S.C. focuses on logistics

The state needs a master plan that takes into account all of South Carolina’s major transportation assets, including the Port of Charleston (above), roads, rail lines, distribution centers and airports, according to Bobby Hitt, the new S.C. Secretary

COLUMBIA -- You've got to be able to move goods to create jobs.

But South Carolina lacks a comprehensive master plan for its transportation, distribution and logistics systems -- the highway which high-end manufacturers such as BMW and Boeing use to get their products to markets around the world, new S.C.

Secretary of Commerce Bobby Hitt said Wednesday. That plan should address better integration of the Port of Charleston, roads and rail, distribution centers, land ports and airports, as well as a strategy for the future, he said.

"Good ideas attract money, but we don't have a plan," he said at a transportation, distribution and logistics summit in Columbia. "We must commit to a master plan to get these dots connected."

South Carolina has lost badly the race with Georgia and Virginia in attracting large, import-based distribution centers, such as Home Depot and Wal-Mart Stores Inc. As a result, traffic at the port of Charleston plummeted 37 percent from 2004 to 2009, dropping it to ninth in the nation from fourth.

During the same time, shipping at the port of Savannah rose 42 percent, increasing its rank in the nation from fifth to fourth.

Charleston's slip means that, despite its prime location on the East Coast, the state has failed to create distribution jobs that were within reach, experts have said.

"I don't like that two states were building (distribution centers) and we weren't," Hitt told the audience of business people and policy makers at Columbia's Capital City Club. "But I don't think the reasons are good ones."

Hitt, a former managing editor of The State newspaper and spokesman for BMW, was appointed by Gov. Nikki Haley in December. The summit was sponsored by New Carolina, a public-private partnership that serves as the state's Council on Competitiveness.

South Carolina's problems in recruiting distribution centers began in the late 1990s, based on a common misconception.

Distribution centers drive shipping, not the other way around.

But the port of Charleston had focused on courting and retaining shipping firms, rather than working closely with state and local officials to recruit customers -- the large retailers who would go on to build or lease huge distribution centers to get their goods to the then-exploding Southeastern market.

While state and port officials quarreled over a new terminal and busied themselves with the needed work of dredging and building a new Cooper River bridge, Georgia and other states were busy acquiring land and building infrastructure.

Meanwhile, with the support of their state and local governments, the Port of Savannah and the twin ports of Norfolk and Suffolk, Va., worked with developers to nail down key properties along nearby interstate highways, improve interchanges, install infrastructure and lay the foundation to reel in the distribution center expansion to come.

As a result, Savannah landed the lucrative 1.5 million-square-foot Home Depot distribution center. It also boasts Wal-Mart, Target, Sears/Kmart, Lowe's and IKEA. Ships followed.

Meanwhile, container traffic in Charleston dropped, and shipping to Savannah skyrocketed.

The loss of the import race affects exports as well. All those ships coming in fill up before they leave.

From 2004 to 2009, the number of containers as measured in 20-foot increments hauled into and out of Charleston plunged to about 1.2 million a year from nearly 1.9 million, while Savannah's traffic spiked to 2.3 million from 1.7 million.

Hitt, who has been in office only 15 days, said he didn't have all the answers to knit together and improve the state's transportation and distribution network. But he noted that the new leadership at the State Ports Authority, led by CEO Jim Newsome, and finding a compromise for rail access to a new North Charleston container terminal being built on the former Navy base were key.

He also said the state must join the race in creating "big box" space that would attract more import shipping.