Holt Logistics helped grow Philly’s port. Truckers worry the company is getting too big.

The Port of Philadelphia has been booming in recent years. Cargo units have almost doubled since 2016, as the deepening of the Delaware River and public investment have enabled the port to accommodate bigger ships that carry containers full of fruits and meats from such countries as Chile and Australia.

The port — long known as a top market for refrigerated cargo such as produce — in December welcomed the largest vessel ever to stop here, via a shipping line that serves South China and Southeast Asia through the Suez Canal.

A key driver of that growth has been Holt Logistics, a South Jersey-based, family-owned company founded almost a century ago that operates terminals on both sides of the Delaware River, including Philadelphia’s largest, the Packer Avenue Marine Terminal.

Holt has held the lease to the Packer Avenue terminal for more than 30 years, and in just the last decade it says its companies have invested more than $200 million to support Philadelphia port operations.

The state of Pennsylvania has invested more than half a billion dollars in the port since 2016, betting that major infrastructure upgrades to the commercial hub will help power the regional economy.

But as the port grows, some in the logistics industry say Holt is getting too big, offering services that go beyond a terminal operator’s core role of loading and unloading ships. That growth has been enabled by favorable treatment from the state agency that oversees the port, critics say, adding that they’ve lost business to Holt as a result of what they think could be anticompetitive conduct in violation of federal law. They warn that if the state agency that governs the port doesn’t take action, truckers who move the cargo from the docks could go out of business, and Holt will gain monopoly power — and potentially raise prices for shippers.

Holt denies engaging in anticompetitive conduct and says it has reduced costs for shippers, making Philadelphia a more attractive cargo destination in the competitive East Coast market.

Federal regulators have taken an interest in the truckers’ allegations. A senior investigator for the Federal Maritime Commission wrote in a Feb. 8 email — seen by The Inquirer — to trucking company Tri State Intermodal that the agency is reviewing information and documents provided by the truckers. The agency has assigned civil trial lawyers to the investigation, emails show.

Three other trucking companies told The Inquirer they’ve lost business to Holt and raised similar concerns about its business practices.

The dispute comes after the pandemic focused the public’s attention on the importance of resilience in supply chains, as the United States faced shortages of medical products and other goods. Early in his administration, President Joe Biden signed an executive order aimed at increasing competition across the economy and encouraging more rigorous enforcement by federal regulators.

Shipping now faces another stress test amid the conflict in the Middle East, as Iran-backed Houthi rebels in Yemen have been attacking commercial shipping in the Red Sea. And a severe drought in the Panama Canal — a key trade route between the U.S. and Asia — is disrupting the global economy.

While those events are shaping international trade, the biggest flashpoint in the Philadelphia Regional Port Authority’s monthly meetings on Delaware Avenue near the Betsy Ross Bridge has been Holt.

“What’s being done here in Philadelphia is not part of the standard operating procedures of a marine terminal operator,” said Mike Hellam, who worked with ports around the country as an agent recruiter for national trucking company Evans Delivery before starting his own trucking business.

Hellam, who says he lost business to Holt, added: “They are actually maintaining control over who handles the trucking and transportation portions.”

‘Hell of a job’

The Holt family business started in 1926 as a small trucking company in Camden, but over time Thomas Holt Sr. grew it into an empire with an ocean cargo line and marine cargo handling operations not just in Philadelphia and Gloucester City but also Jacksonville, Fla., and Puerto Rico.

Many of its assets were sold off after the Holt Group filed for bankruptcy in 2001, but the family continued operations in Philadelphia. Holt, a privately owned company, declined to share financial data.

“They’ve done a hell of a job bringing more business into the port,” said Tim Avanzato, an executive with Lanca Sales, a New Jersey-based import/export company.

During a tour of the terminal Friday, longshoremen could be seen operating cranes to drop empty containers onto a Maersk ship that had arrived from South America carrying frozen meat, shoes, auto parts, and other goods. Inspectors with Customs and Border Patrol were scanning containers, and truckers were picking up cargo.

In an interview Friday, Leo Holt, the company’s president, said his family chose to invest in Philadelphia despite headwinds facing maritime transportation generally and even though ports in New York and California handle significantly more cargo.

