With an inland port rail network stretching from the coast to the Upstate, the Port of Charleston gets high marks in a new report comparing the strengths of logistics networks and real estate markets serving North American seaports.
The port is No. 8 in the annual ranking by CBRE, a big commercial real estate firm. While that is down from No. 7 last year, the drop is due to gains from other ports and not because of any weakening at the State Ports Authority.
“Charleston has continued to be one of the leading ports in North American cargo growth,” said Robert Barrineau, senior vice president of CBRE’s Charleston office.
The Port of Charleston had the nation’s third fastest-growing rate of cargo shipments last year, with a 10.1 percent increase over 2014. Only ports in Savannah and New York-New Jersey grew faster.
The inland port in Greer, a key part of the SPA’s logistics network, has created opportunities for warehouses and distribution centers along the corridors of U.S. Interstate 26 and I-85, such as the 1.5 million-square-foot building that Dollar Tree is building in Cherokee County. The inland port also has helped Greenville become one of the nation’s fastest-growing industrial markets, the report states.
“This small manufacturing town is quickly transforming into a key distribution location,” the report says of Greenville.
The announcement this month of another inland port planned for Dillon in the Pee Dee region promises to do the same along U.S. Interstate 95.
Charleston’s industrial market is described by CBRE as “becoming more robust,” with manufacturing announcements by automakers Mercedes-Benz Vans and Volvo Cars and suppliers to aerospace giant Boeing Co. creating a more diverse real estate base.
“Charleston’s industrial market is very active, and the land constraints associated with being located adjacent to a large body of water are prompting an increase in speculative development,” the report states.
Barrineau said about 1.2 million square feet of speculative space — buildings without a committed tenant — has been built in the Charleston area over the past year, with demand continuing to grow.
There also is growing diversity in the types of cargo moving through the Port of Charleston.
Noncontainerized “breakbulk” cargo — such as vehicles, metals and steam generators — is running 32 percent ahead of expectations this year. Shipments of frozen meats has grown 38 percent over the past five years. And a growing worldwide demand for plastic pellets used in fuel, windshields and other products has attracted warehouses where the product is transloaded from producers in Gulf Coast states to exporters at the Port of Charleston.
“The resins industry continues to attract users and third-party logistics providers and Charleston provides an excellent point where rail and seaport meet to service the export market,” Barrineau said.
The Port of Charleston has North America’s sixth-best infrastructure ranking, unchanged from last year’s report. That ranking is based on a port’s cargo volumes and growth, number of container terminals, number of Class 1 railroads serving the facility, depth of the shipping channel, number of cranes and other factors. Charleston’s ranking should improve in future years as a $2 billion capital improvement program — including a new container terminal, a new rail transfer yard and the deepest harbor on the East Coast, at 52 feet — is completed by the end of the decade.
CBRE puts Charleston’s real estate ranking at No. 11, also unchanged from last year. That’s based on growth potential, market size, availability of existing space, demand activity, growth in rental rates, projected construction rates and other factors.
The Port of Houston made the biggest jump in this year’s report, leapfrogging five spots to No. 5. Houston saw cargo growth of nearly 10 percent in 2015, driven by strong petrochemical exports and the impact of a growing trend of cargo bypassing West Coast ports for those farther east. The city’s industrial real estate market remains strong despite slumping oil prices.
The Port of Savannah also gained a couple of spots, to finish at No. 4, due to its 11.7 percent year-over-year growth in cargo — the fastest growth rate in North America. Despite that, CBRE says the outlook for Savannah is mixed.
“As a river port with shallow depths and narrow turning lanes, receiving the larger ... ships may prove difficult,” the report states.
That is one area where Charleston will have an advantage. Once its harbor dredging project is completed, the SPA can accommodate vessels carrying up to 14,000 containers regardless of the tide.
Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_