Port of Charleston www.scpa.com
South Carolina Ports Authority expresses concerns about tariff uncertainties
“The world connects here,” is what the South Carolina Ports Authority (SCPA) had to say about the port of Charleston, which experienced 9 percent growth in shipping in fiscal year 2019 over 2018, is dredging to handle even larger ships and has generated related construction projects such as a mile-long access road and a massive distribution facility.
But tempering the growth is insecurity about what escalating trade wars and potential tariffs could mean for the future of the port, the region and the state.
“We’re watching closely to see what the future holds, and we are hopeful that the trade issues will be resolved soon,” Jim Newsome, SCPA director and CEO, told the Palmetto Business Daily in an email interview.
Although agriculture has taken the biggest hit in the ongoing U.S. trade war with China—and has a close call with a potential one with Mexico—products from all over the world continue pass through the Charleston on their way into the United States, and a large number of U.S. goods—including automobiles, which are an important part of the regional economy—are shipped out. Perdue and Columbia Farms are among the agricultural companies that use the port while BMW and Michelin just two of the auto-related businesses.
“While the trade disputes stem from real issues that need to be addressed, the tariffs create uncertainty among businesses and spur risk mitigation in the supply chain," Newsome said. "Some companies have responded by shipping ahead, known as frontloading, to avoid tariffs. The tariffs have differential impacts on retail imports, automotive and agriculture exports. The major impact up to now has been a significant decline in agriculture exports, such as soybeans. We believe in free trade and the movement of goods in a global marketplace.”
Any decline in activity at the port would have an adverse effect on the entire state’s economy. One out of 11 jobs in South Carolina is related to SCPA activity, and in 2015, well before some of the major expansions, a University of South Carolina study credited the port with generating $53 billion in revenue and $912 million in tax funds.
Newsome said that despite concerns and uncertainty about future effects of potential tariff, the port of Charleston is more than solid.
“Despite uncertainty in global markets, S.C. Ports Authority had a strong year," Newsome said. "The Southeast remains the best place to be in the port business with a growing population to support imports and a strong manufacturing and automotive presence to boost exports. East Coast ports are growing relative to the U.S. port market overall because of the expansion of the Panama Canal and the fact that big containerships call on the East Coast now.
"The port of Charleston saw increased volumes and continued growth in fiscal year 2019. SCPA’s container business had a record-setting fiscal year with nearly 2.4 million 20-foot equivalent container units [TEUs] handled from July 2018 through June, an 8.8% increase in annual TEU container volume. Our inland ports in Greer and Dillon continue to see record growth year over year. While we expect more modest growth in fiscal 2020, we are optimistic about the future and continue to invest in our infrastructure.”