“Whilst in recent years people have become aware very painfully of the supply chain, and its fragility, we have been living it … almost for the last century through a phenomenal period of change and growth,” he said at the company’s offices underneath the Walt Whitman Bridge.

“What’s been steady through those ups and downs is our willingness to invest in our people, our willingness to invest in facilities, and our willingness to bet on the future of the Port of Philadelphia.”

Some logistics executives say they’re concerned about Holt’s business practices — specifically its brokerage that connects shippers with trucking companies.

A terminal operator’s main job is to load and unload ships. With its brokerage, Holt operates in another part of the supply chain — determining how containers get from the terminal to a railroad or warehouse, where their contents are stored before reaching manufacturers, distributors, or retailers. Holt also operates a new warehouse, developed with $52 million in state funds, a mile from the Packer Avenue terminal.

Trucking companies say Holt bundles these services — terminal, trucking brokerage, and warehousing — to shippers, offering rates they can’t match. Holt also offers more efficient terminal services, such as clearing customs, to shippers that use its brokerage, truckers say. And as the terminal operator, Holt has access to information about all the cargo flowing into the port — and therefore a road map to potential customers for its brokerage business, critics say.

Leo Holt said his company brokers less than 4% of containers that come into the Packer Avenue terminal and is “emulating” industry best practices. The terminal operator shares data with Holt’s competitors in trucking and warehousing, he said.

Albert Iannelli, president of Northstar Transport Services, said Holt’s brokerage hasn’t underbid his company, but he’s concerned nonetheless. “As Holt gets bigger and stronger, will there be enough business for the trucking community in Philadelphia or will they absorb all of it?” he said.

An infusion of state money

As Holt has gained new business, it’s also benefited from state investment in the Packer Avenue terminal. The terminal and the port’s other facilities are owned by the port authority, known as PhilaPort.

As governor, Tom Wolf made port expansion a key part of his economic plan. It was a shot in the arm for Philadelphia, which had been a major commercial hub back when the U.S. was a manufacturing powerhouse but fell behind other East Coast ports amid 20th-century deindustrialization and a failure to keep pace with infrastructure investment made in other cities and states.

Wolf and port leadership announced the first round of funding — $300 million — in November 2016, with two-thirds of that earmarked for the Packer Avenue terminal, which was built in 1967. The capital financed PhilaPort’s purchase of new electric container cranes, among other things, and Wolf highlighted the jobs it would create.

At the same time, the state announced it had renegotiated its leases with Holt — whose agreement dated to 1991 — and two other tenants “to market rates.” As part of Holt’s amended lease, PhilaPort agreed to provide Holt 365,000 square feet of warehouse space to replace 280,000 square feet inside the Packer Avenue terminal it would tear down to make room for containers. The port says that extra container capacity has helped drive growth.

In the next two years three Holt brothers contributed $110,500 to Wolf’s 2018 reelection campaign, plus another $50,000 to Wolf’s PAC in 2019 and 2020, records show. Holt Logistics also spent $90,000 on lobbying during Wolf’s tenure, according to state records.

The port authority spent $10 million in 2017 to buy a 30-acre site near the Packer Avenue terminal that was once the Philadelphia Regional Produce Terminal. The property is now home to a $42 million, 200,000-square-foot dry warehouse operated by Holt, which said it has invested an additional $25 million in the building. A second, 165,000-square-foot refrigerated warehouse is underway. Officials have said the new warehouses would expand the port’s capacity to move cargo.

Truckers including South Philly-based Tri State Intermodal questioned why the port didn’t follow a competitive bidding process in selecting an operator for the warehouse. PhilaPort board chairman Michael Pearson, an appointee of Gov. Josh Shapiro, said the authority selected Holt because of the requirements in the lease.

The state provided the port an additional $269 million under Wolf, bringing the total to more than half a billion dollars. His administration’s funding helped develop a 155-acre automobile processing center in the Navy Yard known as Southport. And the port authority is developing its first new berth — a place where ships can stop to transfer cargo — in 50 years, also at Southport.

From 2015 through 2023, PhilaPort invested $420 million across more than a dozen terminals and facilities, according to data obtained through public records requests. Forty-six percent of that total — $195 million — went to the Packer Avenue Marine Terminal. Over this same period of time, Holt paid $29 million in rent to the port — or 21% of the port’s $137 million in total rental income.

