{"id":21294,"date":"2017-10-16T11:13:46","date_gmt":"2017-10-16T16:13:46","guid":{"rendered":"http:\/\/panamaadvisoryinternationalgroup.com\/blog\/?p=21294"},"modified":"2017-10-16T11:13:46","modified_gmt":"2017-10-16T16:13:46","slug":"panama-canals-boon-felt-far-beyond-port-charlestons-cargo-terminals","status":"publish","type":"post","link":"https:\/\/panamaadvisoryinternationalgroup.com\/blog\/panama-canals-boon-felt-far-beyond-port-charlestons-cargo-terminals\/","title":{"rendered":"Panama Canal&#8217;s boon felt far beyond Port of Charleston&#8217;s cargo terminals"},"content":{"rendered":"<p><a href=\"http:\/\/panamaadvisoryinternationalgroup.com\/blog\/wp-content\/uploads\/2017\/10\/CMA-CGM-Theodore-Roosevelt-.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-21295\" src=\"http:\/\/panamaadvisoryinternationalgroup.com\/blog\/wp-content\/uploads\/2017\/10\/CMA-CGM-Theodore-Roosevelt-.jpg\" alt=\"\" width=\"1000\" height=\"563\" srcset=\"https:\/\/panamaadvisoryinternationalgroup.com\/blog\/wp-content\/uploads\/2017\/10\/CMA-CGM-Theodore-Roosevelt-.jpg 1000w, https:\/\/panamaadvisoryinternationalgroup.com\/blog\/wp-content\/uploads\/2017\/10\/CMA-CGM-Theodore-Roosevelt--300x169.jpg 300w, https:\/\/panamaadvisoryinternationalgroup.com\/blog\/wp-content\/uploads\/2017\/10\/CMA-CGM-Theodore-Roosevelt--768x432.jpg 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/a><\/p>\n<p>David Wren writes in The Post and Courier about the increased transits and cargo in Charleston and elsewhere.<\/p>\n<div>\nThe State Ports Authority&#8217;s bet that billions of dollars invested in improvements at the Port of Charleston will lure bigger ships carrying more freight appears to be paying off in the roughly 15 months since the Panama Canal expansion was completed.<\/div>\n<div>\nShips more than double the size of the ones that regularly visited Charleston before the canal&#8217;s June 2016 widening are bringing record numbers of containerized cargo to the SPA&#8217;s terminals.<\/div>\n<div>\nThe thousands of extra metal boxes crossing those terminals are largely responsible for the 10.6 percent increase in operating revenues the SPA recorded in the last fiscal year, as containerized cargo accounts for 79 cents of every dollar the agency brings in.<\/div>\n<div><\/div>\n<div>&#8220;We&#8217;ve seen increases both in the number of weekly services inbound through the Panama Canal and in the size of those vessels,&#8221; said Erin Dhand, the SPA&#8217;s spokeswoman.<\/div>\n<div>\n&#8220;We went from four of eight weekly Asia services through the Panama Canal earlier this year to six of nine weekly Asia services transiting the canal today,&#8221; she said.<br \/>\nFive of those six ships now visiting the port each week wouldn&#8217;t have fit through the canal&#8217;s narrower locks.<\/div>\n<div>\nBut to truly gauge whether the investment in port facilities is paying dividends, one economist says, one has to look beyond the SPA&#8217;s cargo yards along the Cooper and Wando rivers.<\/div>\n<div>\n&#8220;It&#8217;s not just a one dimension story of how many containers are coming through the port \u2014 it&#8217;s much bigger than that,&#8221; said K.C. Conway, a former SunTrust bank economist who&#8217;s now director of research at the University of Alabama&#8217;s Culverhouse College of Commerce.<\/div>\n<div>\n&#8220;It&#8217;s what are you doing with your capital expenditures that not only allows shippers to come through your port but also delivers jobs and economic benefit to your state,&#8221; he said.<\/div>\n<div>\nEconomic engine<br \/>\nPamela Lackey, chair of the SPA&#8217;s board of directors, points to a recent University of South Carolina study that shows 1 in 11 jobs statewide is linked to the port, creating a $53 billion annual economic impact.<\/div>\n<div>\n&#8220;It&#8217;s a huge driver of growth in South Carolina,&#8221; Lackey said of the port during a recent episode of the Carolina Business Review television show.<\/div>\n<div>\nPreparation for the Panama Canal&#8217;s expansion has helped spur that growth.<\/div>\n<div>\nIt&#8217;s been fewer than seven years since the Army Corps of Engineers said it would study plans to dredge Charleston Harbor to 52 feet\u00a0\u2014 the deepest navigation channel on the East Coast and a key driver of big container ships to the port.<\/div>\n<div>\nSince that time, there have been nearly 1,000 economic development announcements statewide bringing more than 100,000 new jobs and nearly $30 billion in investments.<br \/>\nThe numbers include expansions by big port customers like Michelin and BMW, distribution centers for retailers like Dollar Tree that import goods through Charleston and ship them by rail to the Upstate, and new campuses for manufacturers like Samsung and Volvo Cars\u00a0\u2014 companies that wouldn&#8217;t have moved to South Carolina if it weren&#8217;t for the Port of Charleston.<br \/>\nAll of that as Charleston has yet to fully realize what&#8217;s being termed the &#8220;big ship era.&#8221;<br \/>\nHeadline-grabbing vessels capable of hauling up to 14,000 cargo boxes at a time are just beginning to call on the port, with a single service sending one ship every week or so. Jim Newsome, the SPA&#8217;s president and chief executive officer, expects a second service will start next year.<\/div>\n<div>\nMore will follow. Mediterranean Shipping Co. is even studying whether a vessel carrying 18,000 cargo containers can slip under the Ravenel Bridge toward the Wando Welch Terminal in Mount Pleasant.<\/div>\n<div>\n&#8220;The big ship strategy really hasn&#8217;t taken effect yet,&#8221; said Ron Brinson, a North Charleston City Councilman, former president of the Port of New Orleans and a maritime industry consultant.