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Enhanced inland infrastructure may curb congestion
By Dan McCue
Staff Writer
Ports did a good job responding to escalating trade volumes in the early part of this century, but if the industry is going to avoid a congestion crisis in the future, more must be done to improve inland infrastructure, according to Jim Newsome, vice president of the Hapag Lloyd Steamship line.
Speaking during a session on inland port development at the Port Productivity Conference in April, Newsome described the inland infrastructure as the weakest link in the nation’s supply
chain.
“While cargo volumes are currently down due to the slowing economy, there’s no question surging imports will resume once the current turmoil is over,”
Newsome said. “Unfortunately, many of us believe that the infrastructure in place won’t be up to the challenge of managing the flow of imports.”
As for inland ports, he said they won’t help to relieve the pressure on ports unless they are carefully planned, have hours of operations to complement those of the waterside port facility, and keep cargo and stored empty chassis from piling up.
In the short term, Newsome said port-to-port shipping of goods could reduce some of the wear and tear and congestion on inland infrastructure, road and rail systems he predicted will take hundreds of millions of dollars to fix. Long-term fixes will be harder to achieve, he said.
Local resonance
Newsome’s remarks had a particular resonance here in Charleston, which will soon be within an hour’s drive of several large logistics parks and several smaller business parks with warehousing.
In recent years Charleston has seen its cargo volume decline while rival Port of Savannah in Georgia has experienced double-digit growth. A big reason behind that growth is the number of distribution centers that have been built adjacent to or within a short drive of the Savannah port’s massive Garden City facility.
Yet, recent investments in South Carolina by companies like The Rockefeller Group, Hillwood Properties, Jafza International and others are seen by many as leveling the playing field between the two states.
While Newsome was pessimistic about the benefit of inland ports, other conference speakers said those benefits can be realized — so long as rail assumes a bigger role in hauling cargo out of the Lowcountry.
Carl Warren, director of business development for CSX Intermodal, said investment in rail is a classic chicken and egg situation. As the population has boomed in the Southeast, the cities of Charleston, Jacksonville, Fla., and Savannah have emerged as key gateways into the nation.
“As a result, I think we have seized the opportunity before us,” Warren said. “The Northeast is already constrained, but the South still represents plentiful opportunities. Its population is growing, ensuring that we see a market we need to serve from the East and the West, but it hasn’t maxed out the capacity for growth.”
Warren said given the rise of distribution centers in Savannah and soon around Charleston, CSX has committed itself to improving the economics of short-haul rail for East Coast imports.
Effective connections
“At the same time that these inland facilities are being built, CSX is committing itself to making its connections to these gateways more effective,” Warren said.
In the past, utilizing rail to move freight was most economical over the long haul. Fred N. Stribling, vice president of sales and marketing for the S.C. State Ports Authority, asked if the panelists could identify the optimum distance between a port and an inland port.
“It’s different for every company,” said Peter A. Crosby, principal of CGR Management Consultants’ supply chain practice. “You have to have all the demand data of their product line, know who and where their customers are, and know where their suppliers are.
Unfortunately, there’s no easy answer. There is no one-size-fits-all solution.”
Dan McCue is a staff writer for the Business Journal. E-mail him at dmccue@scbiznews.com.
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