In other words, while Holt accounted for just one-fifth of the agency’s rental income, the company’s terminal received almost half the public capital invested by the port.

It’s doubtful, Tri State said in a letter to port leadership, that the lawmakers who established the Philadelphia Regional Port Authority intended for one terminal operator to have access to a “bounty of taxpayer-funded capital which allows it to unfairly compete/take business from smaller Pennsylvania-based companies without access to that same bounty.”

The vast majority of the state funding was financed through bonds; in 2017, several port initiatives were included in a list of capital projects authorized by the legislature as eligible for such financing. At the time, Wolf and his administration said the bonds would be repaid by revenue from the port’s leases, not taxpayers. The port’s annual rental income has doubled since 2015, from $11 million to $22 million, and the agency hasn’t relied on state subsidy for operating needs since 2018.

However, the borrowing was financed by general obligation bonds, so the money to cover the debt service actually comes from the state’s general fund, not directly from lease revenues, according to a Pennsylvania Department of Transportation spokesperson. That means taxpayers are in fact on the hook, said Nathan A. Benefield, senior vice president at the Harrisburg-based Commonwealth Foundation, a right-leaning think tank.

Board chairman Pearson — who’s also a real estate executive and CEO of Philadelphia nonprofit Public Health Management Corp. — said the port’s capital planning was influenced by the 2016 expansion of the Panama Canal in Central America, which has allowed bigger ships to carry more cargo through the waterway that connects the Pacific and Atlantic Oceans.

Those newer, larger “Super Post-Panamax” ships — so named because they were designed to fit through the expanded canal — were “unable to navigate beyond the Walt Whitman Bridge,” Pearson said. That restriction “was a determining factor in the port’s planned growth south of the Walt Whitman Bridge.”

Improvements to the berth to accommodate new cranes helped “leverage the capabilities” of the recently completed dredging of the Delaware River to 45 feet, he said. Pennsylvania and the U.S. Army Corps of Engineers spent hundreds of millions of dollars on the project.

From 2016 to 2023, container volume increased 82%, Pearson said. He said 60% of all jobs on the port are related to container business, which also accounts for a majority of the $90 million in annual tax revenue generated by the port.

The number of jobs supported by the port increased 25% to 12,100 across its terminals and facilities since 2016, the port has said.

As part of the lease agreement, Holt purchased two Ship-to-Shore container cranes and developed an on-dock inspection facility for the U.S. Department of Agriculture, among other improvements, Pearson said — private investments that “have totaled tens of millions of dollars.”

Political contributions in Pennsylvania

Holt has worked to cultivate ties to politicians in Harrisburg who help set the state budget. Since 2010, three Holt brothers who are also company executives — Leo, Thomas Jr., and Michael — have contributed $742,000 to Pennsylvania political committees registered with the Department of State, an Inquirer analysis found. More than half of that went to the three most recent governors — Democrats Shapiro and Wolf, as well as Republican Tom Corbett — who along with legislative leaders appoint PhilaPort’s 11 board members.

Shapiro’s transition team was chaired by William Sasso, chairman emeritus of the law firm Stradley Ronon and a longtime attorney for the Holts.

“Holt has long supported leaders who support the port, and we make no apologies for doing so,” said Kevin Feeley, the company’s spokesperson, adding that the governor “is uniquely positioned to direct policies and investments that impact the port.”

One public entity whose board members are mostly appointees of the governors of Pennsylvania and New Jersey recently faced scrutiny over its oversight of a lease with Holt.

Since 1984 the company has held a lease with the Delaware River Port Authority for land beneath the Walt Whitman Bridge in connection with Holt’s wharf and marine terminal operations in Gloucester City.

The bistate agency — which operates the region’s bridges — initially set annual rent at $19,000, or about $57,000 in today’s dollars. Holt’s rent was reduced to $1 in 1993 as part of an unrelated agreement. The rental arrangement hasn’t been updated since, according to a 2022 inspector general’s report, which recommended negotiating the lease at current market rates.

A DRPA spokesperson told The Inquirer last month that the agency “is completing the due diligence work necessary to take action.”

Holt’s spokesperson said a portion of the seven-acre parcel was “literally created by Holt in the 1980s when it built a new wharf at the adjacent Gloucester Marine Terminal, which today employs nearly 1,000 people.”

