Newsome’s State of the Port Predicts Decisive Five Years Ahead for SCPA
Sustaining above-market container volume growth, achieving the deepest harbor on the east coast, investing in infrastructure, and expanding the cargo base topped the list of South Carolina Ports Authority (SCPA) five-year initiatives highlighted last week at the State of the Port.
In his seventh address at the annual event, SCPPA president and CEO Jim Newsome reflected on the volume and revenue gains that well-position SCPA to face the challenges ahead for South Carolina’s public port system.
“Within the state, we are an economic driver and strategic asset that should be a source of pride for our shareholders, the people of South Carolina,” Newsome said. “From a competitive standpoint, we offer the best product at the lowest cost in the U.S. port industry. Our above-market growth is an achievement that has positioned the Port as a strong and visible global brand and will continue to pay dividends to the state and region’s economies.”
SCPA reported a nearly 15 percent fiscal year-over-year increase in container volume in 2015, handling 1.9 million twenty-foot equivalent units (TEUs). Charleston breakbulk grew seven percent over planned volumes, with 900,000 tons handled. A record-breaking 253,338 vehicles moved across SCPA docks, up 15 percent from the previous record of 219,900 vehicles in 2008.
Newsome highlighted SCPA’s significant financial growth over the last five fiscal years, including a 75 percent increase in revenue from $112 million in 2010 to $196 million in 2015. During that time, operating earnings jumped from $8.4 million to $30 million, and pier container volumes, or boxes handled, increased from 741,000 to 1.095 million.
Newsome said SCPA’s ability to build upon this success over the next five years will be decisive for the port. Planned volume gains are linked to Charleston’s opportunity to serve big ships calling the east coast. With alliances among the major shipping lines firmly in place and 90 percent of new ocean vessels to be built for 7,500 TEUs or greater, ship lines will become increasingly dependent on ports to offer deep and wide harbors for reliable access. The expansion of the Panama Canal and raising of the Bayonne Bridge in New Jersey, both slated for completion next year, will also bring post-Panamax vessels to the southeast in greater frequency.
SCPA’s efforts to deepen the Charleston Harbor to 52 feet are on schedule, with a firm focus on expediting the Preconstruction Engineering and Design Phase of the project. Construction is expected to be completed by 2020.
SCPA will also focus on investments to terminal capacity and infrastructure, including construction progress on the Navy Base Terminal and Wando Welch Terminal wharf strengthening project.
“Significant investment is required to be a major U.S. container port, and earning adequate return on capital will be a challenge for us in the years ahead,” Newsome said. “In addition to maintaining above-market growth and delivering high value for the reliability and cost of service we offer, there are a number of actions required to realize these investments: an improved contractual structure and revenue model from port clients; firm prioritization of capital expenditures; and an inward focus on organizational streamlining, effectiveness and productivity.”
Expansion of the port’s cargo base will drive planned volume increases, Newsome said. In addition to the cargo that naturally flows through South Carolina’s port facilities, SCPA will continue to pursue discretionary cargo, including Midwestern agriculture products and plastics from the Gulf. Private sector investment in port-related infrastructure is critical to serve these growing markets.
Other long-term investments for the SCPA include progress on the Jasper Ocean Terminal (JOT), which represents the next major increment of Southeast container port capacity. The JOT Joint Project Office is expected to begin the permitting process for the terminal later this fiscal year.
“The next five years bring great opportunity for our port,” Newsome said. “By 2020 we will complete the harbor deepening project to 52 feet, open Phase One of the Navy Base Terminal and enjoy an operational dual-served intermodal container transfer facility. Delivering on our priorities and aggressive action will be required to meet these goals. The Port has a highly talented and skilled workforce, and with the commitment of our entire maritime community, I am confident that SCPA’s best years are ahead.”
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