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Summary for August 16 - August 20, 2010:
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Monday, August 16, 2010

Top Story

India could overtake China as fastest growing economy

India may overtake China as the world’s fastest growing major economy by 2015, as the South Asian nation doubles infrastructure investment and adds six-fold more workers than its northern neighbor, Morgan Stanley said.

India’s growth may accelerate to 9.5 percent between 2011 to 2015, Morgan Stanley economist Chetan Ahya said in an interview from Singapore. India’s gross domestic product has expanded at an average 7.1 percent over the decade through the third quarter of 2009, compared with 9.1 percent in China, which surpassed Japan as the second-largest economy last quarter.

Prime Minister Manmohan Singh’s government plans to double spending on roads, ports and power plants to $1 trillion in the five years to 2017 to improve the quality of infrastructure that’s ranked below war-ravaged Ivory Coast and Sri Lanka. An increasing number of people joining the workforce and rising salaries will also help boost growth, Ahya said.


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Southern Cal’s Peak Season could be “melting away”

Southern California's twin ports enjoyed another burst of cargo traffic in July, but economists are concerned that the freight flurry won't last as consumers take a vacation from spending and retailers trim orders to match reduced expectations.

July is usually the opening month of the busiest cargo shipping season of the year, when retailers begin to receive goods that they hope to sell during the end-of-the-year holidays. Import numbers tend to climb steadily through October, the month when cargo usually peaks at the ports of Los Angeles and Long Beach. But perhaps not this year.

"The traditional peak season may be melting away," said Ben Hackett, founder of Hacker Associates, which monitors cargo volumes at the busiest seaports in North America on behalf of the National Retail Federation.

The good news is that international trade will finish the year far ahead of the numbers recorded last year, when global cargo container traffic fell for the first time in at least half a century, according to AXS Alphaliner, which tracks the maritime industry from its headquarters in Paris.

The bad news for the ports of Los Angeles and Long Beach — part of a supply-chain infrastructure that employs dockworkers, truck drivers, railroad employees, warehouse and distribution center staffs and logistics experts — the big bump in holiday-season cargo jobs may not come this year.

Consumers remain very cautious about the safety of their own jobs, and retailers are paying attention to those signals, experts said.

-L.A. Times

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Report: Air freight market expected to soften

The air freight forwarding sector has been warned the resurgence of demand since Q4 2009 can't be relied on to continue as it is at least partially attributable to firms correcting inventory levels.

This overspilled to the first half of 2010, where double-digit industry growth continued to fuel inventory re-stocking, according to Transport Intelligence (Ti).

Ti's says the air freight forwarding industry grew year-on-year by 38 percent during the first half of 2010, while ocean forwarding grew by 13 per cent.

Ti analyst John Manners-Bell said Ti expected volumes to moderate in the next six months, followed by a period of lower growth.

Some air and sea forwarding markets - most notably Europe - will not return to 2008 pre-recession levels until after 2013, he added.

-Aircargo Asia-Pacific

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CMA CGM takes delivery of third mega-ship

French shipping group CMA CGM delivery of the 13,830-TEU Corte Real built by South Korea’s Daewoo Shipbuilding and Marine Engineering. The mega-ship is the third of a series of such eight vessels named after great explorers.

The latest containership will join the CMA CGM’s Christophe Columb and Amerigo Vespucci on the FAL5 service (French Asia Line) that links Asia and North Europe.

The FAL5 service was launched in early July and CMA CGM reported it now offers 14 services between Asia and Europe.

“These large capacity vessels allow the CMA CGM Group to meet the growing volumes on this market that has been showing a strong recovery over the last months,” the company said in a statement.

The Corte Real begins its rotation on August 17 in Ningbo before calling Shanghai, Yantian, Tanjung Pelepas, Port Klang, Le Havre, Hamburg, Rotterdam, Zeebrugge, Port Klang and Singapore, the company said.

Oregon farmer ships to market on his own railroad

An Oregon farmer is shipping trainloads of his wheat on his own railroad.

Larry Venell said it's much more efficient to ship his grain from his family's farm south of Corvallis to the Port of Portland than having it trucked.

Venell told the Gazette-Times that grain elevator truck bays can become chokepoints, creating a backlog for growers.

The Venells spent almost $1 million in 1996 to build a covered loading facility, but the family hasn’t been able to use it since June 2007.

That's because the Portland & Western Railroad halted service on a branch line running through the family's property.