The leases “were negotiated fairly and with full consideration for both sides, including recognition of Holt’s improvements to the site” as well as use restrictions, the spokesperson said.

The loss of a $2 million contract

Truckers say their frustration is exacerbated by Holt being the beneficiary of the millions of dollars in investment from Harrisburg.

Leading the public criticism of Holt has been Tri State Intermodal, a family-owned company that owns or leases 65 trucks and has 65 employees.

In 2022 Tri State lost a $2 million annual contract with bottled water manufacturer FIJI Water, which switched to Holt’s brokerage.

Tri State says Holt’s bid for the FIJI deal was enabled in part by the new state-funded warehouse that was incorporated into Holt’s lease, because it gave Holt another resource to offer shippers. Bottles of FIJI Water have since been stored at the warehouse. Holt has been in the warehousing business for years; when Tri State had the FIJI contract, it would often take containers to a Holt-operated warehouse in New Jersey.

“We at Tri State do not fear competition, but currently our business, our livelihoods, and those of many other local trucking companies are in danger of failure due to what we suspect is unfair competition being carried out by the Holt family of companies,” the company wrote to the port board’s chairman last fall.

During a pre-Christmas meeting of PhilaPort’s board, Tri State’s John P. DiDomenicis III likened Holt to Scrooge, “bullying the port community” and “leveraging his position as port operator to gain more and more power.”

Holt says its operations “reduce customer costs, provide shippers with a series of efficiencies and so improve the competitive position of our port.”

Making Philadelphia a more attractive cargo destination “works to everyone’s benefit, including our nearly 3,000 union employees and their families,” a Holt affiliate said in a January letter to the port.

Tri State’s demand that Holt exit the trucking business shows that Tri State is only interested in securing profits, not fair competition, Holt said.

The port’s deputy general counsel, Brian Gocial, told Tri State in a December email that the agency takes “all allegations of improper conduct relating to PhilaPort facilities seriously” but that the truckers “have not provided specific information or documentation” demonstrating a violation of the law or breach of Holt’s lease.

Holt spokesperson Feeley said FIJI had described “numerous problems” with Tri State’s servicing of the account, including that during the pandemic, Tri State “prioritized transport of on-dock containers based on which customers were paying the highest rates.” (Tri State disputed that assertion.)

Holt has invested more than $100 million in warehouse space to support increased cargo volume, Feeley said. This gives Holt “a decided advantage in competing for cargo,” he said. If other companies choose not to invest in warehouses, he said, “they must live with the consequences of their decisions.”

FIJI’s parent company, The Wonderful Co., declined to say why it switched to Holt’s brokerage but said it reviews trucking contracts every year. FIJI said it has contracted with Holt for warehousing services for 10 years.

Tri State reached out to the Federal Maritime Commission last year about the FIJI account and other matters. Matthew D. Forst, senior investigator for the FMC’s Bureau of Enforcement, Investigations, and Compliance, told Tri State in a Feb. 8 email that “every aspect” of that information “is being reviewed and analyzed and these efforts are ongoing.”

Holt said it has been told that “the commission is currently in the preliminary phase of its review” and that the company “will cooperate fully.”

“We are patriots. … We pay our taxes, we’re very careful. We believe in the rule of law,” Leo Holt said.

FMC spokesperson John DeCrosta said the agency “does not discuss matters related to potential investigations.”

Generally, he said, when the Bureau of Enforcement receives an allegation of misconduct, it reviews the information and decides whether to pursue the matter. At that point, it conducts an “initial assessment” to determine whether the allegations are accurate.

If investigators conclude there’s been a violation of the law or regulations, they can ask the agency’s five-member commission to negotiate a settlement with the party involved or seek to initiate a formal proceeding with an administrative law judge — akin to bringing a lawsuit.

“Asking questions does not convey an assumption of wrongdoing or guilt,” DeCrosta said.

PhilaPort’s Pearson said the state agency has consistently “maintained that the FMC is the proper venue for Tri State to pursue their complaint.”

“It would not be proper for me to provide comment on our tenants and their business relationships,” he said. The port has consulted an outside law firm, Blank Rome, he said.

Gatekeeper to commerce

Ocean shipping is a key part of the U.S. economy. Maritime vessels carry 70% of U.S. international trade weight, according to federal data. Everything from consumer goods such as TVs and cell phones to energy supplies and raw materials rely on maritime supply chains.

