To those outside the shipping industry it might not make much sense, this whole notion that a multibillion- dollar civil works project in Latin America dictates the future of the Port of Charleston.
But the Panama Canal expansion, as State Ports Authority chief executive Jim Newsome explains it, "is a game-changer" and the biggest development since the advent of stuffing cargo into containers.
The reason: Companies began ordering bigger ships that can hold more containers, since the canal will be able to handle them when the expansion wraps up in 2014. The cost savings between a ship that can handle 4,000 boxes and 8,000 comes in at $200 per 20-foot container, according to Newsome.
"It doesn't take twice as much fuel, twice as much crew, to handle a ship with twice as many containers," he said.
So, ships started getting bigger, and that trend didn't wait for the Panama project's completion.
The SPA plans to take a delegation down there for one day next month to tour the canal and to meet its administrator. The group includes six or seven board members, three or four staffers and five or six state lawmakers from the oversight committee assigned to the port. Meeting them will be officials with TBC Corp., a Florida-based tire importer building a 1.1 million-square-foot distribution center near Summerville.
Newsome said the group will get a first-hand look at something that so frequently factors into their discussions and decisions. In return, the delegation will share the port's 10-year plan.
Charleston Harbor now welcomes four ships per week that fit the "post-Panamax" description, meaning they can hold the equivalent of at least 7,500 20-foot long containers. Half the ships crossing the world will fit the description of by 2012, according to the Alphaliner Monthly Monitor.
When the Mediterranean Shipping Co.'s Rita called in February, the 8,085-container ship's visit made headlines as the largest vessel ever to call Charleston. But in the past six months, 18 ships that can hold more than 8,000 containers have pulled into port, and 80 ships drew between 40 feet and 48 feet of water -- already considerably more than the arrival of 52 ships with that draft in 2009.
Because of the draft, harbor deepening becomes crucial to a port's future, and politics comes into play. It's simple science: Big ships need deeper water to reach a port, and the ships keep getting bigger.
The U.S. Army Corps of Engineers, which spends $10 million to $15 million every year maintaining Charleston Harbor's depth, would request money from the federal government to dredge further.
The Corps removes as much as 3 million cubic yards of material annually -- or about three football fields stacked 39 stories high. That's just to keep the existing 45 feet, the deepest in the U.S. South Atlantic region.
The Corps undertook a federally funded, $90,000 study to consider future deepening and recently announced plans to proceed with the next step, a five- to seven-year feasibility study. This phase will determine the best depth, from an economic standpoint, for Charleston Harbor to serve future generations of mega-ships calling the port.
U.S. Rep. Henry Brown, working with fellow South Carolina Congressmen Jim Clyburn and John Spratt, secured $400,000 for the study to begin in 2011, but that funding still must receive Senate approval and then the nod from both houses of Congress.
U.S. Sen. Lindsey Graham made it known that he plans to pursue that money, pointing out that the state stands to be left behind without it.
That's because nearly every other Southeastern port already has started feasibility work. Newsome said Charleston is starting late because of its existing depth. At 45 feet, he said, the harbor can accommodate ships with 10,000 containers when the tide cooperates.
"They don't build ships to handle empty containers. They build ships to handle loads," Newsome added. "Ultimately, we want ships to come in 24-7 without restrictions."
The Panama Canal will operate on an appointment system, meaning tidal or weather delays, such as fog, could put a ship past its appointment window and leave it sitting -- and bleeding money -- for days. By Newsome's estimation, that means Charleston needs a few extra feet of depth.
The canal's expansion includes new locks, widening and deepening the navigational channels. It's expected to change international trade patterns, bringing more ships from Asia to the East Coast.
The shift in ship size and trade patterns comes as the U.S. import-to-export ratio narrows, thanks to the economic downturn. Export products, such as grain, weigh more than imports, such as Asian-made electronics. And plenty of those exports come from the South.
Newsome sees the East Coast developing into three major stops after the Panama Canal expansion: New York to the north, Norfolk, Va., in the middle and, if the right preparations begin now, Charleston to the south.