Following near-record growth during the first half of its fiscal year, the State Ports Authority could be due for a slowdown over the next six months.
“That (growth) is not going to be duplicated in the second half,” Jim Newsome, the SPA’s president and chief executive officer, told the agency’s board of directors Wednesday. “You’re not going to see double-digit volumes forever. I hope I’m wrong, but I think we’re going to see more modest growth.”
The SPA reported a 14 percent year-over-year increase in container volumes during the first half of its 2015 fiscal year, which ended Dec. 31. That compared with a 5 percent growth in container volumes between the first halves of the 2013 and 2014 fiscal years and puts the SPA on track to handle more than 1 million containers for the second consecutive year.
The increase “reflects growth in a number of business segments, including import parts and components for automotive manufacturing and export grains and refrigerated cargo,” Newsome said.
The second-half numbers, however, could drag because of a short-term decline in exports. The dollar’s strong value against the euro is making it more expensive to buy U.S. goods overseas, and low fuel prices are hurting oil-dependent economies such as those in the Middle East, Africa and Russia. There also is instability is some emerging economies, such as China.
Also affecting the second-half numbers will be the SPA’s strong performance last spring — the higher targets likely will result in lower percentage growth.
Even with a second-half slowdown, Newsome said he expects the SPA to double the performance rate of the nation’s ports as a whole, continuing a half-decade trend. In the five years leading up to fiscal 2015, the SPA experienced 51 percent growth in container volumes compared with 25 percent port growth nationwide.
Newsome said he expects the ports authority to finish fiscal 2015 with a 6.8 percent growth rate, which still would double the national average.
In addition to the numbers, Newsome said the SPA is operating more efficiently than most other ports.
“The Port of Charleston is congestion-free and works exceedingly well,” he said. “Of the 10 major ports in the country, about seven of them work terribly, and there are three that work pretty well — and we’re one of them.”
Part of that efficiency, Newsome said, is due to extra hours added this year to the port’s gate schedule to benefit truckers who move containers to and from ships.
The port this month started opening at 6 a.m. instead of 7 a.m. and Newsome said truckers are averaging about 300 moves during that extra hour. The port will add Saturday hours of 8 a.m. to 5 p.m. beginning Feb. 7.
“The truckers really appreciate it ... They see us as allies of theirs,” Newsome said, adding that truckers are a key to keeping freight moving smoothly. “In a 5½ percent unemployment environment, they could sell their trucks and go build houses just as easily. We don’t need that to happen. We need to help them any way we can.”
Noncontainerized “break bulk” cargo volume also was strong in 2014, with 830,189 tons of goods handled in Charleston and Georgetown. The “roll-on, roll-off” segment gained 15 percent, driven by nearly 41,000 additional South Carolina-made BMW vehicles that were exported though the Columbus Street Terminal in Charleston.
Barbara Melvin, the SPA’s vice president for external affairs, also highlighted the release of the Army Corps of Engineers’ draft Charleston Harbor dredging study as a major milestone of 2014. The federal permitting agency’s final report is scheduled to be completed by the fall.
“The deepening of the Charleston harbor to 52 feet will support the continued growth and competitiveness of our port and foster economic development opportunities across South Carolina,” Newsome said.
Port officials have said a deeper shipping channel is necessary to accommodate the growing global fleet of longer, heavier cargo vessels.
Reach David Wren at 937-5550 or on Twitter at @David_Wren_