BMW, Michelin and other Upstate freight customers are on track to push the SCPA’s inland port to 100,000 lifts by 2017 – now the Greer facility is the catalyst for a new port in Dillon
A colorful array of cargo containers sits neatly stacked on the asphalt pad of the South Carolina Ports Authority’s (SCPA) inland port in Spartanburg County.
More than 200 miles separate the 100-acre site from the Port of Charleston, a hub of activity for massive ships carrying materials that feed Upstate industry and ferry cars, automotive parts, tires and other goods to worldwide markets.
When the $50 million inland port was launched in 2013, officials said it had the potential to handle up to 100,000 containers annually by 2018.
But usage by customers, including BMW, Michelin, Adidas, Tennessee-based Eastman Chemical Co. and others, has pushed the inland port to nearly reach that capacity in less than three years.
And with companies like Rite Aid and Dollar Tree ready to join the list of the facility’s users, the ports authority anticipates it will exceed the 100,000-lift threshold during its 2017 fiscal year.
“This is a volume-oriented business,” said Jim Newsome, president and CEO of SCPA. “I consider this a real success. We had two objectives with this facility. The first was to take an existing book of business and get it on an intermodal rail. The second was to be a catalyst for economic development. I think we have done that.”
Newsome said there are still about 25 acres at the inland port site near Greer that can still be utilized for expansion.
Growth in Upstate manufacturing and distribution, and recent developments in global shipping, could see that acreage be put to use in the near future.
According to a report by the commercial real estate firm CBRE Inc., there is more than 5.7 million square feet of industrial space under construction in the Upstate.
CBRE said the region is becoming increasingly attractive to outside investors because of its growth and its potential to benefit from the widening of the Panama Canal.
Newsome said SCPA will spend the next year working on ways to maximize the inland port’s existing operations. If more capacity is needed, the ports authority could expand the facility in 2018, he said.
“Our first step is to optimize our operation,” Newsome said. “When we run out of room, we will look at expanding.”
Hard work ahead
Other developments within the ports authority’s system could also bring more jobs and investment to the Upstate.
Newsome said the SCPA has aggressively pursued opportunities to strengthen the Port of Charleston as a leader, not just in the Southeast, but also across the globe.
“We have accomplished a lot,” Newsome said. “I think we correctly assessed the trends in the industry in terms of the deployment of bigger ships… I’m very proud of what we’ve accomplished, but there’s a lot more to accomplish. We have five years of really hard work ahead of us and we don’t have any time to waste. I’m very optimistic about the future.”
The ports authority and state plan to spend $2.2 billion to increase the port’s competitiveness as part of a 10-year capital plan.
Improvements include a deepening of the Port of Charleston to 52 feet by 2019. On Thursday, Sept. 15, the U.S. Senate passed the Water Resources Development Act of 2016. The legislation, which includes authorization for the 52-foot Charleston Harbor Deepening Project, will go to the U.S. House of Representatives for final approval.
According to the SCPA, the project will increase the harbor’s depth from 45 feet to 52 feet in its main channel and from 47 feet to 54 feet at its entrance channel, making it the deepest port on the East Coast. Construction is expected to begin in 2017.
The ports authority is also in the process of building the 280-acre Hugh K. Leatherman Sr. Terminal at the Port of Charleston, which is expected to boost the state’s port capacity by about 50 percent when it is completed. The first phase of the project, which will encompass 171 acres, is anticipated to open in 2019.
SCPA is updating its Wando Welch Terminal, including the installation of four 155-foot cranes by 2017 to handle the larger ships that are expected to flow through the Panama Canal.
On to Dillon
On Monday, Sept. 12, the ports authority announced its plan to build a second inland port in Dillon County by the end of 2017.
The facility, which will utilize an existing CSX rail mainline, will be located at the Carolinas I-95 Megasite about 2.5 miles south of Dillon on Highway 501.
It is expected to initially handle 45,000 containers per year, according to the SCPA. The association has not yet released details about acreage or investment. However, on Sept. 7, the ports authority’s board approved a resolution authorizing the SCPA to spend up to $40 million on the project.
