Resistance to port’s growth reduces its national ranking

Charleston Business Journal > May 15, 2006 > News

By Dan McCue
Staff Writer

The public opposition to the creation of a new cargo container terminal on Daniel Island was likely among the factors contributing to the Port of Charleston dropping for fourth to seventh place among U.S. ports in terms of container volume.

According to the American Association of Port Authorities, the Ports of Oakland, Calif., and Tacoma and Seattle, Wash., surged ahead of the Port of Charleston in 2005 in terms of volume of containers that moved through their respective terminals.

“Ports have always been an up and down business, and the fact is these other ports have simply grown faster than we have,” said Bernard R. Groseclose, president and CEO of the South Carolina State Ports Authority.

Groseclose said a couple of factors contributed to the Port of Charleston’s growth not keeping pace with the ports that surpassed it in the AAPA rankings this past year.

One is simply the fact that the ports are on the West Coast, and as they’ve grown, shippers who were impacted by bottlenecks at the Ports of Los Angeles and Long Beach earlier in the decade have been able to easily shift the movement of their cargo to those locations.

The other factor is uncertainty over the Port of Charleston’s ability to grow in the wake of the public’s rejection of a planned terminal facility on Daniel Island.

“Uncertainty about where we would be able to grow caused shippers to question whether or not we’d be able to handle the growing volume of their trade, and quite honestly, that caused some to reroute their cargo to ports like Savannah,” Groseclose said.

“Now, make no mistake, we’re still growing; we’ve doubled the volume of containers that come through the Port of Charleston over the past 10 years, but when shippers move cargo to other ports, they sign five- to 10-year contracts, so it’s awfully hard to get them to come back.

“That’s why it’s vital that we begin construction of a new terminal at the old Navy base,” he said. “We need to grow in order to create economic opportunity and jobs for both Charleston and all of South Carolina.”

Measuring up

The AAPA port ranking compares ports on the basis of TEU container throughput—in other words, the volume of containers moving through a port on an annual basis. A TEU is a measurement equal to the space occupied by a standard 20-foot container. One 40-foot container is equal to two TEUs.

The top three positions in the ranking have remained unchanged since the year 2000. The Port of Los Angeles is the industry leader, handling 7.5 million TEUs last year, followed by the Port of Long Beach, with 6.7 million, and the Port of New York and New Jersey, with 4.7 million TEUs.

Fourth place is now occupied by the Port of Oakland, which handled 2.2 million TEUs. The Port of Seattle came in fifth, with 2.08 million TEUs, the Port of Tacoma was sixth, with 2.06 million TEUs, and the Port of Charleston was seventh, with 1.98 million containers, a record volume for the port.

Rounding out the top 10 U.S. ports were Hampton Roads, Va., Savannah, Ga., and San Juan, Puerto Rico.

The Port of Charleston soared up the rankings following the opening of the Wando Welch terminal in 1981. The year before, it had been 15th on the list. It cracked the top 10 for the first time in 1983.

Despite the decline in its container volume ranking, the Port of Charleston remains fourth in another measure of port success, the port import/export reporting service or PIERS rating, which covers only loaded commercial containers and not those that are empty or transported for the military or between domestic facilities.

“To me, these number ultimately indicate a few important things,” said SPA spokesman Byron Miller. “First of all, Charleston grew faster than eight of the other top 20 ports in the country. Also, the ports ranked fourth through 11th are all bunched up, so there will likely continue to be movement in the rankings amongst them.

“The other things this shows is that the ports at Hampton Roads, Va., and Savannah are nipping at our heels, and as is true in any business, if you’re not growing, you’re in decline, and that’s what we’re girding ourselves against,” Miller said.

Investing in the future

In the near term, the SPA is investing heavily in new equipment. In the past year, it has ordered $60 million in new equipment, including several new stacking cranes that will arrive within the next few months. Several other large dockside cranes are also currently under construction for the port in China.

Of course, rankings are fleeting. The Port of Seattle has already reported that its first-quarter container volume declined by 8.4% compared to 2005.

The Port of Seattle attributed that drop to recent carrier and shipping alliance service changes and rerouting, and also to tough comparisons with the boom months of early 2005, driven, among other things, by carrier diversions to the Northwest to avoid congestion at other West Coast ports.

Dan McCue is a staff writer for the Business Journal. E-mail him at dmccue@charlestonbusiness.com.