The Diamond State Port Corporation — the entity overseeing the public-private partnership at the Port of Wilmington — voted last week to allow the Massachusetts-based shipping company Enstructure to take over operations at the Port of Wilmington.
In a resolution adopted at a meeting of the Corporation's board of directors last week, board members cited the failure of the previous operator, the Emirati-owned logistics company Gulftainer, to secure long-term financing for a long-promised shipping terminal at the site of a former DuPont chemical production facility at Edgemoor as the reason for the change.
Gulftainer took over operations at the Port of Wilmington in 2018. At the time, Gov. John Carney's administration heralded the partnership — a 50-year lease to Gulftainer at a cost of at least $3 million a year — as an opportunity to revive the struggling port and to end its reliance on state subsidies.
Gulftainer also agreed to invest over $400 million in the construction of the Edgemoor terminal and to double the port's annual container cargo traffic, with the goal of competing with the Port of Philadelphia — among others on the eastern seaboard — as a shipping hub.
But over the past five years, Gulftainer struggled to make the port profitable, and though the partnership relieved some of the port's debts — and brought more than $80 million in private investment to the port — Gulftainer still relied on some state subsidies to cover operations costs, and the company had made little progress towards breaking ground on the Edgemoor project.
In October 2022, state Rep. Debra Heffernan, a member of the Gulf State Port Corporation's board, also claimed that Gulftainer had failed to make a lease payment for more than a year.
At roughly the same time, Gulftainer's financial woes prompted its creditors to take over the company's board of directors. And in November, the federal Occupational Safety and Health Administration began an investigation into a workplace accident at the port, ultimately fining Gulftainer $300,000 for safety violations.
But at a Diamond State Port Corporation board meeting in early 2023, Gulftainer USA CEO Joe Cruise offered a more optimistic take on the port's prospects, citing increased bulk cargo volumes driven by fruit — particularly Moroccan clementines and Chilean grapes — and construction materials. Cruise also claimed the port brought in roughly $23 million more in 2022 than in the previous year.
In the same meeting, International Longshoreman's Association Vice President William Ashe — also president of the branch of the union at the Port of Wilmington — expressed optimism about the Edgemoor project. "Nobody and nothing will stop us from getting this done," he told the board.
But behind the scenes, the Corporation began searching for alternative port operators in hopes of breathing life into the proposed Edgemoor terminal development.
Enstructure, which already has a limited presence as a port services provider in Wilmington, was one of three bidders for the concession.
The company has signed a project labor agreement with the Delaware Building and Construction Trades Council to provide workers for the Edgemoor project, though the development still requires additional input from the US Army Corps of Engineers — namely concerning the dredging necessary to create a new channel for cargo vessels.
"Enstructure is also looking forward to collaborating with [the Diamond State Port Corporation] on the Edgemoor project, which will expand Wilmington’s presence on the East Coast as a vital port city and deliver significant economic benefits to the State," said Enstructure spokesman Justin May.
Enstructure has also agreed to honor the International Longeshoreman's Association's memorandum of understanding concerning port labor.
The company will likely negotiate changes to the existing lease at the port, and neither Enstructure nor the Corporation have specified the annual cost of the lease.
