Full Speed Ahead

Major renovations at the Port of Wilmington herald an increase in jobs and other economic benefits

When Chiquita’s weekly ship arrives at the Port of Wilmington, it takes two-and-a-half days of round-the-clock work to unload hundreds of thousands of bananas. That’s down from the three full days that was common before an experienced company called Gulftainer took over port operations last year.

“Anything shaved is saved,” says Michael Phillips, manager of warehouse operations and a 19-year veteran of the port. Workers have increased the speed that they can move massive containers off ships from 13 to 14 an hour to 18 to 19, thanks to both increased technology and increased motivation.

“We want to show the best value for the state and for the people of Delaware,” says Eric Casey, CEO of GTA USA Wilmington, a unit of Gulftainer, the world’s largest privately-owned independent ports and logistics company. Those values—such as more jobs, more allied firms setting up nearby and more taxes from both—will come from generating the best values for shippers.

A few more numbers help define the impressive potential of the Port of Wilmington: more than 20 inquiries from businesses wanting to move nearby; more than $670 million in investments; just a 36-minute average for loading trucks, and a 37 percent improvement in unloading and loading ships.

They’re all indicators from a new era for the facility, built by the city in 1922, turned over to the state in 1995 and, since Oct. 3 of last year, run by GTA USA Wilmington.

“The challenge and opportunity is basically creating a startup while doing a complete refurbishing of the port and while conducting a 24/7 business,” Casey says. “We’re improving service times while adding complexities. We’re coming in, rolling up our sleeves and making a great trajectory.”

Delaware officials decided in 2016 they didn’t want to invest tax dollars in the port but concluded it would be attractive as a commercial lease for “an investor willing to share risk,” says Jeffrey Bullock, who as secretary of state is the chairman of the Diamond State Port Corp., which owns the port.

The port has several advantages, Bullock says. It’s within a day’s drive of a third of America’s population, and as the first full-service deepwater port on the Delaware for ships coming from the Atlantic, it’s quicker to reach than its upriver competitors, who are also investing in improved services.

It has “a workforce recognized as one of the best in the country,” he adds.

According to the port website, it’s also the top North American port for imports of fresh fruit into the United States, and it has the country’s largest dockside cold storage facility. 

Loading and unloading procedures have been streamlined since Gulftainer took over port operations in 2018. Photo by Justin Heyes

Revenue, Income, Taxes and Jobs

Gulftainer has a 50-year agreement to manage and operate the 308-acre port and to develop an adjacent 115-acre site. That Edge Moor site, used by the DuPont Co. and Chemours for decades to make pigments, is planned as a container facility. Containers are one of shipping’s great innovations; they can be efficiently stacked and handled by the standardized equipment. A standard container, called a Twenty-foot Equivalent Unit, is 20 feet long, 8 feet high and 8 feet wide.

According to its website, the port is a “major asset and economic engine of the state,” annually producing $436 million in business revenue, $409 million in personal income and $41 million in taxes.

Diamond State figures the port in 2017 supported 2,951 direct jobs, plus 2,439 indirect and induced jobs. Casey declined to project employment numbers, but says “there are more jobs than before.”

Even more jobs could come from those 20 inquiries. That’s how many companies—so far—have approached Gulftainer about establishing new warehousing and logistics lines nearby to handle port shipments. Although none has been announced yet, every new operation means new jobs.

Gulftainer was established in 1976 in Sharjah, part of the United Arab Emirates. When Gulftainer’s lease was approved in 2018, CEO Peter Richards noted the company had been vetted after a nine-month screening by seven federal Cabinet departments and a dozen federal agencies.

Two key unions—the AFL-CIO and the International Longshoremen’s Association—“vetted the company” as well, Casey says, for “the right approach on safety, collaboration, growth and potential.”

The growth is occurring throughout the port. Gulftainer’s investment was called a $570 million, nine-year package when its lease was voted on, but Casey predicted in an interview that the figure will top $670 million.

“Retraining of workers started on Day 1,” he says, adding that Gulftainer is committed to port employees. “If you came in as a forklift operator, you still have a job as a forklift operator.”

Gulftainer’s lease guarantees that the number of ILA jobs does not fall below the 2017 figures of about 1,500 for the union’s two locals, according to Diamond State.

Training includes digital tracking by tablets that replaces paperwork, with barcodes on buildings and cargo to support the complex, just-in-time choreography that assures everything is where it should be.

“There are many small changes and some large changes,” says Kathryn Bradley, Gulftainer’s marketing manager. In February, Gulftainer began work on $100 million in improvements to the port for 2019, including warehouse roofs and extensions to the dock and crane rail systems. That work will allow the amount of cargo going through the port to grow from 350,000 Twenty-foot Equivalent Units to 600,000 TEUs. The capacity for TEUs will double once Edge Moor is operational.

David Norbut is assistant Stevedore Operations manager at the port, which handled 5.2 million short tons of cargo last year. Photo by Justin Heyes

Sugar, Oil, Turbines and Livestock

The port’s website lists 372 vessels using the port in 2018, with 5.2 million short tons of cargo, about half in those standard-sized containers. Its portfolio also includes dry bulk, such as sand and sugar; liquid bulk, such as petroleum; fresh fruit and juice concentrates; vehicles; breakbulk, such as steel and lumber; wind turbines; and project cargo, meaning large, heavy, expensive or critical equipment; and livestock.

Part of the port’s new-found efficiency comes from rethinking operations on the site, a jumble of buildings and paving that dates back to 1923. One early move was to reorganize empty containers in storage yards so they’re grouped by the country they’ll return to, Phillips says. Another is keeping workers informed. “Gulftainer is very, very transparent about its infrastructure plans and its vision,” he says.