Now the trains are running to the property again — and this time it's Venell who's calling the shots as manager of a 5.3-mile railroad linking his farm to the branch line.

The 2007 shutdown was a turning point for rail customers on the Bailey Branch, a 23-mile freight line running south from Corvallis to Monroe and west to Dawson.

Following the shutdown, a coalition of shippers sued the railroad, its parent company and Union Pacific, which owned the tracks and was leasing them out.

Union Pacific indicated a willingness to sell the line, prompting the lawsuit to be dropped. Negotiations, however, stalled and the shippers walked away one by one. The sole exception was Venell, who was among the closest to the P&W terminus in Corvallis.

It took Venell more than two years to close the deal. On Aug. 6, after a $750,000 repair project was completed, the Venell Farms Railroad Co. shipped its first load of wheat to Portland.

Venell's partner in the venture is the Albany & Eastern, a Lebanon-based shortline operator. The company supplies the crews and engines to haul rail cars to and from the farm, handing them off at the Western Boulevard switching yard.

Venell, who won't say how much he paid for his five miles of track, also is starting to rebuild his livestock feed business, which faltered when he lost rail access three years ago. He also provides freight service to some of his neighbors.

-Cattle Network

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Tuesday, August 17, 2010

Top Story

China’s import fade impacting other countries

China's abrupt growth slowdown is sending a chill through Asian economies and as far away as Australia and Africa as its voracious demand for imports fades. Beijing is cooling its economy with lending and investment curbs after explosive 11.9 percent first-quarter growth fed fears of overheating.

WHY IT MATTERS: The slower growth is cutting demand for American and European factory machinery, industrial components from Asia and iron ore and other raw materials from Australia and Africa.

THE BACKDROP: China is a major market for Asian nations. It buys 28 percent of Taiwan's exports, 25 percent of South Korea's and more than 20 percent of mining giant Australia's. More than half of Hong Kong's exports go to the mainland.


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Virginia alliance pushes for freight rail expansion

Business, labor and environmental representatives assembled in downtown Roanoke today to call for Congressional approval of proposed tax credits designed to encourage the expansion of freight railroads.

A group calling itself the BlueGreen Alliance – representing labor and environmental interests – said it endorses a tax credit for rail capital investments like that embodied in H.R. 1806. Introduced in 2009, the Freight Rail Infrastructure Capacity Expansion Act of 2009, which was referred to the House Ways and Means Committee.

Those present included representatives from the Virginia chapter of the Sierra Club, Roanoke Regional Chamber of Commerce, Norfolk Southern Corp., the Sheet Metal Workers' International Association and Go21, a railroad-backed advocacy group.

The BlueGreen Alliance and Economic Policy Institute released a report saying each $1 billion in additional spending on freight rail capacity will create 7,800 jobs.

-Roanoke Times

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Brazil’s biggest box terminal operator considers raising funds for expansion

Santos Brasil Participacoes, Brazil’s largest shipping container [terminal] operator, may issue bonds or sell shares to finance the company’s expansion, Chief Executive Officer Antonio Carlos Sepulveda said.

The company may sell bonds or borrow from the national development bank, known as BNDES, to participate in the bidding to build a container terminal at the port of Manaus. Bidding is expected for early 2011, Ports Minister Pedro Brito said in a July 21 interview.

Expanding the Porto de Santos, the main port in Brazil, falls into that category, he said. The project requires about 2 billion reais of investment, the executive said. If the expansion is approved, Santos Brasil is studying whether to participate in the bidding to construct a new terminal, which would double the company’s annual capacity of containers moved to almost 3 million, Sepulveda said.


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NOL finalizes deal to build 10,700-TEU ships

The Singapore-based shipping and logistics company NOL Group announced it finalized a deal that makes it official that the company will build two new 10,700-TEU containerships that are scheduled for delivery in 2012.

The two vessels are part of a 12-ship order valued at $1.2 billion, and will be built by Daewoo Shipbuilding & Marine Engineering Co, NOL said in a statement.

The shipping group said it is investing in new vessels “to meet future growth needs and to replace vessels with charter agreements that will expire in the next few years.”

USDA revokes Hawaii-PNW trash-shipping permit

A long drawn out drama over shipping garbage to the Pacific Northwest just took another turn.

Acting Mayor Kirk Caldwell said he was notified that the U.S. Department of Agriculture has withdrawn the shipping permit that Hawaiian Waste Systems needs to transport some 20,000 tons of garbage.