The 280-acre Hugh K. Leatherman Sr. Terminal is under construction. SCPA expects the facility to boost its capacity by 50 percent. The anticipated opening of the terminal’s 171-acre first phase is 2019.
Newsome said there are only a handful of high-speed intermodal rail lines in the state. When the SCPA was seeking a site for its second inland port, Dillon made the most sense because it could serve businesses along the Interstate 95 corridor in northern South Carolina and southeastern North Carolina.
“We think Dillon is an ideal location,” Newsome said. “We think there is more than a sufficient cargo base to make that a success… I don’t think it will ever be as big as Greer, but it will be a significant size and have a lot of economic development potential. I’m feeling very confident about our projections.”
Leaders in Dillon County are also excited about the project.
“According to a recent economic impact study, port-related jobs pay 40 percent higher than the statewide average,” said Dillon County Council Chairman T.F. Finklea in a statement. “We are excited that Dillon is the site of the next Inland Port and look forward to building a strong partnership with the South Carolina Ports Authority.”
More volume, more revenue
The SCPA said its revenue increased 7.3 percent during its 2016 fiscal year to $211.2 million, compared with $196.8 million in 2015. But operating costs increased 8.1 percent to $179.9 million during the year, compared with $166.5 million during the previous year.
SCPA said its earnings for 2016 were $31.3 million, a 3.2 percent increase compared with $30.3 million a year earlier. Port operations facilitate 187,000 jobs throughout the state, according to a 2015 economic impact study by the University of South Carolina Darla Moore School of Business.
Container volume increased 1.4 percent to 1,943,170 units during the year, compared with 1,916,379 in 2015.
Breakbulk cargo, or non-containerized items, increased 3.4 percent to 901,974 tons, up from 871,914 during the previous year.
In June, SCPA said it anticipates a 6 percent increase in pier container growth during its 2017 fiscal year. The ports authority said it anticipates its operating earnings will increase 30 percent to $40.8 million, compared with $31.3 million in 2016. SCPA also said it anticipates strong growth at the inland port in Greer, with rail moves expected to increase 23 percent in 2017, compared with 2016.
Charleston ranked No. 9 out of the top 10 U.S. container ports in terms of volume in 2015. The port had a 10.1 percent growth in volume in 2015, according to the American Association of Port Authorities.
The nearby Port of Savannah was the fourth-largest U.S. port on the list. Its tonnage increased 11.7 percent last year.
But Newsome said he remains bullish about the Port of Charleston because of the infrastructure supporting it and its ability, as the deepest port on the eastern seaboard, to handle larger vessels.
“The east coast and Gulf ports are where the action is today,” Newsome said during his State of the Port Address on Monday, Sept. 12. “It’s where growth is in this country in the port business. And I further believe that the Southeast is the best place to be in the U.S. port business today because we have a combination of import growth driven by population and export growth given by the robust investment in manufacturing that we have had and that we think will come in the future… I think this story will play itself out over time as more cargo comes to the east coast because of the expansion of the Panama Canal and the many opportunities that are here.”
Other state and local leaders also believe that South Carolina’s maritime and logistics industry will continue to boom. They hope it will continue to fuel and be fueled by economic development in the state’s manufacturing and distribution sectors, which are largely based in the Upstate.
“The Port of Charleston has changed South Carolina forever,” said Spartanburg County Councilman David Britt. “We’ve gone from a largely agricultural and textile state to a manufacturing mecca… BMW, Boeing, Volvo – a lot of these international and national companies are here because of the port.”
Britt, who grew up on a tobacco farm in Dillon County, said the Upstate’s inland port has been an asset to the region. He said he hopes inland port in Dillon will have the same impact on that community, surrounding counties and the region.
“Success breeds success,” he said. “Michelin is making a $350 million investment in Spartanburg County right now because of the inland port… The inland port in Dillon is necessary and needed. I think it’s going to have a big impact… It will draw attention and opportunities.”
