The State Ports Authority is winding up a strong and whirlwind fiscal year while looking ahead to slower growth and more heavy spending on projects aimed at luring bigger ships and providing truckers with newer, safer equipment.
The maritime agency also said June 22 that it plans to add about 170 employees to its payroll by next June to keep pace with its growing workload, after putting hiring on pause during the COVID-19 pandemic.
"We're really doing two years of hiring in the upcoming year," said Barbara Melvin, chief operating officer.
The maritime agency is predicting modest growth in its core container business through June 2022 and a slight uptick in automobile exports, according to a new forecast released at its board meeting in Mount Pleasant.
The SPA, which starts its next financial year on July 1, also expects to accommodate about 117,000 seafaring vacationers to Union Pier — compared to zero since April 2020 — as the cruise ship industry awakens from its lengthy COVID-19 hibernation. The projection is based largely on the assumption that the locally based Carnival Sunshine will resume operations in January.
"That is a total wag at this point .. but we do think it will come back," CEO Jim Newsome said.
A year ago, the SPA approved what Newsome called a "clunker budget" with uncertain financial expectations, not knowing how the global health crisis would affect its business and bottom line. As it turned out, the economic lockdown and stay-at-home orders triggered a surge in online retail sales and drove up demand for all kinds of imported merchandise.
Cargo volume at the Post of Charleston has now hit new highs for three consecutive months. In May, containerized imports jumped 46 percent compared to 2020 and were up almost 22 percent from the same period of 2019, which was a banner year for the shipping industry.
"So we're experiencing higher volume than you would normally experience," Newsome said.
The SPA expects its terminals to remain busy over the next year by handling about 1.475 million containers, or about 4 percent more than the previous 12 months, when the growth rate was higher, at about 7 percent.
Newsome said the projected slowdown in cargo reflects the likelihood of a shift in spending after the pandemic.
"What we don't know is, at what point do people consume fewer goods and more services? At what point do you take that second trip to Disneyworld and not buy the refrigerator — or not buy the new couch," he said.
At the same time, Newsome projected the SPA "will maintain the gains" it's already racked up because of growth from new customers. One of the biggest will be the $220 million import center that retail kingpin Walmart will open next year along Interstate 26 in Dorchester County.
"We have some good things in the pipeline," he said.
The agency will keep investing heavily in its operations over the next 12 months. The $349 million spending plan that was approved Tuesday represents a $20 million increase from fiscal 2021.
“We will continue investing in port infrastructure to handle the biggest ships and growing cargo volumes, ensuring S.C. Ports remains a top 10 U.S. container port,” board Chairman Bill Stern said in statement.
The biggest project will be the creation of an state-run chassis-leasing pool set to open next May to provide truckers with 7,400 new trailers to secure the containers they drive to and from the terminals. Steel prices have driven up the cost by $26 million, to $133 million, Newsome said.
"The major thing to know about the chassis pool is it's basically new equipment. ... So we think we are assuring the continuity of the supply chain because every box has to move with a chassis," he added.
The next big-ticket item will be work totaling $53 million on upgrades at the workhorse Wando Welch Terminal so it can better handle the mega-ships that are now commonplace on the waterfront. Another $45 million will be spent on infrastructure at an industrial park the SPA is developing Ridgeville to attract distribution centers that handle imports for the retail industry.
New hires will be an additional expense that will chip away at the SPAs operating cash flow, which is forecast to drop about 10 percent to $100.6 million in the new fiscal year, while revenue is shown increasing almost 7 percent to $325 million.
"With all the volume, we really have taxed our workforce, and we have to get some relief," Newsome said. "We're not even able to run all of the machines ... given the amount of ships that are out there."