City lawyers are negotiating with attorneys for Hawaiian Waste Systems over how to end the contract.

The USDA had suspended the permit to ship the garbage following concerns by the Yakama nation over the year-old garbage.

The Indian tribe owns land around the landfill and raised concerns about invasive species that the trash may bring.

A federal judge issued a temporary restraining order effectively blocking the first shipment and set a date for a hearing at the end of the August.

The city said the USDA decided to withdraw the permit on Friday.

-KITV (Honolulu)

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Wednesday, August 18, 2010

Top Story

A.P. Moeller-Maersk raises earnings forecast

A.P. Moeller-Maersk A/S, the owner of the world's largest container-shipping line, raised its full- year earnings forecast after increases in freight rates and global trade helped the company restore first-half profit.

Net income in the first six months of the year was 13.4 billion kroner ($2.31 billion) compared with a 3.67 billion- krone loss a year earlier, the Copenhagen-based company said today in a statement. That beat the 8.22 billion-kroner average estimate of four analysts surveyed by Bloomberg. Sales rose 20 percent to 154 billion kroner.

Maersk is recovering from its first annual loss in at least half a century after the shipping market contracted in 2009 for the first time since containers became the world's standard means of carrying freight in the 1970s. Maersk said today that net income before minority interests in 2010 will exceed $4 billion, compared with a forecast last month of profit above $3.5 billion.


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Portland closes container terminal lease deal with private operator

On the heels of unanimous approval from its commission in May, the Port of Portland announced it officially closed the deal on a 25-year lease of its container and breakbulk facilities at Terminal 6 to ICTSI Oregon, a subsidiary of International Container Terminal Services Inc., headquartered in the Philippines.

Under the terms of the agreement, ICTSI Oregon is obligated to pay the port $8 million upon closing and make annual rent payments of $4.5 million, the port said in an email to Cargo Business News.

As terminal volumes increase over time, ICTSI Oregon will pay Portland additional incremental revenue per container moved, the port said.

The port's only container terminal facility is expected to be operational under the new ICTSI team early next year.

DP World posts higher first half profits

Global port operator DP World posted higher first-half profits Wednesday, helped by a pickup in world trade that pushed cargo volumes at ports it controls up 7 percent.

The company, part of struggling state conglomerate Dubai World, reported first-half earnings of $219.2 million, up from $187.7 million during the same period a year earlier. Earnings from continuing businesses were $206.5 million.

DP World benefited from a 7 percent increase in cargo volume at marine terminals it owns or has operational control of — a sign that shipping container traffic is starting to rise following a severe slump caused by the global economic downturn.

It expects business to improve further in the second half of the year, reflecting higher seasonal demand, such as companies stocking up on holiday inventories. But executives cautioned that it is too early to say whether the rebound can last.

-Canadian Business/AP

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Charleston's box volumes rebound; port's chief says future uncertain

Container volume at the Port of Charleston has rebounded to where it was almost two years ago, but the head of the South Carolina State Ports Authority warns the future remains uncertain.

The authority board learned Tuesday that almost 74,000 shipping containers were handled by the port during July, the best month since October of 2008. The number was also a 26 percent increase over July of last year.

But Jim Newsome, president and CEO of the authority, says the coming months are still uncertain and doesn't expect to see such sharp increases in month-to-month business.

Newsome said it appears that shipments from Asia - many of them consumer goods for the holidays - came early this year. Generally, those shipments come in late summer and the fall.


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-Press TV

UN says Pakistan flooding relief fraught with logistical challengesn

The United Nations says many of the 20 million people affected by floods in Pakistan have not received aid because of enormous logistical challenges posed by devastated infrastructures in the country.

“We're putting the final pieces in place on a distribution system which can reach the huge number of people in need in the shortest possible time," said Wolfgang Herbinger, the country director of the UN World Food Program in Pakistan.

“It's a huge challenge, particularly in Sindh [province], where the delivery infrastructure is most constrained," UN News Center quoted Herbinger as saying on Tuesday.

The UN is asking donors countries around the world to send urgent aid to the victims of the flood in Pakistan.

Iran has committed over 400 tones of relief goods, and $1 million in donation, some 180 tones have already been delivered by Iranian transport aircrafts. These goods include tents, floorings, clothes, canned food, bread, and medical supplies.

