By Dan McCue
Staff Writer

Cargo volume at the Port of Charleston declined by nearly 5% in the fiscal year that ended June 30, S.C. State Port Authority officials said Tuesday.

After a string of record years, the SPA reported that roughly 1.88 million TEUs, or 20-foot equivalent units, had passed through Charleston’s terminals in fiscal year 2006-2007, a decline of 4.8% from the previous fiscal year.

In a written statement, SPA President and CEO Bernard S. Groseclose Jr. said the decline was mainly driven by mergers in the shipping industry, the ongoing slump in the housing market, and weakness across all trade lanes in the South Atlantic.

Others, however, attributed at least some of the decline to increased competition from other ports in the Southeast which, thanks to ample available land and political support, have had a far easier time expanding than the Port of Charleston has in recent years.

“Savannah, basically, has kicked our butt,” said Jerry Ward, president of Blackhawk Logistics in Hanahan.

“Its ability to continue to grow has had a big effect on the total volume of cargo that third-party logistics companies have moved from the (Charleston) port this year … In fact, I’d have to say that the first six months of this year were among the worst I’ve seen in my more than 18 years in the business.”

The Port of Savannah handled 2.33 million TEUs in fiscal year 2006-2007, a gain of 14.5 % over the previous year.

Recently, port officials in Charleston met with warehouse and logistics service providers to discuss the situation, according to several individuals who attended the meeting.

Topics discussed included the lavish tax incentives lawmakers in other states are throwing at companies like The Home Depot and Wal-Mart to entice them to locate massive storage facilities near their ports, and ways to market the area surrounding the Port of Charleston more effectively.

Ward, who owns 500,000 square feet of warehouse space off Remount Road in Hanahan, said many in the logistics community believe the port hasn’t capitalized as much as it can on the amount of storage space that exists around its terminals. He also said he left the meeting believing the situation will be handled more effectively in the future.

“The argument has always been that we have a lot of storage space near the port’s terminals, but it’s filled,” Ward said. “While that’s true as far as it goes, what’s been missing are assurances that if you want to be in Charleston, we can make that happen.

“By the time a deal like those that have occurred in Savannah and near the Port of Virginia is done, we can be empty, or even build something,” he continued. “There’s between 3 million and 4 million square feet of storage space around the Port of Charleston.

“Now, while I might not have a solution for some of these companies today, I say give me some time and I’ll find a solution for you,” Ware added. “If you just flatly tell a company you can’t satisfy their storage or logistics needs, they go away forever.”

But if the Port of Charleston’s cargo container numbers were down, optimism about the future remained high at the SPA.

For the fiscal year, the authority’s operating revenues totaled $153.44 million, while operating expenses were $103.56 million. As a result, earnings for the year reached $49.8 million, which translates to a 32.5 % operating margin.

At the same time, the SPA obtained permits and broke ground for a new three-berth, 280-acre terminal at the former Charleston Naval Base. Work is now under way to ready the site for consolidation and construction.

The General Assembly has also directed $167 million toward construction of an access road for the facility.

Also this last fiscal year, new equipment totaling $64 million was delivered and installed at the Port of Charleston’s terminals, including four new super post-Panamax container cranes and 16 rubber-tired gantry cranes to improve space utilization and service to truckers.

And while container volume may have been down, crane productivity, a critical benchmark to the SPA’s customers, rose by 5%, with cranes loading and off-loading cargo averaging 40.53 moves per hour per crane for the entire year, up from 38.76 moves per hour in fiscal 2005-2006.

Average trucker turnaround times through the SPA’s common user gates, another critical benchmark to the authority’s customers, dropped to just 20.76 minutes, a 10% improvement over 22.99 minutes in fiscal year 2005-2006, SPA officials said.

At Blackhawk Logistics, Ward said he feels very bullish about the future of the Port of Charleston, explaining that he chose to put down roots at the company’s current location two years ago because of its proximity both to the SPA’s North Charleston terminal and the new Navy base terminal.

“We were a new company, and as such, taking on such a sizable property may have been a risk, but when I looked at the site and considered it in light of the direction the port is moving in, I told my investment partners, this is ground zero in terms of global trade,” he said. “We just couldn’t pass up an opportunity like this.”

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