<\/div>\n<h3>\nBig plans, big expense<\/h3>\n<div>\nBrinson says the SPA&#8217;s investment in getting the Port of Charleston ready for over-sized container ships has been &#8220;a brilliant marketing strategy&#8221; to lure manufacturers and other customers.<\/div>\n<div>\nBut paying for all of the infrastructure improvements could prove difficult.<\/div>\n<div>\nThere is already money in the bank for some of the work. The state legislature has set aside $300 million to pay for South Carolina&#8217;s share of the $529 million harbor deepening project, with the rest of the money due from the federal government.<\/div>\n<div>\nAnd the state Department of Transportation will fund most of the roughly $221 million in construction costs to build a road linking U.S. Interstate 26 with a new terminal being built on the former Navy base in North Charleston.<\/div>\n<div>\nHowever, the SPA must come up with nearly $1.4 billion during a 10-year period that started in 2015 to pay for planned improvements at its existing terminals, a new inland port in Dillon and construction of the new Hugh K. Leatherman Terminal that will double the port&#8217;s containerized cargo capacity.<\/div>\n<div>\nThat spending will accelerate this fiscal year, with the SPA&#8217;s budget calling for a record $278.9 million in capital expenditures in the 12-month period that started July 1.<br \/>\nNewsome said he hopes to pay for those improvements through a combination of financing and ongoing revenue from operations.<\/div>\n<div><\/div>\n<div>And, again, the Panama Canal&#8217;s expansion will provide a boost.<\/div>\n<div>\nWhile cargo totals \u2014 and their corresponding revenue \u2014\u00a0have soared since the expansion was completed, the costs associated with moving that cargo have grown at a much slower pace. That&#8217;s because most of the port&#8217;s costs are fixed regardless of how much cargo comes in.<br \/>\n&#8220;So the more volume you can put through that mouse trap, the more goes to your bottom line,&#8221; said Newsome, adding that about 80 percent of the revenue from each new container is profit.<\/div>\n<h3>\nKeep up or fall behind<\/h3>\n<div>\nProjected growth in containerized cargo is reflected in the SPA&#8217;s budget. The maritime agency projects about 7.5 percent growth in revenues this fiscal year\u00a0\u2014 to $251.1 million\u00a0\u2014 on top of the double-digit increase last year.<\/div>\n<div>\nThe port&#8217;s operating margins average between 15 percent and 20 percent each month. As the SPA becomes more efficient in moving big-ship cargo, Newsome expects those margins to increase to 25 percent.<\/div>\n<div>\n&#8220;It&#8217;s scalability,&#8221; Brinson, the councilman and former New Orleans port director, said. &#8220;You can handle a lot more volume and costs don&#8217;t rise.&#8221;<\/div>\n<div>\nHaving the right equipment is crucial. For example, the SPA is buying several new 155-foot-tall cranes and extending the reach on some of its existing cranes to move containers stacked high on big ships more easily.<\/div>\n<div>\nThe growing efficiency can be measured by the number of cargo boxes moved per ship. The SPA saw a nearly 20 percent gain in those numbers during the last fiscal year\u00a0\u2014 an average of 1,609 containers to and from each vessel that visited the port&#8217;s terminals\u00a0\u2014 without losing significant ground on the number of moves per crane each hour.<\/div>\n<div>\n&#8220;Some people say big ships are hard, that they tax the port or whatever,&#8221; Newsome said. &#8220;We like bigger &#8230; ships. I would prefer to handle the same number or fewer ships with more moves. I&#8217;d rather handle 20 ships with 2,000 moves on them than 40 ships with 1,000 moves on them.&#8221;<\/div>\n<div>\nBy the time those big ships become commonplace, Newsome said he expects the SPA will have been able to fund the necessary infrastructure to compete for freight with other Southeast ports and handle the increased cargo loads for decades to come.<\/div>\n<div>\nBesides, the Panama Canal&#8217;s expansion leaves him no choice.<\/div>\n<div>\n&#8220;The ports that have done that work, including harbor deepening, will be able to keep up,&#8221; Newsome said. &#8220;The ones that haven&#8217;t won&#8217;t.&#8221;<\/div>\n<div><\/div>\n<div>\n\n<div class=\"wpcf7 no-js\" id=\"wpcf7-f16536-o1\" lang=\"\" dir=\"ltr\" data-wpcf7-id=\"16536\">\n<div class=\"screen-reader-response\"><p role=\"status\" aria-live=\"polite\" aria-atomic=\"true\"><\/p> <ul><\/ul><\/div>\n<form action=\"\/blog\/wp-json\/wp\/v2\/posts\/21294#wpcf7-f16536-o1\" method=\"post\" class=\"wpcf7-form init\" 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elsewhere.<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[10,12,247,241,39,248,34,33,62,42,219,11,249,243,7,246,244,44],"class_list":["post-21294","post","type-post","status-publish","format-standard","hentry","category-news-articles-panama-perpsective","tag-bocas-del-toro","tag-boquete","tag-boquete-boca-chica-real-estate","tag-boquete-real-estate","tag-buenaventura","tag-casco","tag-casco-antiguo","tag-casco-viejo","tag-coffee-in-panama","tag-estate-homes-in-panama","tag-move-to-panama","tag-offshore-real-estate","tag-panama-offshore-real-estate","tag-panama-papers","tag-panama-real-estate","tag-relocate-to-panama","tag-rum-in-panama","tag-travel-to-panama"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.7 (Yoast SEO v27.7) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ 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