Wednesday, August 29, 2012

Growth at Port of Charleston spurs infrastructure expansion in South Carolina

The South Carolina Port Authority recently released its fiscal year report and among the not so surprising details was the fact that the Port of Charleston was the fastest growing top 10 US container port for the first six months of 2012 with volume growth of 7.4% for the period.

Among the leading exporters include global companies such as BMW, Eastman, International Paper and Meadwestvaco.  Kuehne + Nagel and Panalpina are the two largest logistics providers that offer export services through the port. Leading importers include BMW, Michelin, Bentler, Daimler Vans and Deere Hitachi Construction Machinery.

The top tradelanes (based on loaded import and export boxes) have changed little over the years. North Europe continues to be the largest lane representing 30% of total loaded boxes followed by Northeast Asia at 25% and India and Other Asia at 10%.

To maintain its growth, the Port is focused on four strategic priorities – infrastructure development, cargo growth, efficiency and financial sustainability. Indeed, the focus on infrastructure development has received a good bit of press of late. To date, more than $2bn has been committed to new port-related infrastructure including a new container terminal, deepening of the Charleston Harbor to provide all-tide access to post-Panamex ships, widening of Interstate 26 which connects the Port to the upstate, a dual-served intermodal rail facility and the development of an inland port.

BMW’s only US manufacturing facility is located in Spartanburg, South Carolina over 200 miles from the Port of Charleston. Its annual economic impact to the state is about $8.8bn and as a result was instrumental in driving the inland port decision. The facility will be located in Greer – close to the BMW facility. BMW expects to ship by railway from Charleston about 20,000 to 25,000 containers to the inland port annually and will be the anchor tenant once the facility is completed in late 2013.

The inland port is expected to help ease congestion along Interstate 26 as well by converting 50,000 all-truck container moves to multimodal moves.

Not only will BMW benefit, but other companies will as well – including the numerous automobile suppliers that have set up shop around the state. Port officials expect cargo to double the BMW anticipated volumes within just the next few years.

The cost of the inland port will be split between the South Carolina Port Authority and Norfolk Southern with the Port Authority bearing most of the cost and Norfolk Southern responsible for the laying of tracks.

Although the inland port is anticipated to ease congestion along the Interstate 26 corridor, the Interstate 85 corridor will likely become even more strained. Growth along the corridor has greatly expanded over the years. BMW, Michelin and a new Amazon distribution facility are among the growing number of companies along this stretch of road that connects Atlanta Georgia with Charlotte North Carolina. In fact, according to Jim Newsome, President and CEO of the South Carolina Port Authority, “The I-85 corridor centered on the Greenville – Spartanburg area, is projected to be the fastest growing part of the Southeast over the next 20 years. This facility (the inland port) will be a further catalyst to the development of an enhanced distribution hub in this area.”

Next week, in the second part, growth along the Interstate 85 corridor will be explored further.