2011-02-25 / Business

Will S.C. be ready?

Obstacles and incentives at Port of Charleston
By John Temple Ligon temple@thecolumbiastar.com

Bill Stern (l), chairman, South Carolina State Ports Authority; and James I. ( Jim) Newsome III, President and CEO 
Photo contributed by S.C. State Ports Authority Bill Stern (l), chairman, South Carolina State Ports Authority; and James I. ( Jim) Newsome III, President and CEO Photo contributed by S.C. State Ports Authority The Port of Charleston is under way with an expansion brought on by international forces. There are four major issues being bandied across the state, but they don’t stop there. They go around the world.

First, where’s the money for dredging Charleston Harbor? It needs at least $300 million to get it down to a 50–ft. depth and another $20 million a year for maintenance.

Second, where’s the railroad going at the new terminal on the former Navy base? Why is the Mayor of North Charleston so upset?

Third, what are the Chinese up to down in Colombia? Expanded rail connections between the Atlantic and the Pacific? Why can’t Congress ratify the freetrade agreement with Colombia, the U.S.’s closest ally in South America? If rail can expand cross–Colombian traffic, can the expanded rail connection expand trade for the Port of Charleston?

Fourth, what’s with the Jasper County Port on the Savannah River? Can it survive the dredging and dumping?


Congressman Jim Clyburn said he helped pass a bill in the House three times, and each time the bill would put $400,000 in the Charleston Harbor dredging study. But each time the bill was killed by Republicans in the Senate. Then Clyburn pulled together the South Carolina delegation to sign a letter to President Obama asking him to put the dredging study funds in his budget, but out of the eight members of the state’s delegation, two failed to sign the letter. Both Rep. Joe Wilson (R–SC) and Sen. Jim DeMint (R–SC) refused to sign the letter to President Obama.

Even though the state could probably cough up the $400,000, the way the shipping channel dredging works, the study has to be funded by the federal government in order to get the federal government to also fund the dredging—in this case, $300 million for the dredging. At 48 feet when the tides are considered, Charleston has the deepest port south of Norfolk, but the port needs a 50– foot depth to handle the big ships, called Panamax, once the Panama Canal expansion is complete in 2014 with its 50–foot depth.

Sen. Lindsey Graham (R–SC) says he’ll gladly consider backing an earmark customized to fund the study and also the dredging. Problem is, DeMint and Wilson have joined the fight to prevent anything approaching an earmark in Congress. To ameliorate the matter somewhat, Wilson was quoted as saying in the Columbia Regional Business Report, “I have been in contact with the U. S. Army Corps of Engineers and am working in conjunction with the S. C. State Ports Authority for a favorable resolution to the dredging issue.”


The S. C. State Ports Authority really wanted to locate the port’s new terminal on Daniel Island, but that didn’t happen, so the new port facilities are farther upstream at the former Navy base. To gain railroad access, the Navy base conversion to a port needs trains coming on tracks shared by both Class 1 rail carriers serving the region, Norfolk Southern and CSX, called “dual–rail access.”

In many states, the ports authorities build the rail yards and handle the switching of cars for private carriers. But in South Carolina, S.C. Public Railways, a division of the S.C. Commerce Department, is responsible for the rail connections. The SPA agreed on a memorandum of understanding with the City of North Charleston ensuring no tracks were to be laid north from the new port terminal at the former Navy base. But the S. C. Public Railways is the final authority, and it did not sign the MOU.

The City of North Charleston sees its land area north of the new port terminal as more suitable for residential development, not rail yards. The City has filed a lawsuit challenging the state’s condemnation of property for the dual–rail access needed for a completed port terminal.

The railroads, on the other hand, are cooperating. Last month CSX declared its plan flexible enough to share the rail yard and its costs with Norfolk Southern.

S.C. Rep. David Mack also encouraged an air of cooperation with his community meeting he called for Monday night, February 21 in North Charleston. Mack, before the meeting, was something of a northside advocate arguing in favor of a rail yard near the new port terminal, where dual–rail access is assured.


South Carolinians should be happy to hear what the Chinese are up to in Colombia, proposing a “dry canal” crossing the country and connecting the Atlantic and the Pacific. Using railroads instead of shipping canals, the Chinese think they have a trade tool that meets the costs of transportation per ton and the costs of investment.

In 1980, Sino–Colombian trade was worth $10 million, and by 2010 it had soared to $ 5 billion. The world’s fifth– largest coal producer, Colombia can see the advantages of more Pacific access for exporting to China and India, who together imported 190 million tons of coal in 2010.

Chinese finished goods can dock on Colombia’s Pacific coast and take the railroad dry canal 140 miles to the Atlantic for distribution to the U. S. Eastern Seaboard, specifically Charleston. One problem, though, is the failure of the U. S. Congress to ratify a four– year– old free– trade agreement signed by both the U.S. and Colombia.

A second inland 500–mile railroad connecting the Atlantic with the Pacific is also under serious consideration. Chinese Development Bank and China Railway Group are in this together for an estimated investment of $7.6 billion.

There is already a railroad connection in Panama between the Atlantic and the Pacific, and it’s been running since 1855. Just like the Panama Canal, the Panama Canal Railroad connects the port cities of Colon (Atlantic) and Panama City (Pacific). Business fell off when the trans–continental railroad in the U.S. was up and running by 1869. Still, the Panama Canal Railroad makes arguments both for and against the cross-Colombia idea. It works, but it doesn’t come close to approaching the volume of the Panama Canal itself, particularly when the expansion is complete in 2014.

The biggest ships coming through the current canal can’t carry more than about 4,500 20–foot equivalent container units, but the numbers climb above 12,000 TEU once the expanded canal is considered.

Just what gains in shipping will occur at the Port of Charleston if and when the cross–Colombia railroad is put to use is a wide–open guess. But once the 12,000+ TEU Panamax ships start coming in, Port of Charleston volume could triple.


S.C. State Ports Authority Chairman Bill Stern issued a letter Friday, February 18, saying he failed to see the sense in putting more money into the Jasper County port facility, a jointventure between South Carolina and Georgia, until the Savannah River dredging problems were resolved. Stern and S.C. lawmakers worried the quality of the soil dumped on the Jasper terminal’s site could make it unfit for decades. State lawmakers earlier this month passed a resolution where South Carolina doesn’t want to participate in the dredging and expansion of the Savannah River if it would not benefit both states.

On the other hand, Georgia ports executive director Curtis Foltz was quoted by the Island Packet newspaper (Hilton Head). He said, “ The region demands three successful long–term ports. When you look at the next 20, 30, 40 years, we’re going to need all the capacity a built–out Charleston, a built– out Savannah and a built–out Jasper can offer.”

International trade makes or breaks opportunities to build wealth. The future of manufacturing in the Midlands hangs in the balance.

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