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Thursday, August 19, 2010

Vancouver, B.C. port to impose “Gateway Infrastructure Fee”

By contributing editor for Canada, Fred McCague

Port Metro Vancouver will impose a new “Gateway Infrastructure Fee” beginning January 1, 2011 to pay for a large number of projects designed to improve access to the port's terminals.

The fee will recover $167 million (Canadian) that the port is investing over the next 30 years. The port claims this investment leverages investments by the provincial, federal and local governments at a rate of $3 for every $1 the port invests permitting total investment in 17 projects for a total of $717 million by governments and the port.

Over half of the projects are off port property, mainly investments in railway/road grade separation projects up to 30 miles away from port terminals.

A backgrounder issued by the port states the fee will be imposed on cargo movements with a projected initial rate of 3 cents per ton or 30 cents per TEU at Roberts Bank (Deltaport/Westshore Terminals) and 5 cents per ton or 50 cents per-TEU in Burrard Inlet, the port's inner harbor with the rates tripling by 2015.

The fee is expected to remain n place for 30 years. There has been no indication of any charges for domestic cargo, except for one cement terminal, or cargo through Fraser River terminals. The rates will be finalized by October.

During an industry consultation process, some port users were concerned about the precedent set for contributing to offsite costs by the port as well including earlier commitments in the fee such as a $50 million port contribution for offsite rail/road work in that governments leveraged out of the port in 2007, but now being spent, prior to work beginning on the recently completed Deltaport expansion program.

Others urged the profitable port to use some of its annual profits for these expenses, an idea the port initially rejected, but has since slightly softened by agreeing to absorb up to 10 percent of the costs. Others were concerned that the port would want to add more offsite projects into the fee. This concern has been heightened by the appearance of Port Metro Vancouver's name on a billboard as one of the contributors to a new freeway interchange being built on Highway 91 in Richmond, BC, a project that is not one of the 17 projects covered by the fee.

“Critical choke point” removed from Crescent Corridor project

A “critical choke point” on Norfolk Southern's over $2 billion Crescent Corridor freight infrastructure project has been removed thanks to a reconfigured rail junction near Front Royal, Virginia, the railroad and the state’s Department of Rail and Public Transportation (DRPT) announced.

The Front Royal project was the final and reportedly most complex of six capacity improvement projects in Northern Virginia to handle more trains at higher speeds.

Funded by $43 million from the DRPT and nearly $20 million from Norfolk Southern, the projects lengthened or built new passing tracks between Manassas, Virginia, and Front Royal; installed five miles of double track near the Virginia Inland Port; improved signal and traffic control systems; and increased train speeds through Riverton Junction near Front Royal.

"The completion of these I-81 corridor improvements will benefit both freight and passenger rail service in Virginia," said DRPT Director Thelma Drake.

"With these improvements, we can move more trains faster through Northern Virginia," said John Friedmann, Norfolk Southern’s vice president, strategic planning.

The Crescent Corridor consists of a series of improvements to infrastructure and related intermodal facilities that spans 11 states from New Jersey to Louisiana that includes rail freight and several major interstate highway corridors, such as I-81, I-85, I-20, I-40, I-59, and I-75.

APL debuts “reliability report” for trans-Pacific eastbound sailings

In the wake of rising freight rates, equipment shortages, tight capacity and customer vitriol, one of the top trans-Pacific shipping lines - APL – released a “reliability report” that the Singapore-based company said summarizes trans-Pacific eastbound arrivals.

The report measures 2010 on-time performance for each of APL’s four eastbound trans-Pacific, and according to a statement released by the carrier, since February all of those services “have been 100 percent on time with the exception of the two winter weather delays.”

The liner said it considers vessels on time “when they berth within four hours of scheduled arrival.”

“Most publicly available vessel reliability data uses a more forgiving same-day arrival benchmark. That makes it easier to be “on time” but weakens the reliability measure for shippers,” the carrier said.

The metrics reportedly included on-time performance for all 99 of APL’s 2010 eastbound trans-Pacific sailings through June. In addition to the two late March arrivals, four others missed their windows in January, the carrier said. Two of those were weather delays and another was due to a New Year’s Day port holiday.

“Our service is not perfect, but it is improving,” said Ron Widdows, CEO of APL’s parent company, NOL Group, in a note to customers. “Through this quarterly reliability report, shippers will be able to measure the progress, and we welcome the scrutiny.”

The container carrier said other trades would be highlighted in upcoming reports.

