Port of Charleston Starts $1.6 Billion Expansion to Receive New Panamax Ships
East Coast ports have been eagerly anticipating the expansion of the Panama Canal to allow megaships (of course, not the most mega of megaships, but 1.5 times larger than the previous Panamax ships) to cross from the Pacific to the Atlantic.
With larger ships able to traverse the canal, many East Coast ports feel they will be able to gain market share on West Coast ports when it comes to imports from China and other Asian countries.
So it wouldn’t be surprising that if East Coast ports could sit on Santa’s knee, they’d ask for the Panama Canal’s expansion to get back on track and actually be completed by the currently projected time.
However, for some East Coast ports, delays in the Panama Canal expansion could be a good thing.
The Port of Charleston wants in on the projected new wave of larger ships crossing from the Pacific to the Atlantic, but the port is still some years away from being able to receive them.
Hellenic Shipping News posted an article that reported:
The S.C. Ports Authority is embarking on a staggering $1.6 billion expansion to lure the new super freighters into Charleston. The ships are deemed essential to continue South Carolina’s – and the Southeast’s – manufacturing boom. The project is expected to be completed by 2020.
“We’re getting this started in the nick of time,” Ports Authority chief executive James Newsome said.
I’m not sure you know what “the nick of time” means, Mr. Newsome.
The Panama Canal expansion is supposed to be completed in April of 2016. Getting its project started now and not completing it until 2020 puts the Port of Charleston four years behind. That’s plenty of time for routes to be established at ports that can actually handle the larger ships this upcoming year.
Still, better late than never. And the completion date of the Panama Canal expansion has already been backed up a couple times all the way from October of 2014 to April of this upcoming year. Hey, with the expansion project’s locks leaking, as shown in the video below, who knows when this thing will actually be finished.
Maybe the Port of Charleston won’t be so far behind after all. Maybe it should ask Santa for the delays in the Panama Canal’s expansion just to continue as is. Or it could ask for many more problems to get the delays to last all the way until 2020.
Hey, why not ask big? After all, the port has already received huge Christmas gifts in the form of money to start preparing for bigger ships.
The Hellenic Shipping News article gives some details:
Preparation for the big ships includes four separate projects:
▪ A $509 million plan to dredge Charleston harbor’s shipping channel to 52 feet from its current 45 feet
▪ A $750 million terminal at the old North Charleston Naval Base
▪ A $350 million rail line to the new terminal
▪ A $40 million project to strengthen the wharf at Wando Welch terminal to bear the increased weight of the new ships.
Work on the terminal and wharf is underway.
The General Assembly has already allocated $300 million for the dredging project, with the rest coming from port revenues and federal funds. The other projects are being funded by money they will generate.
The Ports Authority’s chief executive is confident that this project will be a big financial success at the port, not seeming worried about when the Panama Canal expansion is completed. Mr. Newsome projects the port expansion will increase the $30 million annual earnings at the Port of Charleston, adding, “I want to grow above the market” in the Hellenic article.
Mr. Newsome should be correct in the port being able to generate more revenue. Shipping to South Carolina should have a great deal of demand from U.S. manufacturing companies operating in the region because of economic advantages, as the Hellenic article details:
The trend in United States manufacturing is locating in the South to take advantage of lucrative economic incentives, free land and infrastructure, lower wages and a lack of labor unions, said Joey Von Nessen, a University of South Carolina economist who recently completed a study of the port’s economic impact.
South Carolina has proven it can take advantage of this trend with a string of major announcements from Boeing, Volvo and Mercedes Benz, and plant expansions from Michelin and BMW, he said. With the Port of Charleston moving to handle the larger ships, recruiters will have an important tool to continue to lure those companies.
“The expansion of the port will make South Carolina more competitive in the long run and enhance efforts to attract new companies and expand the manufacturing sector,” he said.
It should be noted that the Port of Charleston is already receiving larger ships than it used to receive.
Ships carrying between 5,000 and 10,000 cargo boxes — so-called post-Panamax ships — made up 52 percent of the total number of vessel calls at the port in fiscal 2015, which ended June 30. That is the first time such large ships accounted for more than half of the port’s annual traffic.
It shouldn’t be a surprise that Charleston is already receiving larger ships because the whole international shipping industry is trending in that direction.
The Port of Charleston is already a major U.S. port, but it is plain to see that it is moving toward becoming a bigger player in the shipping game, even if it’s giving some of its competitors a bit of a head start.
Source: UC Blog