Report: Charleston's port is fastest-growing in U.S.

The Wando Welch Terminal in Mount Pleasant is the State Ports Authority's busiest hub for containerized cargo.

The Port of Charleston is the nation's fastest-growing seaport, according to a study released this week, but it wasn't long ago that the facility was in danger of becoming an afterthought for East Coast shippers.

“When I came to the port, we had lost a lot of business,” said Jim Newsome, chief executive officer of the State Ports Authority, which operates the port. “We had lost 40 percent of our container market, and we were at a crossroads. There was a real risk that we wouldn't be a container port.”

Newsome was the former president of Hapag Lloyd, the world's fifth-largest shipping firm, when he arrived in Charleston on the tail end of the recession in September 2009. Since that time, Charleston's cargo volume has grown 52 percent compared with 25 percent growth at ports in the rest of the country.

“We worked aggressively, got our contracts competitive and we were successful in getting big ship service,” Newsome said. “But really, what the port is about is growing the cargo base. Ships go to where the cargo is.”

South Carolina's manufacturing boom — including BMW, which moves 800 cars every day through the Port of Charleston, along with Westinghouse, Daimler and tiremakers Goodyear and Giti — has provided the cargo. Meanwhile, Newsome and his staff have taken measures to avoid the congestion plaguing competing ports and to improve infrastructure that makes the distribution chain run smoothly.

“The SPA is midway through a $2 billion capital improvement program involving the deepening of the harbor, highway improvements and the construction of a new terminal, a new intermodal container transfer facility and an inland port in Greer,” according to this week's report from the commercial real estate giant CBRE Group.

There are plenty of opportunities ahead, according to the firm's analysis, which ranks North American ports based on their infrastructure capabilities and the strength of the area's industrial real estate market.

While Charleston is the fastest-growing port, CBRE ranked it No. 7 in the nation, one spot behind the Port of Savannah. Despite labor problems that practically shut down the Port of Los Angeles earlier this year, that facility took the top spot.

Charleston has traditionally handled imports and exports to European countries, but the report shows “traffic to and from Asia is rising rapidly.” Such traffic could expand further when the Panama Canal expansion is completed next year, allowing larger ships to make the passage.

The SPA's inland port in Greer, which opened last year, provides a distribution hub that is within 500 miles of 100 million consumers and brings more cargo to and from Charleston than a similar-sized port would normally see. Rail service ships exports like BMWs to the port and then hauls cargo containers destined for inland markets back to Greer. Newsome expects the facility to handle 100,000 container lifts by the end of this decade and there already is talk of expanding the inland port onto 35 additional acres the SPA owns at the site.

There also are challenges.

“As for many port cities, significant development constraints arise from being adjacent to a large body of water,” the CBRE report states. “Charleston is a small industrial market and does not have the institutional interest that major markets do. It has several industrial parks, but none are immediately adjacent to the port.”

Newsome said ports in the Southeast will continue to grow faster than the national average because people and manufacturers are attracted to the region.

“The Southeast is a good place to be in the port business, primarily because our ports work,” he said. “We aren't saddled by the congestion at ports north of us. The best way you contribute to sustainability in a port is to get the trucks in and out fast.”

Newsome said there have been several keys to the Charleston port's resurgence. The first is making sure any cargo that should go through the port does go through the port.

“For example, cargo from Charlotte should move through Charleston,” Newsome said, adding that ports of Charleston's size can't afford to lose cargo within their region to another facility.

The second key, he said, is making sure the port has a competitive profile in places beyond where regional cargo is based — the Midwest or Gulf Coast, for example.

“We have to make sure those people know who we are and the services we provide,” Newsome said.

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Private-sector investment is important, too. The Port of Charleston, for example, has lured a trio of private refrigerated warehouse companies to this area that will boost the amount of available cold-storage space from its current 50,000 square feet to 600,000 square feet by next year.

Large economic development projects are the final piece of the puzzle.

“There's no substitute for a BMW making a billion-dollar investment or a Michelin making a billion-dollar investment because those investments are heavily import- and export-related,” Newsome said. “Manufacturing is a huge multiplier for a port. It's an essential part of how you grow.”

Ports nationwide are expected to see a slowdown in coming months due to a stronger dollar — which makes exports more expensive — and declining consumer demand in emerging economies. Still, Newsome said Charleston can weather those pitfalls and continue to grow at twice the national average.

Newsome will know if he's been successful if the Charleston port avoids publicity.

“The best port is the port that nobody talks about” he said, “because that means it works.”

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