Judge Vacates Permits for Construction of New Delaware Container Terminal

 

Plans to develop a massive new container terminal in Wilmington, Delaware that will quadruple the port’s capacity and dramatically increase vessel traffic were put on hold by a U.S. District Judge who vacated the construction permits. Judge Mark Kearney on Monday, October 28, sided with the Port of Philadelphia (PhilaPort) and ruled that the U.S. Army Corp of Engineers had improperly approved permits for dredging and construction of the new terminal.

The competing ports have long been arguing over the plan for Wilmington to dramatically increase its capacity. Delaware officials cited the limited capacity and relatively shallow waters at Wilmington’s current terminal when they launched plans for the new Edgemoor terminal which would be about two miles to the north of the current facility. They are billing Edgemoor as the largest new terminal on the Delaware River since the opening of the Port of Wilmington in 1923.

Diamond State Port Corporation which controls the Port of Wilmington bought in 2017 a former industrial site at the conjunction of the Delaware and Christina Rivers. Its plan was further enhanced when it switched port operators with a new long-term contract with Enstructure which also holds a large adjacent piece of land. The Massachusetts-based company took over the operation of the Port of Wilmington in July 2023 from a U.S. division of Gulftainer.

With an estimated construction cost of $635 million, Edgemoor would have an annual capacity of 1.2 million TEU in addition to the current 400,000 TEU at the Port of Wilmington. The terminal would also be dredged to a 45-foot depth which the operators said would permit a 55 percent increase in vessel traffic as well as handling larger vessels. Delaware has committed $250 million toward the construction of the terminal saying it would be a major contributor to the state’s job market and economy. Enstructure would invest more than $300 million to develop the terminal and the EPA announced earlier this week a further $127 million federal grant to be used at the Port of Wilmington and Edgemoor for eco-friendly equipment.

Approximately 25 miles to the north along the Delaware River, PhilaPort and Holt Logistics Corp. operate larger container terminals in Philadelphia and South Jersey. Philadelphia has ambitious plans to further expand its container port operations, but Edgemoor which would be closer to the Atlantic could be a significant competitor.

The Port of Philadelphia and Gloucester Marine Terminal in New Jersey filed suit against the U.S. Army Corps of Engineers after they announced the granting of permits for the dredging and construction of Edgemoor. They argued that the Army Corps did not follow procedures and did not “engage in reasonable decision-making,” when it granted the permits. They argue the new terminal and a newly created turning basin in the Delaware River would block river traffic and create a safety and navigation hazard. 

Wilmington contends the new terminal would be good for the region attracting more business and investments. Many observers however believe Philadelphia fears Wilmington would draw away volume from the ports especially because of its more convenient position for ships.

Judge Kearney found for Philadelphia ordering the Army Corps to re-evaluate the plan and specifically Philadelphia’s objections. The Army Corp could appeal the court’s decision.

Delaware officials while not named in the suit objected to the decision and its impact. They said this would only delay their efforts and that they would be working closely with the Army Corps to address the concerns and complete the plan for the new terminal.