Great Lakes shipping up 53 percent

Shipping activity improved on the Great Lakes during the first half of the season. And there are signs that the demand for cargo will keep getting bigger in the second half.

Cargo on U.S.-flagged lake ships is up 53 percent from last year, and tonnage on the St. Lawrence Seaway is up 17 percent from the first half of 2009.

At Duluth-Superior, port director Adolph Ojard says almost all sectors of shipping are up – and the strongest improvement has been for iron ore. International shipping agent Chuck Hilleran of Duluth says grain is showing an uptick, and it might increase even more as Russia's wheat crop is stung by drought.

-WTAQ News

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India's government and two ports put MSC on notice to pay

The Mediterranean Shipping Company (MSC), owners of the ship MSC Chitra, will have to get its act together soon. The state government and the two ports — Mumbai Port Trust and Jawaharlal Nehru Port Trust — issued notices to the company on Tuesday asking it to set up a time-bound program for salvage operations and pay for all the ecological damages caused by the ship’s collision with another vessel.

MSC Chitra had collided with another vessel, MV Khalijia III, on August 7 causing containers to topple over into the sea and 879 metric tonnes of oil to spill. Some of the containers contained hazardous chemicals and pesticides that, along with the oil, destroyed mangroves and caused damage to marine life.

Considering that we need to open up the channel by the beginning of September, they need to speed up the salvage process. We have also asked them to pay for all the activities including the cleaning of the shore, and the ports on beachfronts across the state,” said State Ports Minister Radhakrishna Vikhe-Patil, who reviewed the salvage operations with the Director General of Shipping on Wednesday.

-Hindustan Times

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Friday, August 20, 2010

Top Story

Fledgling container derivative traders bet on future

Forget civil rights, sexual liberation and pop music. The swinging sixties also saw the advent of containerization in shipping. Some 140m containers now carry around half of the world’s exports by value. And according to the brokers that are starting to offer container-freight derivatives, contracts based on the future price of renting containers, the way these boxes are financed is about to undergo another revolution.

Clarksons, the world’s biggest shipbroker, which pioneered derivatives for dry-bulk cargoes like iron ore and coal in the early 1990s, made its first container-derivative trade in January this year. Since then two other London-based brokers, ICAP and Freight Investor Services, have also started to offer derivatives settled against the Shanghai Containerized freight index, which is based on per-box rates on the world’s busiest container routes. Alex Gray of Clarksons admits that the market is tiny at the moment. But he reckons that container derivatives may be worth 5-10% of the physical market by the end of 2011.

Volatility is also a feature of the container market. Half the container fleet runs like a bus network with regular sailings at set times. With these ships, prices are set under long-term contracts. But the spot market, where vessels are chartered for specific trips or time periods, is very unpredictable, particularly since regulators put a stop two years ago to an arrangement between shipping lines (the top 15 of which control 80% of the market) to manage overcapacity by co-operating on routes and rates.

On August 5th Chile’s CSAV, which runs the world’s eighth-largest container fleet, became the first [shipping line] to make a container-derivative trade (with Morgan Stanley). A couple of other big shipping lines are said to be ready to test the water.

Customers may also want protection from the ebb and flow of prices. Manufacturers of small high-tech electronics goods, where freight costs account for a tiny fraction of the retail price, may not be that bothered about hedging freight rates. But for makers of bulky lower-value goods such as furniture, toys and machinery, the ability to hedge shipping costs should prove a boon. Betting on container rates, which are a proxy for economic activity, may also appeal to speculators. If so, the market could soon become as liquid as the ocean waves.

-The Economist

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Fleet expansion could soften dry bulk rates over next few years

Freight rates for some of the biggest vessels which carry iron ore, coal and grains may be capped because of fleet growth, said DnB NOR ASA, Norway’s largest bank.

“Although volumes are expected to rise, the dry bulk carrier fleet is set to continue its rapid expansion as the order books remain at historically high levels,” Magnus Vie Sundal and Henrik With said in an e-mailed report Thursday. “Taking slippage and cancellations into consideration, we still believe that the fleet growth will keep rates at subdued levels for the next few years.”

About 36 million deadweight tons of new capesize capacity, which are some of the world’s largest dry bulk ships carrying iron ore, may be added this year and about 35 million next year, according to the report dated Aug. 12. The report didn’t provide charter rates.

