Memorable year for SCPA, big plans full steam ahead
South Carolina Ports Authority (SCPA) President and CEO Jim Newsome said FY 2015 was a “Memorable Year for SCPA.” With the box business booming, Newsome may well run out of superlatives over the next few years. South Carolina Ports Authority (SCPA) President and CEO Jim Newsome refers to Fiscal Year 2015 as “a memorable year for SCPA.” That’s because with a 14% increase in container volumes, SCPA reached near-record levels of containerized cargo and saw strong volume and good diversification of the breakbulk sector. According to Newsome, the 14% increase builds upon several previous years of above-market growth with strength across all business segments. SCPA operates two seaports: the Port of Charleston, one of the leading seaports on the US East Coast, and the Port of Georgetown, South Carolina’s dedicated break bulk and bulk cargo port. Here are SCPA’s figures in detail: SCPA handled 1.9 million TEUs during the fiscal year (FY2015) that ended June 30, a jump of 231,473 TEUs from the 2014 fiscal year. June volumes provided a strong finish to FY2015 with 169,913 TEUs moved during the month. Pier containers, or box volume, also climbed 14 percent in FY2015 with 138,221 more boxes handled compared to FY2014. SCPA moved 96,916 boxes in June, pushing total fiscal year volume to 1.1 million containers. Worth noting, the SCPA’s Inland Port in Greer achieved a record volume of 58,407 rail moves, surpassing initial volume projections for five years of terminal operations. The monthly volumes peaked in June with 6,736 rail moves handled during the month. The Inland Port, a $50 million SCPA-funded project, opened in October 2013 to improve efficiencies of international container movements between the Port of Charleston, South Carolina Upstate and neighboring states. It operates in partnership with Norfolk Southern. The project utilizes an overnight train service to handle double-stack container trains to and from the Port of Charleston’s seaport facilities. Breakbulk tonnage also exceeded fiscal year planned volumes by 6 percent with 1.4 million pier tons handled during the year. Georgetown moved 548,933 tons of breakbulk shipments during FY2015; Charleston, 871,974 tons. Roll-on/roll-off cargo within the breakbulk sector grew significantly, and SCPA achieved the highest finished vehicle volume ever handled -- 253,338 vehicles for an increase of 15 percent over the previous record of 219,900 vehicles in FY2008. “From an operations perspective, highlights of this year include handling the highest ever month of pier containers in May and Inland Port rail moves in June, all while delivering high reliability and logistics efficiencies for our customers,” Newsome says Strong Fundamentals Overall, SCPA officials attribute its above-market growth in its containerized cargo segment to strong market fundamentals: an improved US economy and increased global trade. While the world economy is difficult to predict, Newsome expects Charleston volumes to continue to grow above the US port market average in FY2016, albeit at a slower rate than the previous fiscal year. “We are planning for 7% TEU growth this fiscal year,” he says. Feeding its growth is the fact SCPA currently receives 11 post-Panamax vessel calls each week. Manufacturing in the Southeast also remains strong, and SCPA provides the deep water required to handle ships fully loaded with heavy exports. The booming automotive sector in the Southeast also supported both import and export volume gains. Successful recruitment of discretionary cargo also plays an important role. A plus is SCPA’s competitive, broad-based rail market that offers ample capacity. As a result, manufacturers producing goods beyond the Southeast region, such as plastics from the US Gulf and agricultural products from the Midwest, are shipping via the Port of Charleston. Another plus are economic development efforts that have resulted in the expansions of Daimler, Kent Bicycle, Volvo, and most recently, Dollar Tree. Newsome maintains that the Port of Charleston’s ability to serve these companies’ supply chains was key to their decision to locate or expand in South Carolina. “Our strategic initiative to grow our cargo base is paying off,” he says. Discount retailer Dollar Tree recently revealed that it is building a $104.4 million, 1.5 million square foot distribution center in Upstate South Carolina, near the Greer Inland Port and the I-85 corridor, expanding its Southeastern logistics footprint. Dollar Tree, which is buying rival discount store retailer Family Dollar, is one of the nation’s largest importers. According to an article in Charleston’s The Post and Courier, Dollar Tree previously has not done any significant business with the Port of Charleston. It cites Zepol Corp., U.S. import and export data provider, which says the retailer historically has sent most of its imports — about 61 percent — through Newark, NJ, Los Angeles and Savannah. Looking Ahead In June, SCPA adopted its FY2016 financial plan, which indicates a strategy for continued growth primarily focused on growing its cargo base. The plan projects pier container volume of 1.15 million boxes during FY2016, a 7.2% increase over projected totals for the current fiscal year. Strong growth at the Greer Inland Port is also planned with rail moves expected to increase 6.9 percent over FY2015 projected totals. Operating revenues in the new fiscal year are planned to increase 9.2 percent, or $17.7 million higher than FY2015 projected revenues. For FY2016, the SCPA Board of Directors also approved capital expenditures of $165.6 million. Of that amount, SCPA will invest $73.3 million over the next 12 months in ongoing construction of its Navy Base Terminal, a new container terminal at the Port of Charleston. According to SCPA officials, the 280-acre Navy Base Terminal, which is currently the only new permitted container terminal under construction on the East or Gulf coast, will increase the Port of Charleston’s container capacity by 50 percent. Phase I is expected to be completed by 2020. Other primary capital expenditures include existing terminal infrastructure improvements, new equipment as well as two new super post-Panamax cranes, and a wharf-strengthening project and upgrades and improvement at Wando Welch Terminal. In September 2014, SCPA was awarded a $10.8 million Transportation Infrastructure Generating Economic Recovery (TIGER) grant for its upgrades and improvements. The TIGER grant represents nearly 13% of the total estimated project cost for upgrading the Wando Welch Terminal, Charleston’s busiest and largest container terminal. To be spread out over two years, the project includes upgrades to structural support of the wharf and fendering system, as well as modifications to crane rails to accommodate two new super-post-Panamax cranes on order for the terminal. Particularly critical and key to the Port of Charleston’s competitive future is the $560 million Post-45 Harbor Deepening Project that will deepen the Charleston Harbor to 52 feet. With the deepest water in the region today, Charleston currently offers a maintained harbor of -45 feet of depth at mean low tide throughout the main shipping channel and -47 feet in the entrance channel. A five to six foot tidal lift provides even deeper access for several hours during the day. The deepening project, which is expected to be completed by the end of the decade, will allow the port to accommodate post-Panamax vessels without tidal restriction. The project is being studied by the U.S. Army Corps of Engineers with the Chief’s Report expected this September.