DC Velocity - November 2013

Savannah has a superb logistics
infrastructure, is close to the Atlanta
and northern Florida markets, and
has a strong agricultural commodity
base. Charleston has the industry’s
most efficient loading and unload-
ing operation, with 43 crane moves
an hour, according to Colliers
(Savannah is close behind at
between 40 and 42 moves).
Charleston, like Savannah, is tied
into a vibrant regional manufactur-
ing market—especially autos. It han-
dles most of the sea commerce mov-
ing in and out of the Carolinas, and
has a solid presence in Tennessee.

Luxury automaker BMW North America, probably Charleston’s highest-profile customer, moves 600 to 800 vehicles per day from its factory in Spartanburg, S.C., to the port, about 200 miles away, for export.

Conway of Colliers said that, with greater cooperation, the ports combined could handle 10 million TEUs per year by 2020. That would more than double the approximately 4. 5 million combined TEUs handled in 2012. Savannah, at 2. 9 million TEUs in 2012, is the nation’s fourth-largest port, behind Los Angeles, Long Beach, and the Port of New York & New Jersey. Charleston, at 1. 5 million TEUs, is the fifth. Los Angeles and Long Beach, adjacent to each other but also competitors, handled a combined 14 million TEUs last year.

The facilities could “complement each other to such a degree that they become the East Coast equivalent of Los Angeles and Long Beach,” Conway said. However, they “keep tripping over each other for the same business,” he said.

Ted Prince, who runs a Kansas City, Mo.-based consultancy bearing his name, said the ports’ fierce rivalry will benefit liner companies, beneficial cargo owners (BCOs), and the ports themselves. “The competition between them will keep them focused, efficient, and customer-responsive,” Prince said. The challenge will come if they abuse their dominant position and price like monopolies, Prince said. If that happens, liners and BCOs could, over time, migrate to smaller ports like Wilmington, N.C., and Jacksonville, Fla., he added.

In an early September interview at his Charleston office, James I. Newsome III, who left the top U.S. post at German liner giant Hapag-Lloyd in 2009 to run the South Carolina State Ports Authority, didn’t say outright that the ports enjoy a duopoly in the region. But he could see where some could get that impression. “Both ports have things to offer, and they will be partners in the foreseeable future,” he said.

The two ports, by virtue of their superior capabilities relative to other Southeast port locations, have a near lock on the region’s commerce, Newsome said. They also have the traffic flows required to justify the billions of dollars in investments needed to