New Route Brings Cargo to Philadelphia via Bigger Panama Canal and 'Panamax' Ships

Philadelphia Regional Port Authority

With the long-awaited $5.4 billion Panama Canal expansion completed and allowing bigger ships to carry more cargo through the waterway, some of those larger vessels are coming to the Port of Philadelphia.

Mediterranean Shipping Co. began a new freight route Aug. 3, hauling fruit and "dry" cargoes such as tires, wood products, wine, sugar, and cocoa beans from Chile and Peru through the canal's new traffic lane, with a stop in Freeport, Bahamas, and then in Philadelphia.

The Philadelphia Regional Port Authority, which owns 15 piers and terminals on the Delaware River, puts the economic impact of MSC's new route at $21.8 million in annual personal income and $5.7 million in state, local, and federal taxes.

RELATED: Dredging makes slow, uneven progress on East Coast to welcome bigger ships

Packer Avenue Marine Terminal in south Philadelphia is the only port of call on the East Coast for the MSC route.

After unloading at Packer, the weekly ships — MSC Sophia Celeste, MSC Agrigento, MSC Brunella and MSC Algeciras — will take exports from the Philadelphia region and the Midwest on to Rotterdam, Netherlands, and Antwerp, Belgium, as well as points in Germany, England, and Portugal before returning to South America.

The "new Panamax" ships, so-named because they fit through the larger set of Panama Canal locks, can bring to Philadelphia nearly twice as many cargo containers — 8,800 to 9,400 20-foot containers — as the original 1914 canal allowed.

Until the canal expansion opened June 26, only ships carrying up to 5,000 containers could traverse the 48-mile waterway that connects the Pacific and Atlantic oceans and is a key conduit for international maritime trade.

In the past, MSC averaged 500 to 700 containers a week coming off in Philadelphia, with about the same going back to the west coast of South America, said Eric Holt of Holt Logistics, whose family runs Packer Avenue Marine Terminal. "Now our hope is that they are going to double that.

"These are the biggest cargo ships to ever come up the Delaware River," Holt said.

The new route will mean direct employment for 103 workers and spin-off benefits for a total of 297, including suppliers and port-related businesses.

Many of the imports arriving via the route — apples, kiwis, limes, lemons, clementines, navel oranges, avocados and mangoes — will remain locally.

To start, 125 to 175 containers will travel weekly by CSX Rail to the Midwest, said Paolo Magnani, USA executive vice president for MSC.

CSX has a rail line adjacent to the Packer Avenue terminal on Columbus Boulevard.

With Philadelphia the only "direct" East Coast port call, Mediterranean Shipping is making Philadelphia a rail "intermodal hub," Holt said.

Demand by shippers to export products from Pennsylvania and neighboring states justified the Philadelphia sailing call, Magnani said, noting that the container shipping line will be "able to service the entire Midwest via the Philadelphia gateway."

Total new volume for the port will be 25,000 containers a year. Exports from Philadelphia will include paper products, clay, resins and metals.

The new Panamax ships have more refrigerated cargo capability, and the Philadelphia port and Packer Avenue Terminal have the refrigerated warehouses and labor expertise to handle perishable cargoes, Magnani said.

Transit time from Philadelphia to Rotterdam is nine days, 10 days to Antwerp — faster than the average 13 days on other cargo lines across the North Atlantic, said Sean Mahoney, the Philadelphia port authority marketing director.

"We had over the years lost our European service eastbound — exports going from Philadelphia to Europe," Mahoney said. "So now we have it back. The transit times are better than on other ships, so that's really attractive for a lot of shippers.

"We have one Mexico avocado shipper interested in bringing Mexican avocados up on the SeaLand service [a direct ocean route from the Gulf of Mexico to Philadelphia] and then transferring to MSC to go to Rotterdam because the speed is faster," Mahoney said.

"We're branding it 'the Philadelphia Express.' It's exciting for us."

With a more active rail hub and quicker trips to Europe, the port is eyeing other markets.

"The Midwest is a spot where we want to build our volumes, going after not just the cargo in our back yard," Mahoney said. "We want to go after the cargo in the Midwest as well."

Since 2010, the state of Pennsylvania and the U.S. Army Corps of Engineers have spent $300 million to deepen the Delaware River's main navigation channel from 40 to 45 feet to prepare for bigger ships. Deepening the river's 103-mile shipping channel is set to be completed at the end of 2017.

"If we didn't have the deepening work that's already been done, and the completion of the work next year, I'm not so sure we would be receiving these vessels," Mahoney said.