SC

Port Expert: New Charleston Depth Won’t Ensure Competitiveness

ALSO, FORECAST CALLS FOR “SLOW GROWTH” IN GLOBAL SHIPPING IN THE DECADE TO COME The Port of Charleston’s new 52-foot depth – secured via a $300 million direct appropriation from taxpayers – won’t make the government-run facility any more competitive in the battle for global shipping business. That’s according to…

ALSO, FORECAST CALLS FOR “SLOW GROWTH” IN GLOBAL SHIPPING IN THE DECADE TO COME

The Port of Charleston’s new 52-foot depth – secured via a $300 million direct appropriation from taxpayers – won’t make the government-run facility any more competitive in the battle for global shipping business.

That’s according to Dr. Asaf Ashar, a port expert and research professor emeritus with the National Ports and Waterways Initiative (NPWI).

Asked whether the port’s much-ballyhooed dredging project would provide it with a competitive advantage over its east coast neighbors, Ashar had a blunt answer.

“Hardly,” he said.

Charleston used to be one of the nations’ top five ports.  Now it barely ranks in the top ten.  Meanwhile, the government that runs its facilities has totally squandered its chance to build a facility on the last, best deepwater port location on the eastern seaboard (in job-starved Jasper County).

Well, with a little help from S.C. governor Nikki Haley.

Anyway, according to Ashar the global competition for shipping business isn’t exactly heating up, either.  We asked him to look into his crystal ball over the coming decade.

“My general forecast is for slow growth, following similarly slow growth in the U.S. (gross domestic product),” he said, adding that this downward pressure would be “exacerbated” by an uptick in the re-shoring of manufacturing jobs.

That’s consistent with what those in the manufacturing industry tell us, too.

“It’s interesting because as products and processes become more complicated and high tech, they’re coming back to the United States because it’s too expensive to do that kind of work overseas where you see a lack of that talent, and the process requires a whole another level of skills and education to produce the goods well,” one Palmetto State manufacturing expert told FITS.

Interesting stuff …

This website supported the dredging project … arguing that state government was at long last spending taxpayer money on something with a tangible economic benefit for the entire state (not a narrow handout to a specific business).

Were we wrong?  Hmmm …

One thing we do hope: That the Jasper County project is permitted to leverage private investment, because it’s abundantly clear at this point South Carolina’s lack of prioritization on core functions of government is pretty damn dangerous.

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16 comments

Speak D Truth October 19, 2015 at 7:24 pm

I-26 used to be full of trucks hauling cargo containers. The loss of a large portion of that business has to be hitting the SC economy hard.

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Rocky Verdad October 19, 2015 at 9:38 pm

To be fair, a lot of those containers are probably on trains now.

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Speak D Truth October 19, 2015 at 9:47 pm

Port traffic is way down

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Bible Thumper October 20, 2015 at 12:00 am

You are all fits’ sheeple, today. None of you have expresses any doubt about this article. Fits gives no link; Very selective quotes. You believe anything he says as long as it’s critical of SC.. The documented truth is in my posted comments.

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Wondering October 20, 2015 at 8:13 am

Is “Bible Thumper” Bob McCallister?

Sic Semper Tyrannis October 20, 2015 at 8:34 am

Don’t know, but I didn’t enjoy the Simpson’s last night.

Bible Thumper October 20, 2015 at 8:53 am

You don’t need to be Bob McCallister to know how to use Google.

The Colonel October 20, 2015 at 10:06 am

Yeah, not so much: “The Port of Charleston handled almost 1.1 million cargo containers during the 2015 fiscal year. That’s the most since 2006 and was within reach of the all-time record of 1.13 million set in 1995. http://www.postandcourier.com/article/20150715/PC05/150719571/1010&source=RSS

While I support the deepening project, it will NOT appreciably increase traffic but it will keep Charleston competitive for the traffic there is and it will ensure the channel remains open for a long time to come.

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Native Ink October 19, 2015 at 8:10 pm

The major East Coast ports are as deep or deeper than Charleston’s will be after the dredging. Charleston isn’t really gaining any competitive advantage from this. They are just keeping up with the pack.

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UBL October 19, 2015 at 9:32 pm

The people handling the really big money for SC–the Ports Authority, Santee Cooper and the Retirement System Investment Commission–have all performed like rookies. SC is being taken to the cleaners and there is nothing we can do about it.

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Bible Thumper October 19, 2015 at 11:03 pm

All it is a Google search to find Dr. Asaf Ashar’s bias. He contradicts the above statements by acknowledging that Charleston will gain an advantage over Savannah. And he acknowledged that Corp of Engineers, who also have experts, disagree with him about Savannah not getting as deep a port as Savannah. This article is clearly meant to support Savannah at the expense of Charleston. I put key statements are in bold.

