Maersk to stay

Following months of often tense negotiations, the State Ports Authority and the world's largest container carrier announced an agreement Thursday evening to reverse the decision to sever ties at the end of next year.

New SPA chief executive Jim Newsome delivered the news at his first State of the Port address, an annual Propeller Club of Charleston event and Newsome's formal introduction to the maritime community. A record 550 people came out for the $95-a-plate dinner held at the SPA's cruise terminal off Concord Street.

Even if the state of the port this year reflects exponential cargo declines that took Charleston back to decade-old volume levels, the crowd came to celebrate. Diners whistled and clapped and stood smiling when Newsome spoke about the Maersk deal.

Looking toward Maersk officials at the candle-lit tables, he said, "There could not be better news on this wonderful evening, and we thank you for your confidence in Charleston. We look forward to growing your presence here."

The new contract between the SPA and Denmark-based Maersk

Line runs through the end of 2014. Company officials, in a prepared statement, said the arrangement "places Maersk Line's cost structure in Charleston on a level playing field with other ocean carriers who use the port."

The Maersk discussions ramped up more than a year ago when the container carrier could not reach a cost-saving agreement amenable to both the SPA and the International Longshoremen's Association. Facing a volume decline, Maersk hoped to save money by moving into the so-called "common-use" area of the Wando Welch Terminal, where SPA workers would perform jobs that otherwise fall to pricier union labor.

Maersk's old contract had provided for a certain amount of space and staffing at the Wando Welch Terminal and required the SPA to buy more than $8 million in equipment for the shipping line. Then the market plummeted.

The three local maritime unions rejected Maersk's cost-cutting proposal in December, and the company responded by announcing it would strip all services from Charleston by the time its contract runs out at the end of 2010. By March, Maersk's calls to the Port of Charleston dropped by nearly half.

Under the newly inked deal, Maersk will remain in a dedicated part of the Wando Welch Terminal, though it will occupy a smaller space.

In the end, the ILA did not make any concessions. ILA Local 1422 President Ken Riley declined to comment on the negotiations but cheered the news Thursday night.

"We know that the port is going to grow; the volumes are going to grow," he said.

SPA officials would not share specifics of the new arrangement.

State Sen. Larry Grooms, R-Bonneau, helped facilitate discussions between the involved parties and said he was "disappointed the ILA did not give as much.

"The bottom line will not be as profitable in the near term as in the long term," he said.

But Grooms said he worried that other container carriers would have followed Maersk's lead if it departed Charleston completely, since the company claims 15 percent of the world market share.

"I've been waiting for this day for more than a year," he said. "This could have been a downward spiral we wouldn't have been able to recover from."