The Port of Charleston's record cargo levels can be attributed in large part to one factor — nothing.
Empty containers have accounted for nearly 23% of all containers loaded on and off of ships that have visited the port's terminals this fiscal year, which started in July. That's 501,010 cargo boxes filled with nothing but air over the last 11 months — a 36.1% increase over the number of empties crossing the terminals during the same period a year earlier.
Empties have helped the port set monthly cargo volume records eight times this fiscal year.
That's not necessarily a bad thing financially, because the State Ports Authority gets paid the same amount whether a container is empty or filled to the brim.
But empties are an indication of trade imbalances — in this case with China, the port's largest trading partner.
The number of loaded containers imported to Charleston has increased by almost 10% from last year as many Chinese businesses have front-loaded shipments to get ahead of the Trump administration's increasing tariffs.
Jim Newsome, the authority's president and CEO, also attributes a strong U.S. economy for the import surge as American consumers have been in a buying mood the past year.
Meanwhile, exports have dropped by 3% year-over-year at Charleston, which is largely dependent on a manufacturing sector that's slowing down. The Institute for Supply Management's gauge of manufacturing activity, for example, fell to 52.1 last month — its lowest level in 2½ years. The upshot is that some of the surplus containers have to be sent back abroad, even if they're unfilled, to accommodate future U.S.-bound imports.
Retaliatory tariffs from China have also hit agricultural commodities, such as soybeans, that leave Charleston for foreign markets.
"Plus it seems like China is consuming less based on the figures they report," Newsome said.
Other ports are experiencing similar trade patterns. The Port of Virginia has seen a 21.2% increase in empties this year while empty containers rose by 20% at the Port of Los Angeles last month.
Philadelphia-based Equus Capital Partners is planning a speculative warehouse and distribution center to take advantage of freight moving through the State Ports Authority's inland port in Dillon County.
The first phase of the 95 Inland Port Logistics Center will include a 373,100-square-foot building with direct access to Interstate 95. Construction is scheduled to begin during the third quarter of this year with completion in 2020.
A future second phase on nearby property could include multiple buildings totaling 1.5 million square feet, the company said.
The authority's inland port is minutes from the property and provides direct rail access via CSX Corp. for cargo moving to and from the Port of Charleston.
"Equus believes in the inland port model and the need for users to want to utilize this type of facility to service the growing population throughout South Carolina and North Carolina," said Dan DiLella Jr., senior vice president.
Bob Barrineau and Brendan Redeyoff of CBRE Inc.'s commercial real estate group and Drew Chaplin of Palmetto Commercial Real Estate are in charge of leasing the Equus property. They are based in Charleston.