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THE PORT OF CHARLESTON
2004 a springboard year for local ports
By Matt French
Staff Writer
The South Carolina State Ports Authority will likely remember 2004 as a springboard year. The fourth year of the new century was another banner year for the port, as a record amount of freight passed through its gates; BMW, the state’s largest exporter, renewed a 10-year deal with the port to use Charleston’s facilities; and a five-year program designed to both widen and deepen the harbor was largely completed in May.
Not bad for one year.
The port announced in September, just two months into its fiscal year, that it had already seen a 13% growth over the amount of cargo moved over the same period in 2003. The port has forecast an overall 6% growth for the fiscal year.
The port is moving more and more container cargo though its facilities, due in large part to increased trade with China and India, the port’s investment in new equipment that allows for higher stacking of cargo containers, and a more efficient yard management system that relies heavily on radio frequency identification in the sorting and tracking of containers. Outbound cargo has also been flowing more steadily to the lagging markets in Latin America, Europe and Asia.
“Our numbers in October were up 18 percent over the same period as last year and from July through October were up 15 percent,” says Byron Miller, spokesman for the South Carolina State Ports Authority. “Any way you look at it, the volume of cargo has increased.”
Part of the increased volume came about because of the yard management system at the North Charleston terminal. A similar system was supposed to be in place at Mount Pleasant’s Wando Wellch terminal by the end of November, but Miller says taller radio-frequency towers were needed at that facility, delaying deployment of the system until early next year.
“It’s a different ballgame at Wando because the volume there is much larger,” Miller says. “You have to make sure it’s going to function properly. The first requisite is that the infrastructure works.”
Miller says one of the most important accomplishments in 2004 was the completion of the harbor-widening project. That particular $150 million program began five years ago and was largely completed in May.
The U.S. government is funding 65% of the project and the state is funding the rest. The port is now just waiting for the financial contribution from the state to arrive so the project can be closed out financially, Miller says.
“It’s taken so long to realize this project,” he says. “We began studying the feasibility in the early 1990s because we knew then that the ships were going to get bigger and we had to accommodate them, or we would fade away.”
The port also faced safety concerns from longshoremen and stevedores following some notable incidents that left two dead and several more injured. The most recent incidents took place in the last two months of the year, when an empty shipping container fell on the vehicle of a port clerk, critically injuring him, and a piece of equipment broke, dropping two men onto a ship.
Toward the end of the year, following on the heels of some safety concerns and accidents at the port, the SPA, stevedores and longshoremen formed a new Port Safety Council.
“Port safety, just like productivity, is a team effort,” says David Hogan, president of the International Longshoremen’s Association Local 1771. “The Port Safety Council will allow us to work closer.”
“The waterfront looked around after the recent accidents and asked, ‘What can we do?’ This is something concrete that we can do to help bolster safety and awareness,” says Bill McLean, the SPA’s vice president of operations.
The new group will focus on best practices, ways to boost safety and communication between the various groups.
“You have to be vigilant when it comes to safety,” says Larry Young, president of the South Carolina Stevedores Association. “This new initiative will provide a channel for issues to be communicated and addressed.”
Al Parish, director of the Center for Economic Forecasting at Charleston Southern University, says the region’s ports have done a tremendous amount in 2004. But, he adds, they will face critical shortages in coming years if the state delegation, local community and Army Corps of Engineers continue what he calls “foot-dragging” on port expansion plans.
“The port has done all it can in terms of expanding its capacity, from stacking containers higher to moving them around faster to using more land at the Wando Welch terminal,” he says. “But the new terminal is just taking too long. The Army Corps is taking too much time studying the issue and not doing something about it.”
Parish says the past year has demonstrated the port’s ability to improve its facilities with the land it has, but that the port must expand its operations if its rate of growth is to be maintained.
“The port of Norfolk got its permit in six months. We’ve been waiting for years,” he says. “The people in Norfolk and Savannah understand the economic importance of the port, and the people here either don’t understand or don’t care. Shipping lines are already hedging their bets and sending some business south to Savannah or north to Norfolk. We have to quit studying the issue and get to building the port.”
Savannah and Charleston each do about $23 billion in business annually. But by comparison, Georgia’s gross domestic product is two and a half times larger than Charleston’s, meaning the business the South Carolina State Ports Authority does is two and a half times more important to the state’s economy as a whole.
Parish says the SPA has done all it can to get permits approved, but, for a reason he can’t decipher, the relations between the port and the Army Corps of Engineers “is not tremendously good right now.”
The blame, he says, lies largely with the majority of state legislators, who fail to recognize the critical part the port plays in South Carolina’s economy.
“Legislators in Greenville and Spartanburg understand better than our own legislators in the Charleston area the importance of the port, economically,” he says. “The blame is well dispersed among the state legislators, local officials and Army Corps, but I’d say a majority lies with the state.”
Parish does not expect 2005 to be a “crunch year” for the port, as the expansion of the Wando Welch terminal is expected to begin next year. But before long, the port will simply run out of room.
“Simply put, the port has to expand to grow, and if it can’t grow, it will shrink,” Parish says. “There’s a feeling out there that the port can stay the same size, and that’s just not true. It’s either going to get bigger or it’s going to get smaller.”
Matthew French covers imports and exports for the Business Journal. E-mail him at mfrench@crbj.com.
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