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Thursday’s announcement that Maersk would leave Charleston by 2011 touched off a firestorm of debate around the state. Gov. Mark Sanford reiterated his stance the SPA’s operating model should be reevaluated. Some observers questioned whether the announcement was a bargaining move. And the ILA blamed the Danish company for putting workers “at the end of their corporate greed chain.”
By Molly Parker
mparker@scbiznews.com
Published Dec. 19, 2008
Gov. Mark Sanford’s office says Maersk’s announcement that it is pulling out of the Port of Charleston is case and point that the S.C. State Ports Authority’s operating model should be reexamined.
The governor has long been an advocate of the SPA operating like most other ports across the nation, where the state leases the land to a private company that operates the terminals.
“It does highlight the importance of moving to a business model where we can have more private capital infused into the system,” Sanford spokesman Joel Sawyer said.
Meanwhile, other observers questioned whether Maersk’s decision is part of a hardball negotiation tactic to sway the International Longshoremen’s Association. The Denmark company has asked the three local ILA chapters in Charleston to sign off on a plan that would allow Maersk to operate out of the SPA’s common-user gates.
Such a move would eliminate several dozen checker and clerk union positions in exchange for work done by SPA employees. Union members voted last week to deny Maerk’s request.
In its statement Thursday, Maersk blamed the ILA for its decision to leave. Today, the union’s national chapter issued a stinging rebuke of the company, saying that Maersk has made it clear “it places its dedicated ILA workers at the end of their corporate greed chain, behind shareholders and profits.”
Hal Johnson, president and CEO of the Upstate Alliance, called Maersk’s tough stand a “leveraging tool.”
“But if they’ve put it in the press, they’re certainly willing to go that route,” Johnson said. “If they do leave it will cause some pain at the port, but I think there will be someone coming right behind them to take that space.”
Maersk makes more than 400 ship calls at the Port of Charleston every year and represents about 20% of the SPA’s container business. Unable to reach an agreement with the ILA to cut costs, Maersk said it will leave no later than Dec. 31, 2010 when its contract expires.
Hagood Morrison, a commercial real estate broker with Colliers Keenan in Charleston, also doubted that Maersk would leave in the end, even though the company said it would start by removing one service in January that represents about a quarter of its business here.
“We lose track of the fact, the hard cold fact, that the economy will come back, that the Panama Canal will be widened, and there will be a tremendous pressure on these Southeastern ports,” said Morrison, who represents commercial developments tied to the port. “They can’t afford to close the door from coming into one of these major ports.”
Still, there was no question that Maerk’s announcement on Thursday shook the local maritime industry that relies on strong trade activity at the Port of Charleston. Already this fiscal year, between July and November, container traffic was down 4% compared to last year. In November, it was off 13% from the same month in 2007.
SPA chief executive Bernard Groseclose said the port would work tirelessly to lure new shipping lines to replace the business.
“This port, our region and our state will suffer greatly from Maersk’s departure,” he said. “This will mean great losses for our economy at a time when we can least afford it.”
The state unemployment rate was higher last month than it has been in 25 years. Thousands of jobs across the state are tied to port activity.
“It’s a say day for South Carolina,” said Pat Barber, president of the Charleston Motor Carriers Association and the owner of a local trucking company. “The finger pointing going on today is exactly what got us here in the first place. Had we collectively come together, I’m sure we could have found some compromise.”
What’s needed now is leadership from Columbia to “pull together and show a collective consensus” that the state stands behind the port system instead of losing focus on attempts to rewrite the business model, Barber said.
Sawyer said that the governor also would support moving the SPA directly under his purview if the appetite doesn’t exist for a private operating model. That would mean scrapping the SPA’s board and making port executives directly responsible to him, Sawyer said. That concept was introduced last week in legislation filed by Rep. Jim Merrill, a Charleston Republican.
“This particular news is a reminder that the global shipping game has changed,” Sawyer said.
Reach Molly Parker at 843-849-3144
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