That means marine terminal operators and shipping lines are gatekeepers to commerce — a fact that Congress recognized in federal law. Under the Shipping Act, those gatekeepers face a higher obligation not to engage in conduct that could undermine competition, according to the American Antitrust Institute, a Washington, D.C.-based nonprofit research and advocacy group.

Tri State contends Holt has violated a provision of the Shipping Act that says marine terminal operators may not give “any undue or unreasonable preference or advantage … with respect to any person.”

Tri State points to an April 2022 email from German international shipping company Hapag-Lloyd about the shipping line’s decision to switch from Tri State to Holt’s brokerage for transportation from the terminal to a railroad.

“The main driver is to avoid or mitigate Hapag-Lloyd’s storage exposure in the port,” the email says, according to a copy shared with The Inquirer. Tri State, in its letter to port leadership last fall, said this shows Holt’s terminal business is “manipulating storage fees” to drive business to its brokerage.

A Hapag-Lloyd spokesperson declined to comment.

Holt’s spokesperson, Feeley, said the terminal operator does not reduce port fees for clients of Holt’s brokerage, Holt Cargo Systems.

What distinguishes the brokerage is its emphasis on moving cargo efficiently out of the port, reducing costs for shippers, the company says.

“Our DNA is to get it moved, and get it moved expeditiously,” Leo Holt said.

He said the notion that the terminal operator gives preference to Holt’s family of companies “is absolute fantasy.”

“We must have the velocity through the port. Guess what happens if we don’t have the velocity through the port?” he said. “The customers can vote.”

Tri State isn’t the only company upset with Holt.

Hellam, the former Evans Delivery recruiter, said he’d spent months recruiting a customer to the port and thought he had a deal that would result in estimated annual revenue of $750,000. But before a single shipment came, he said, in fall 2022 he learned the customer had switched to Holt.

Hellam declined to name the customer to preserve business relationships, but other sources familiar with the matter identified it as furniture maker Restoration Hardware.

Hellam said the shipper told him the reason behind the switch wasn’t just a lower rate for trucking services: Holt had also guaranteed that it wouldn’t charge the shipper for port demurrage, or the time a container spends inside the terminal before it’s taken to its next destination.

Only the terminal operator can influence such port charges. “That takes out fair market competition,” Hellam said.

Holt’s spokesperson, Feeley, disputed Hellam’s role in soliciting the business, saying Holt and the shipper, MSC, had recruited Restoration Hardware. “At no point did Holt guarantee that it would not charge demurrage,” Feeley said.

Hellam said a different steamship line was involved and that Holt’s account is “completely incorrect.”

Restoration Hardware said that only its CEO can comment on behalf of the company and that he wasn’t available.

‘Not a level playing field’

Hellam and Tri State say they want the port to intervene, noting that the Packer Avenue lease prohibits the tenant, Holt, from violating federal law.

The port’s deputy general counsel, Gocial, told Tri State in a December email that the truckers had not provided evidence that FIJI’s switch to Holt’s brokerage “was due to preferential treatment rather than legitimate business concerns.” He declined Tri State’s request for a meeting but wrote that port leadership was willing to review documents that may substantiate its allegations.

It remains to be seen whether the Federal Maritime Commission will take action. Tri State could also file a complaint with an administrative court housed in the FMC. The truckers say lawyers have told them it would cost more than $2 million to litigate.

Tri State’s John Henkel said he worries PhilaPort has effectively ceded control of the port to its longtime tenant.

“It’s not a level playing field,” he said.

Two other trucking companies who asked not to be named said they’d lost business to Holt’s brokerage.

Avanzato, the import/export executive and a Tri State customer himself, said it makes sense for Holt to direct terminal traffic to the CSX railroad nearby, in order to keep containers moving efficiently.

Beyond that, he said, “the concern from the trucking community is: Where does it end?”

Gregory T. Gundlach, professor of marketing in the Coggin College of Business at the University of North Florida and a fellow at the American Antitrust Institute, said consolidation has increased “at every level of the supply chain” across the U.S. and globally.

To assess whether alleged anticompetitive conduct is unlawful, Gundlach said, regulators and courts focus on whether “consumers have been harmed — through either higher prices, lower quality, or less innovation.”

Staff writer Aseem Shukla contributed to this article.