The May 9 headline proclaimed the news: “Charleston’s port is fastest-growing in U.S.” But hold the champagne and cancel the parades, folks; our port is doing remarkably well, but it has not yet arrived at any competitive Promised Land.
East Coast container ports clearly are growing “faster” than the hyper-congested and labor-conflicted West Coast ports. A national survey last week measured Charleston’s 2014 growth “rate” at 11.9 percent and leading all East Coast ports. Savannah was right behind at 10.3 percent. So, presto — apparently — Charleston is the “fastest growing seaport” in America.
An old port executive once observed, “Statistics are like onions. We pay very close attention to the good ones, but peel ’em back, and they’ll usually burn your eyes.”
From Charleston’s perspective, Savannah’s performance is eye-burning, for sure. The Garden City’s port today handles roughly twice the container volumes as Charleston. Savannah’s reported 2014 “growth rate” might have lagged Charleston’s ever so slightly, but its growth “volumes” are a multiple of Charleston’s.
Current growth rates reported last week by the respective ports tell a similar story. Charleston and Savannah each began new fiscal years last July, just as West Coast ports were struggling with labor unrest and major terminal congestion challenges. As of April 30, Savannah had a 16.3 percent fiscal year-to-date growth rate in container units. For the same period, Charleston’s increase was pegged at 15 percent.
So now which port is the “fastest growing?”
Should we really care?
Are we South Carolinians more concerned about Savannah’s current statistical primacy over Charleston, or more impressed that Volvo and Daimler AG, in recently announcing new Lowcountry manufacturing facilities and 5,200 new jobs, said that Charleston port facilities were important considerations in their investment decisions? Or that BMW annually exports through the port more than 200,000 vehicles manufactured at its Greer plant. That should be a no-brainer.
Here’s the under-reported big news headline: More than ever before in its modern economic history, South Carolina’s progress fundamentally depends on the Port of Charleston — and the port now faces critical challenges to its resurgence. The biggest one is money.
Deepening the harbor channels from 45 feet to 52 feet will cost about $520 million. S.C. Senate Finance Committee Chairman and President Pro Tempore Hugh Leatherman led efforts to escrow $300 million and assure that the ponderous congressional funding processes for such projects would not delay this one. The shortfall looms, and the State Ports Authority has no funding source — yet. Sen. Leatherman consistently assures, “This is vitally important for our state; we’ll get it done.”
The SPA has no firm capital funding plan either for first phase investments at the planned North Charleston terminal. This could be an $800 million build-out, depending on automation options for the new terminal’s design. The new terminal will be connected to the interstate system with the “port access road,” a high-design partially elevated two-mile highway with a price tag now estimated at $260 million. The state has escrowed about $185 million and the SPA is obligated to cover the balance. Add it all up, and we have another headline that should challenge every elected leader to help find solutions: The Ports Authority needs a billion dollars or more to capitalize the strategic projects it needs to connect all the dots of its promising strategic plans. And the state needs billions more to modernize the local and statewide highway infrastructure a world-class Port of Charleston needs to serve South Carolina’s global-based economy.
Clearly our state’s social and economic ambitions are colliding with infrastructure investment imperatives. These are heavy-lifting policy challenges that can no longer be rationalized or ignored — or cornered by political dogma.
At the Ports Authority, CEO Jim Newsome and his team are thinking creatively, working on new pricing formulas and quietly promoting higher Port Authority prices throughout the industry.
A report last week that the authority was talking to the S.C. Retirement System Investment Commission about possible port investments engendered “whistleblower” skepticism. But if all options are on the table, then why not consider state pension systems investments in infrastructure that primes the state’s economy — if, of course, projected returns are adequate?
This concept is neither new nor fanciful. The California system owns a stake in a development company that specializes in supply chain facilities investments. The Alabama system invested in Port of Mobile facilities, and the Ottawa teachers union retirement system owns gantry cranes at the Port of New York and New Jersey. The North Carolina Ports Authority and Virginia Ports Authority have openly considered investment proposals by the company partially owned by the California system.
Since Newsome took the SPA’s reins in 2009, Charleston’s shipping volumes have grown 52 per cent — more than double the industry’s growth as a whole. And the private sector Charleston maritime industry seems reinvigorated and is making timely investments in equipment and human resources.
It would be regrettable if the port’s remarkable resurgence is delayed or upset in any way because the Ports Authority is unable to fund its development plans.
Ron Brinson, a former associate editor of this newspaper, was president/CEO of the American Association of Port Authorities from 1979-86 and president/CEO of the Port of New Orleans from 1986-2002. A North Charleston city councilman, he can be reached at firstname.lastname@example.org.