And the efficiency also comes from recognizing how growth will benefit workers and will trickle down to the community. “We’re motivated,” says Austin Wooley, stevedore operations manager. “More jobs, more hours, more money.”

By the fall of 2020, Gulftainer plans on two more warehouses, a new road for trucks carrying bulk shipments and a new entry gate system that will improve efficiency—and the port’s reviews on Google. Those 59 reviews average 2.2 out of five stars, with a lot of grumbling about security guards and traffic flow.

On other hand, the 26 reviews on Indeed.com, a site for job hunters, average 3.8 out of five stars for working conditions, often citing a fast pace, supportive management and opportunities for advancement.

Gulftainer is coordinating with the state on criteria for a training academy. “Ultimately, we want to set up a center for excellence in logistics to train workers throughout the East Coast,” Casey says.

Momentum Logistics, a sister company to Gulftainer, is getting the necessary government approvals and insurance to offer trucking services, he adds.

And by the end of 2021, once permitting is in place, Gulftainer hopes to start developing the Edge Moor site. Gulftainer will pay for the initial dredging needed to access Edge Moor, Bullock says.

The state is looking at road access, to minimize the impact by trucks on secondary roads and to consider low underpasses that prevent double-stacked cars from leaving the port. The interstate is just 400 meters from the port gates.

Conflicts In D.C., Competition Upriver

And plans beyond that? “Anything more than five years is daunting,” Casey says. “The political climate can change.”

“Trade wars ebb and flow,” Bullock says of the current political climate. “Right now there is a lot of rhetoric. It will subside at the end of the day because so much of our economy relies on global trade. We don’t get a lot of business from China,” but tariffs concern him because, he says, they’re “short-sighted.”

The changes at the Port of Wilmington come at the same time as major upgrades at competitors upriver. “The marketplace drives investment,” says Dennis Rochford, president of the Maritime Exchange for the Delaware River and Bay, “and the channel deepening provides a catalyst.”

Dredging of the Delaware, from 40 feet to 45 feet up to Philadelphia, began in 2010 and is expected to be complete this year, he says. In that time frame, Pennsylvania approved $300 million in upgrades to the Packer Avenue, Southport and Tioga ports, and a port opened in Paulsboro, New Jersey.

“We’re staying competitive,” Rochford says, referring to other East Coast ports and noting that traffic on the Delaware hit 2,375 vessels in 2018 and is expected to reach 2,400 this year. That said, steel tariffs imposed in 2018 cut that traffic. “Global trade will continue to grow,” he predicts.

Bullock is pleased by both the finances and the progress at the Port of Wilmington. Gulftainer is paying the state $6 million a year (a figure that goes up over the course of the contract and could go up more with increased volume), and the state isn’t paying that $300 million it had calculated that it would need to spend over 20 years for maintenance. “We’ve already saved $30 million,” he says, referring to what the state would have spent on maintenance in the two years since it sought an outside operator.

“Things have gone extremely well for employees on the docks and office workers in the warehouses that are part of the larger port family,” Bullock says. “It’s been a surprisingly smooth transition, and they’re ahead of schedule. It speaks well of the people of Gulftainer and the ILA. Everyone has remained flexible. Our customers have only seen an upside in quality. We haven’t skipped a beat.”

An aerial photo of the Port of Wilmington gives a sense of its huge expanse. Photo by Joe del Tufo

Riverfront Development—A Timeline

Wilmington has always benefited from its riverfront site, and its economy has grown with the port

1913: Wilmington residents vote to build a deepwater port on the Delaware River to support local companies that make ships, railroad cars and carriages.

1923: The port opens. Early shipments include lumber, wood pulp, quebracho logs, cork, jute, burlap, lead, ore, fertilizer and petroleum products.

1937: The Christina channel is deepened from 30 to 37 feet and widened from 450 to 650 feet. The channel to the port today is 38 feet deep, Gulftainer says.

1972: Del Monte makes Wilmington its principal North American port for bananas and pineapples. Other fruitful landmarks are set in 1987, when Dole and Chiquita begin their first weekly shipments. Today, it’s North America’s top banana port and the nation’s leading gateway for fresh fruit and juice concentrates, handled through an 800,000-square-foot refrigerated warehouse complex.

1976: Volkswagen picks the port as its import hub. Auto shipments are “robust” today, says Eric Casey, CEO of GTA USA Wilmington.

1984: 615 acres in the area are designated Delaware’s first Foreign Trade Zone. Imports stored in the zone are not subject to duty or quotas until entered into Customs territory.

1995: The city sells the port to the state, which creates the Diamond State Port Corp. to manage it.

1997: The port becomes America’s first seaport to roll out the Transportation Worker Identification Credential (TWIC) card. This federal security system was a big concern among workers when the Gulftainer proposal was announced in 2018, but it is not affected by Gulftainer taking over port management, Casey says.

Early 2010s: The state considers a privatization plan for the port, and the International Longshoremen’s Association suggests building a new port below the Delaware Memorial Bridge. Neither proposal advances.

2016: The state receives a “very revealing” strategic plan, says Jeffrey Bullock, who as secretary of state leads Diamond State Port Corp. “We were successful, but we realized we would have to invest $300 million in it. Not for significant growth, not for new customers, but just to maintain operations.” So state officials start looking for outside operators.

2016: State officials decide to pay $10 million for 115 adjacent acres for potential port expansion. Chemours used the Edge Moor site to make titanium dioxide. “It was very attractive because it was close to the dredged channel and right on the I-495 interchange,” Bullock says of Edge Moor.

2017: The offer to run the port draws 92 preliminary inquiries, 21 parties signing confidentiality agreements, 10 submissions and three proposals on the shortlist.

2018: Diamond State and General Assembly approve the 50-year lease with Gulftainer.

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