Devolution of U.S. Port Channels

The following is a guest commentary by Asaf Ashar, Professor Research (Emer.), National Ports & Waterways Initiative, University of New Orleans. An earlier version appeared in the Journal of Commerce’s 2015 Annual Review & Outlook.

After 15 years of relentless struggle, the U.S. Army Corps of Engineers approved a 47-foot deep channel for the Port of Savannah. Two years later, the Army Corps approved a 52-foot channel for the Port of Charleston. Having a 52-foot channel, the deepest on the east coast, provides Charleston with an important competitive advantage: ability to serve a fully loaded 13,500-TEU, New-Panamax ship. The consecutive Army Corps decisions to deepen two adjacent ports serving the same ships to different depths was made by applying the same economic assessment methodology, based on the same criterion of national benefit/cost ratio. Why was Savannah, twice the size of Charleston, so harshly discriminated against relative to its archrival located just 104 nm to the north?

The apparent explanation is that the Army Corps’ methodology is based on speculative and, in some areas, flawed assumptions, especially on the benefit side. The benefit assessment mandates developing a highly detailed, 50-year (!) forecast of the ports’ traffic by trade lane, service pattern, and vessel size, a speculative undertaking in the notoriously volatile shipping market. Strangely, the forecast disregards port competition and therefore contains an unavoidable internal contradiction: it is reasonable to expect that Charleston’s much deeper channel will increase its market share and respective national benefits at the expense of Savannah’s. Should the Army Corps redo Savannah’s study resulting in reduced benefits and, accordingly, reduce Savannah’s recommended depth?

The benefits are derived from the differential in shipping cost between two hypothetical scenarios, with and without deeper channel which, at least in the case of Savannah, I found flawed (see: www.asafashar.com), along with other Army Corps assumptions on tide delays and ship’s load factors. The cost-side calculation also is flawed; it only includes the channel cost, but excludes the much higher costs of deeper docks, taller cranes and other landside infrastructure required for the bigger ships.

But the real problem is with the concept of national channels and respective national benefits. Access channels are integral parts of port facilities, and port facilities essentially are regional infrastructure which, because of inter-modalism, also can serve a nation-wide market. Most of the investments in ports are made by regional governments: port authorities, cities, counties and states. Recently, the states’ share has been on the rise as was demonstrated in the decision by Florida’s governor to invest heavily in his state’s ports in attempt to “repatriate” cargo presently handled by ports in other states – as well as to capture the cargo of other states. Why should the federal government intervene in the evolving competition among the states of Florida, Georgia, South Carolina and California for handling Florida’s cargo? How can one determine which states’ ports are more “nationally beneficial”?

It is time to end the fiasco around our ports’ channels. The federal government should transfer the economic responsibility for channel deepening and maintenance to regional port authorities, along with the right to collect user fees (Harbor Maintenance Tax included) to cover their channel cost—as ports already do with all other port-related infrastructure. Provided that it complies with environmental and safety regulations, Savannah should be allowed to deepen this port channel to the depth it considers economical and necessary to compete with Charleston and other ports, without going through another 15 years of federal approval ordeal.

It is time to liberate our ports and allow them to compete freely—to the benefit of our nation.

– See more at: http://reason.org/news/show/surface-transportation-news-137#.dpuf

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Bible Thumper October 19, 2015 at 11:53 pm

I have also found where Dr. Asaf Ashar has been and expert for Savannah, Miami and Palm Beach Harbor. He has also done other work for Florida and the Gulf Coast.

It’s interesting that the only mention of Charleston, SC is work for the Southern Environmental Law Center about a port in Haiti.

Shipping Expert and Port Planner, Northern Haiti Port Development Plan,  for Southern Environmental Law Center, Charleston, SC, USA(2012).
http://www.asafashar.com/experience.html

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Bible Thumper October 20, 2015 at 12:21 am

Dr. Asaf Ashar speaks as if all port business is imports The “re-shoring of manufacturing jobs” trend for more skilled American workers provides opportunity for more exports. That is the real benefit of port deepening to South Carolina. GE, BMW, numerous tire manufacturers, and now Mercedes Benz Sprinter vans and Volvo are or will be using Charleston port facilities.

The port deepening is a selling point for further expansion of good paying jobs.

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The Colonel October 20, 2015 at 10:00 am

Wow, that must have been a big check from the Port of Jasper folks!

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YallCalmDown October 20, 2015 at 11:40 am

Is T-Davis the new T-Rav?

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