The Port of Charleston, with its roughly $2.2 billion in improvements and expansions planned by 2020, will be in the best position of any U.S. seaport to capitalize on the Southeast’s growing economic dominance and an American supply chain that is increasingly moving away from the West Coast, predicts SunTrust economist K.C. Conway.
“In South Carolina, you have a focus. You have a port leadership that got all of the maritime community together and got the (state) Legislature together and said, ‘Look, let’s row the boat together for maximum efficiency’,” Conway said during last week’s S.C. International Trade Conference on the Isle of Palms. “I travel to all of the ports all across North America, and that is unprecedented.”
Conway says the Port of Charleston is putting together all of the pieces needed to become tomorrow’s L.A.-Long Beach — the neighboring California mega-ports that for decades have led the nation in containerized trade with the rest of the world.
A harbor deepening project giving Charleston the East Coast’s deepest channel, a new container terminal served by an intermodal rail yard and inland ports linking the coast with distribution centers along major highways gives the Port of Charleston the logistics to best reach the two-thirds of U.S. consumers roughly east of the Mississippi River.
The funding for most of those projects is already in place, with the General Assembly committing almost $900 million and the State Ports Authority paying for the rest through operations and borrowing.
“It’s like a relay race, and with each piece you have to be able to hand off the baton,” Conway said. “It’s not just about big ships and deep water. It’s also about cranes. It’s about efficiency. It’s about the trucking and the rail. How do you connect all of that and make it all work seamlessly?”
Along with its access to the nation’s biggest consumer base, Conway said, the Port of Charleston is buoyed by growth in manufacturing — particularly automobiles — in South Carolina and the rest of the region. The Southeast has overtaken the West Coast as the nation’s economic leader, accounting for 21.5 percent of the U.S. gross domestic product, or about $3.8 trillion annually. The Carolinas account for nearly $4 trillion of that figure. “As goes the national economy, the Southeast and Carolinas economies will go better,” Conway said.
All of those factors have contributed to an increase in imports/exports along the East Coast while the West Coast has lost market share — all before an expanded Panama Canal opened in June, allowing bigger ships from Asia loaded with thousands of additional containers to make the journey to Charleston.
A decade ago, West Coast ports accounted for 61 percent of all cargo coming into the U.S. The split between West Coast and East Coast ports is roughly 50-50 today, and Conway said he expects East Coast ports will top 60 percent within another five years.
The winner in all this, Conway said, “will be the port that has the relationships and its act together.”
“The North American supply chain is being remade from West-Coast concentric to East Coast,” he said. “The Port of Charleston’s ability to service more than half of the nation’s GDP as the deepest East Coast port with the best inland ports is unmatched in the U.S. supply chain,” he said.