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Charleston port's new $1B shipping terminal lingers as labor dispute drags on

SC Ports Hugh K. Leatherman Terminal (copy)

The Leatherman Terminal in North Charleston is handling only about 10 percent of its capacity due to a labor dispute between the State Ports Authority and the International Longshoremen's Association. State Ports Authority/Provided

NORTH CHARLESTON — A labor dispute between the State Ports Authority and the International Longshoremen's Association is taking its toll on traffic at the new Leatherman Terminal in North Charleston.

The first phase of the terminal, which welcomed its first ship in April, handled a net 17,385 cargo containers through its first five months of operations. That's about 10 percent of what the $1 billion addition along the Cooper River should have seen by this time.

At the current pace, about 41,725 containers will move through the Leatherman Terminal by its first anniversary — nearly 360,000 fewer than it was built for.

The pace isn't expected to pick up any time soon. Over the next two weeks, just two ships are scheduled to call on the terminal — both of them about half the size of the vessels the site was designed to handle.

The ILA and SPA are fighting over who will operate the cranes and heavy-lift equipment at Leatherman. The union has said its contract with ocean carriers calls for  its members to handle that work. The state-run SPA has said its employees should.

An administrative law judge heard from both sides during a National Labor Relations Board hearing in July, but a ruling, which was expected last month, hasn't been made.

In the meantime, most of the world's shipping lines refuse to dock at the Leatherman Terminal for fear they'll run afoul of their contract with the ILA.

It's been a frustrating situation for the SPA, which was counting on the new facility to take some of the pressure off the Wando Welch Terminal in Mount Pleasant, which has handled 79 percent of all containerized cargo moving through the port this fiscal year. The North Charleston Terminal has moved 14 percent of the cargo with the Leatherman site handling the rest just down river.

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This year's surge in imported cargo — brought on by coronavirus-weary consumers spending more money on household goods rather than restaurant meals and other services — has aggravated the situation. The Wando Welch Terminal has seen a nearly 17.5 percent increase in cargo this fiscal year and is handling an average of more than 13 container vessels per week.

"The Leatherman Terminal provides much-needed capacity and an additional berth to the East Coast port market at a time when the supply chain is very strained," Jim Newsome, the maritime agency's president and CEO, said in a written statement.

He said full use of the new terminal "will make things much more fluid," but only if state employees operate the cranes, as they do at the SPA's other terminals. If union labor operates them, Newsome said, the costs would be prohibitive for shipping lines to use.

The NLRB hasn't said when the administrative law judge will make a ruling, but either side could — and probably will — appeal the matter to the full board for a review, and that could put the Leatherman Terminal's future in limbo for months to come.

There have been 267,887 containers of all sizes moving through the Charleston port's terminals this fiscal year, which started July 1. That is a 24 percent increase over the same period a year ago. Loaded import containers are outpacing exports by nearly 2-to-1.

All of this is happening as the peak fall shipping season kicks into gear, with holiday goods from China making their way to U.S. retailers' shelves. Maritime experts say the flood of imports and the resulting supply chain crunch will last at least until mid-2022, well beyond the typical slowdown that occurs after Lunar New Year. 

 

Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_

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