, and workers nonetheless showed up and processed Dole’s shipments on time.

“There’s a dedication there. There’s loyalty and commitment there to making Dole successful here,” Jablon said.

The labor force, the facilities, and those top three considerations of real estate – “location, location, location,” – have helped the Port of Wilmington survive national and worldwide economic downturns. In 2011, the port handled more than five-million tons of cargo (5,084,478), a 26-percent increase from the previous year and the most since the Diamond State Port Corporation was formed in 1995 to run the port after it was acquired by the state.

DSPC Executive Director Eugene Bailey details the state of the Port of Wilmington and its economic impact.

DSPC Executive Director Eugene Bailey details the state of the Port of Wilmington and its economic impact.

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Port of Wilmington:  A gateway to Delaware’s economic development

DSPC Executive Director Eugene Bailey said the port is directly or indirectly responsible for about 5,000 jobs and generates $28- to $30-million annually in tax revenue for the state.

“One of the things we pride ourselves in is the personal service that we provide to our customers, and the logistical support that we give our customers as well,” Bailey said.

Maritime Exchange for the Delaware River and Bay President Dennis Rochford – a board member of Delaware First Media – said the port’s easy access to interstate highways and railroads help to make Wilmington the busiest port in the region in terms of cargo.

Philadelphia, south Jersey and Chester, Pennsylvania also have busy ports, but Wilmington is closer to the Delaware Bay and to the Chesapeake-and-Delaware Canal, which made it the port of choice for international companies like Dole and Chiquita. They run on a busy “winter fruit season.” During our winter in the northern hemisphere, summer harvesting is at its peak for Chilean grapes and products like bananas and kiwi.

“This is a very competitive environment that we’re in, especially on the Delaware River,” DSPC Deputy Executive Director Tom Keefer said. “Customers do have options.”

DSPC Deputy Executive Director Tom Keefer outlines the variety of commodities that move through the Port of Wilmington.

DSPC Deputy Executive Director Tom Keefer outlines the variety of commodities that move through the Port of Wilmington.

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Port of Wilmington:  A gateway to Delaware’s economic development

Keefer added that it’s an ongoing priority to address customers’ concerns and make decisions quickly. “We are known as a port of personal service,” Keefer said.

Magellan Midstream Partners sees Wilmington’s port as a vital part of its network of terminals and thousands of miles of pipeline that carry refined petroleum products such as gasoline and home heating oil. Magellan’s terminal at Wilmington loads and offloads tankers and barges.

“This enables our customers that market on the East Coast to obtain product from literally anywhere in the world,” Magellan Spokesman Bruce Heine said, adding that the company enjoys a “positive working relationship” with the Port of Wilmington.

Magellan also maintains a port facility in New Haven, Connecticut. The Port of Wilmington and the Diamond State Port Corporation are working to keep existing customers like Magellan and Dole satisfied, while working within current limitations to lure more customers.

As a state-run entity, Keefer said the port is also impacted by limitations on the amount of capital funding it receives each year. “It’s an aging facility,” Keefer said. “The state has been a great owner and provided us with significant capital dollars over the years. It’s something that requires continuing investment because it’s a great economic engine for the state.”

Keefer added that meeting the expectations of customers sometimes requires a significant capital investment into a new warehouse, or a new crane. He also welcomes the dredging of the Delaware River to create a 45-foot shipping channel.

“There are ships coming up the river now that are carrying reduced loads,” Keefer said.

President Obama’s budget for Fiscal Year 2013 includes an additional $31-million for continued deepening of the channel. That is in addition to more than $16.8-million allocated by the U.S. Army Corps of Engineers to deepen a 15-mile portion of the Delaware River between Penns Landing, Philadelphia and Essington in Delaware County.

Expansion of the Panama Canal is expected to send more vessels – larger vessels – to ports around the world, including those along the Delaware River.

The state’s congressional delegation believes now is the time to make investments into the maritime industry and the job opportunities it offers. “At a time when the economy is still recovering, at a time when we have a President and a Governor who say that import and export trade and connectiveness to the global economy matter more than anything else, we have in Delaware the Port of Wilmington, a port that works, a port that is growing and a port that I think has a bright and solid future,” U.S. Senator Chris Coons (D-Del.) said at a recent luncheon of the Port of Wilmington Maritime Society.

According to Bailey, the port is looking for a commercial partner to expand operations to the Delaware River side of the port property.  Currently, ships dock along the Christina River for loading and unloading. “Considering the funding requirements to go to the river and expand our facility, we will need a partner in order to be able to do that. That’s what we’re exploring right now,” Bailey said.

The cost of moving to the Delaware River is estimated at half-a-billion dollars.

“I think if we find the right partner, we will double the capacity of the Port of Wilmington, which will increase the jobs, which will increase the tonnage coming in, and I think will create a great opportunity for Delaware,” Delaware Economic Development Office Secretary Alan Levin said. He also stressed that in no way would pursuing a private sector partner indicate that the state is interested in selling the port.

“It’s too valuable of an asset to sell,” Levin said. “What we’re looking at is a joint venture, a lease of a portion of the port to another company, to help us.”

State Senator Robert Marshall discusses developing a public-private partnership at the Port and its impact on jobs.

State Senator Robert Marshall discusses developing a public-private partnership at the Port and its impact on jobs.

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Port of Wilmington:  A gateway to Delaware’s economic development

State lawmakers want some oversight concerning any sort of agreement, to make sure it is in the best interest of the port but also its workforce. State Senator Robert Marshall (D-Wilmington) recently chaired a Labor Committee hearing on the proposal.

“Workers today, especially unions, are concerned about benefits being preserved, pensions being preserved,” Marshall said, adding that he would seek information about other port transactions around the country to see if they have led to non-union hiring or cuts in workers’ benefits. “We need a clear understanding and a definition of a public-private partnership and how it would impact the future of the port, workers, and the unions—and also the businesses outside the fence of the port because they’re significant in terms of the people they hire.”

Preservation of blue collar jobs will be Marshall’s priority as these negotiations continue.  “The jobs here pay well on an hourly basis, they have benefits, there are pensions available and any consideration of a new use of the port needs to protect, enhance and guarantee that we grow the blue collar jobs here,” Marshall said.

Local union leaders, meanwhile, are concerned about what the future may bring.  Several large blue-collar employers in Delaware have closed in recent years, and while jobs have come back under new ownership, the numbers of jobs attached have not been nearly as large.

“The port is the one place that gives people second chances,” Longshoremen’s union president Julius Cephas said. “With GM, and Chrysler, and the refinery… what’s next?”