Freight rates for some of the biggest vessels which carry iron ore, coal and grains and ship oil may climb by 13 percent to 16 percent this year, while still remaining below the 10-year average, Moody’s Investors Service said in February. Shippers may pay as much $38,000 a day on an average this year and $46,000 in 2011 for capsizes from $32,900 a day last year, Moody’s said.

About 14.5 million deadweight tons of Panamax capacity, which mostly transport coal and have an average size of about 75,000 deadweight tons, may be delivered this year and 17.5 million next year, DnB said.

The rates for capsizes will be affected more than that for Panamaxes, according to the DnB report. Capesize charter rates have declined from as much as $233,988 a day to $29,945 Wednesday, according to data on Bloomberg. Charter rates have nearly doubled this month, according to the London-based Baltic Exchange, fueled by speculation that Chinese steel mills have accelerated imports of iron ore, which generates the greatest source of demand for dry-bulk shipping.

-Manila Bulletin/Bloomberg

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Direct ChassisLink expanding to Pacific Southwest

Direct ChassisLink (DCLI) announced it would expand its year-old chassis program to the Pacific Southwest areas of Long Beach, Los Angeles, San Diego, Oakland and Phoenix by October 4, 2010. 

The chassis program, which claims 2000 drayage company participants in several other U.S. markets, said in a statement it would offer the equipment for use at marine terminals, container yards, and railroads.

Boeing to open manufacturing facility at troubled airport in Illinois

Boeing Co. said Thursday that it plans to open a manufacturing facility to work on its defense programs late this year or in early 2011 at a long-troubled southwestern Illinois airport.

The Chicago-based company said the facility at the MidAmerica St. Louis Airport in Mascoutah, its first manufacturing site in Illinois, will create 75 new jobs and at least potentially more down the road.

Longtime observers of the airport, about 25 miles southeast of St. Louis, said the announcement was a rare bit of good news for the airport, which lost its last passenger service in 2008 and has been a money loser.

Boeing officials said they haven't decided the specific roles of the new workers, but they will be building components for the company's St. Louis-based defense business in a leased building at MidAmerica.

The state of Illinois is giving Boeing $2.3 million to help cover the cost of the company's plan, with more than $2 million of it in tax credits to be parsed out over 10 years, said Marcelyn Love, a spokeswoman for the state Department of Commerce and Economic Opportunity.


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Delaware River’s embattled port authority promises reforms

The Delaware River Port Authority, facing a barrage of criticism as a vestige of political patronage, made several reforms on Wednesday in an effort to reinvent itself.

Among the measures commissioners approved were opening the bistate agency's books to regular audits; complying with open-records laws; ending closed-door caucus sessions, and banning no-bid contracts and the hiring of family of employees, even for summer jobs as substitute toll-takers.

The DRPA also will stop doing economic development work unrelated to the four bridges and PATCO train line it operates, all of which connect New Jersey and Pennsylvania in the Philadelphia areas.

"Today, this board will change the culture of how we do DRPA business," Vice Chairman Jeff Nash said.

Over its 90 years, the DRPA has been a complicated institution where officials from Pennsylvania and New Jersey have to agree to get anything done.

Its board of commissioners, mostly appointed by the governors, is an all-star team of political figures from two states known for rough politics. The current roster includes four labor officials, two members of Philadelphia's city council, a Camden County freeholder, Pennsylvania's auditor general and state treasurer and - for good measure - a former Pennsylvania state treasurer.

The authority's job got bigger and harder in 1992, when Congress allowed the agency to start doing economic development work. Since then, it's spent some $400 million on projects with little to do with transportation.

Since then, tolls paid by drivers heading from New Jersey to Pennsylvania have jumped from $2 to $4, with plans to raise them to $5 next year. The aging bridges need work and the PATCO train cars are the originals from 1967, making them the oldest commuter train fleet in the nation, according to officials.

In 2008, the agency pledged to stop using new toll money on some projects. But until Wednesday's new rule, it continued to use funds already allocated for economic development. Those funds historically have been divided evenly between Pennsylvania and New Jersey, and it's been taken advantage of by governors of both states from both political parties.

Board chairman John Estey, a former chief of staff to Pennsylvania Gov. Ed Rendell, and DRPA CEO John Matheussen both said Wednesday that they could support Congress stripping the agency of its grant-making role entirely.

Board member and Philadelphia city councilman Frank DiCicco suggested Wednesday that the entire board be replaced. After a pause, he explained, "I'm serious about that."


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