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Charleston ready to seize distribution business
By Dan McCue
Staff Writer
Savannah might have gotten the jump on Charleston in terms of the distribution center and warehousing business, but waterfront insiders believe progressive operational policies at the Port of Charleston, an explosion of distribution center construction in Jedburg, and a growing recognition of the flexibility of facilities already in the mix here could significantly narrow the gap.
“There really is no reason for anyone to claim Charleston can’t handle additional businesses, especially now,” said Sergio Fedelini, vice president for the Mediterranean Shipping Co. (USA) Inc., one of the Port of Charleston’s largest customers.
“But to keep the momentum going and be successful in the future, we’re going to have to think outside the box, and make a commitment to working together on a wide range of cargo-related issues.”
The primary reason the Port of Savannah is awash in distribution centers today is that successive governors and the state Legislature have made a commitment to soliciting the distribution center business and to building infrastructure that makes it easy for companies to decide to locate there.
Gerald Bresnihan, director of import clearance at C.H. Powell Co. in Charleston, worked in Savannah for more than 10 years.
Savannah’s advantage
In his view, one of the advantages Savannah has had in regard to luring distribution centers is the lower cost of land.
“Their primary terminal, the Garden City Terminal, is 10 to 15 miles outside of Savannah. It is near the airport and land is cheaper,” Bresnihan said. “That is not a deal killer for Charleston, but it helps (Georgia’s) cause.
“The other is the political reality. The state of Georgia supports their port to a larger degree than does South Carolina. They use taxpayer money or issue bonds for their capitalization projects. The S.C. State Ports Authority gets no assistance in that fashion.”
While Bresnihan admitted he’s not privy to the deals Georgia lawmakers offer companies that eventually open distribution centers there, “the perception is that they are offering much greater incentives.”
Because the Charleston community is reserved at best in its reactions to the warehousing and logistics industry, politicians are slow to “sound the trumpet” in regard to the jobs and commerce distribution centers would bring to the state, Bresnihan said.
“If we are to attract more distribution centers to our area I think we need the support of the state, via financial incentives,” he said. “Our local politicians have to publicly go out on a limb and say, ‘Yes, we want this type of commerce’ and the community has to once again embrace an industry that has sustained us for centuries.”
But that’s not to say Charleston has been in a state of suspended animation in regard to the distribution center disparity.
Creating room
Several members of the maritime community said the SPA’s efforts to move loaded containers off its piers faster and to limit the number of empty containers that steamship lines can keep on terminal grounds has created additional room on the water’s edge that could be attractive to distribution center operators looking for space through which to move their cargo.
In addition, through the economic development initiatives of Berkeley County, the Jedburg exit off Interstate 26 has become a distribution center development mecca.
Currently, at least five developers, including the Rockefeller Group Development Corp., Hillwood Development and Eastway Development, have either secured or are active in the process of developing roughly 1,600 acres in the area.
Over the next decade, local maritime executives believe, available space for use by the Wal-Marts, Home Depots and Lowe’s of the world could nearly double over the next 10 to 15 years.
Redefining the rivalry
Michael Fowler, president of the Rogers & Brown logistics firm in Charleston, said he believes redefining the rivalry between Charleston and Savannah is far more complex than just the perception that one port has adequate warehousing and distribution services and the other does not.
“I think, in light of state subsidies that have allowed the Port of Savannah to become something of a magnet to distribution centers, the old paradigm of cargo following vessels has been turned on its head.
“It now seems that cargo may be hitching a ride to the port with the largest volumes of freight,” Fowler said. “Although I have no figures to confirm this, we have seen more cargo terminating in Savannah, and then trucked to Charleston or to the ultimate customer, that were previously destined for the Port of Charleston on a vessel bound to Charleston. Is this concept a sustainable one? Time will tell.”
Charleston’s advantage
“But I’ll tell you, I believe Charleston has a number of inherent advantages over Savannah. One is that our terminals are located so much closer to the ocean than Savannah’s.”
The other advantage is Charleston’s long history of port productivity due to the combined efforts of the SPA, labor, freight forwarders and customs brokers, truckers, warehouse operators and many others, he said.
Asked whether he believed the SPA has done everything it could to promote and accommodate potential customers of the Port of Charleston, Fowler said, “I would be the first to admit that all of us could do more.
“The SPA is somewhat limited by their financial resources and political structure, making it awkward to lobby on their own behalf if they have a governor or legislative group that is neutral at best or uncooperative at worst,” he said.
“Also the local logistics community must play a large part in making certain that the political leaders understand the value of the ports and that they work with the communities impacted to provide proper barriers and lessen the impact port-related development has on our quality of life.”
Working with government
Jimmie Gianoukos, president and CEO of ATS Logistics Inc. in Charleston, also believes the private sector and the officials who represent them should be working more closely together.
“All powers associated with luring this investment to our state have to be as creative as possible and work aggressively together to make these opportunities happen,” Gianoukos said.
“What we are talking about here is not just a local campaign, but has to be a regional as well as a statewide campaign. If the private and government sectors get together and build it, they will come. There has to be a significant area of cooperation between these two sectors.”
Gianoukos said businesses investigating the Lowcountry want to feel comfortable that these two sectors are on the same page.
“Businesses, like people, migrate to where they’re made to feel most comfortable,” he said.
Dan McCue is a staff writer for the Business Journal. E-mail him at dmccue@charlestonbusiness.com.
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