At a glance
What: The S.C. State Ports Authority is looking to grow its market share with companies in North Carolina.Why: It would feed the SPA’s need to keep pace with revenue to fund capital projects.How: The SPA is touting its deeper shipping lanes and closer proximity to North Carolina destinations compared with North Carolina ports in Wilmington and Morehead City.
About two months ago, Sierra Nevada Brewing Co. tapped the Port of Charleston as the landfall destination for 28 beer brewing tanks shipped in from Germany for its new brewery just outside Asheville, N.C.
The arrival of the craft brewer’s equipment in March drew a media frenzy at the S.C. State Ports Authority’s Columbus Street terminal in Charleston as the large items were loaded onto trucks and driven roughly 250 miles to their final destination in the Blue Ridge Mountains.
The high-profile shipment also offered a snapshot of what SPA officials see as an opportunity to do more business with companies in the Tar Heel State and at the same time enhance South Carolina’s efforts to become more of a regional shipping hub in the Southeast.
Jim Newsome, the maritime agency’s chief executive officer, said the Charleston-based authority needs to continue broadening reach beyond the Palmetto State to “satisfy our growth aspirations in the future and to justify our capital plan and everything around that.”
“Even if we were to handle all the container business out of South Carolina, it’s a state of five million, and that is not enough,” Newsome said. “We have more regional aspirations.”
Newsome said South Carolina is attractive to potential customers to the north in part because of the Palmetto State’s shoreline curvature, which make its shipping terminals closer to some points in North Carolina than the Tar Heel State’s own ports in Wilmington and Morehead City.
Newsome added another attraction is Charleston’s 45-foot-deep shipping channel, which can receive big ships that draft 48 feet of water when the tide is high enough.
By contrast, the shipping lane in Wilmington, the state’s primary port, is 42 feet deep. Morehead City, a port used for noncontainerized cargo, is 45 feet deep.
“For many of the big cities in North Carolina, we are actually the logical port of choice, given the inland costs,” Newsome said. “We see ourselves as the port for the Carolinas”
Deeper waterways are a top selling point among competing ports along the East Coast as shippers continue to send larger vessels to lessen costs, and experts predict the volume will increase more once the Panama Canal is expanded in 2015.
The SPA is positioning itself for the uptick in business, especially with Asian markets, by investing roughly $1.3 billion for new and existing facilities over the next 10 years.
That plan also includes expanding access to potential customers in North Carolina and other neighboring states with a cargo yard in Greer, which is expected to open in September.
The so-called inland port is an estimated $47.4 million project shared with commercial rail hauler Norfolk Southern, which is also building a rail yard near Charlotte International Airport.
The direct railway access for cargo moving between the Upstate and Charlotte could make the region a battleground between the SPA and the Queen City’s inland port operation for the North Carolina State Ports Authority.
South Carolina’s pitch for new business adds to North Carolina’s existing competition from the neighboring Virginia Ports Authority, which has partnered with Norfolk Southern to offer a double-stack rail service between intermodal terminals in Norfolk and Greensboro, N.C.
Industry experts say the Southeast is a highly competitive region as five port operations between Norfolk, Va., and Jacksonville, Fla., are battling for limited market share. The competition has been growing even more fierce as ports in the region battle for federal dollars to deepen their shipping channels to accommodate larger vessels that will be able to pass through an expanded Panama Canal.
The North Carolina Ports Authority could be vulnerable because it’s has one of the smaller operations in the mid-Atlantic and Southeast regions, book-ended by larger counterparts in Virginia and South Carolina.
In 2012, North Carolina ports handled 202,765 20-foot-long shipping containers, compared with the 1.65 million for Virginia ports and 1.22 million in South Carolina, according to The Journal of Commerce, a trade publication.
The North Carolina maritime agency’s spokeswoman did not respond to numerous telephone calls and emails seeking information and comment about the port.
A 2012 report sponsored by North Carolina’s governor assessed the strengths and weaknesses of the state’s port system.
The 274-page study concluded that improving existing operations was a better cost-effective option than building a $6.1 billion deepwater terminal in Southport, which is about 30 miles south of Wilmington.
It also acknowledged North Carolina competes for in-state business with maritime operations in Norfolk, Charleston, Savannah and Jacksonville.
Weaknesses included refrigerated cargo capabilities and shorter operating hours compared with bigger rivals.
“While this has the benefit of containing operating costs, it also limits shippers’ ability to access the port and deliver multiple truckloads in a day — ultimately constraining volumes and making other ports more attractive in terms of trucking costs and ability to move containers,” the report said.
Cost and efficiency remain key selling points for shippers, said Kent Gourdin, director of global logistics and transportation programs at the College of Charleston.
“It has serious implications with inventory and customer service,” he said. “The shipping customer wants to know their goods don’t get hung up.”
Gourdin added that the Greer inland port will be one of the SPA’s biggest tools for recruiting business from competing ports.
“They will basically be selling the improved efficiency of Charleston, and getting the cargo through it and on its way is what shippers care about,” Gourdin said. “Whatever port will do that the quickest is what the customer wants.”
Reach Tyrone Richardson at 937-5550 and follow him on Twitter @tyrichardsonPC.
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