S.C.'s largest port sees significant drop in cargo

CHARLESTON -- Traffic through South Carolina's largest port in Charleston has decreased 37 percent in the past five years, while shipping through the neighboring port of Savannah, Ga., has increased 42 percent.

Experts say the change is because Georgia has been more successful in recruiting large distribution centers that need to move items through the port.

"We weren't as aggressive as we should have been," State Ports Authority president Jim Newsome told The State for a story Sunday.

Newsome, who took over as president of the ports in September, said the state will have a second chance at luring some distribution facilities in advance of the widening of the Panama Canal. That will be complete in 2014 and will bring more ships from Asia to the East Coast, he said.

"This will be the most significant event since the start of containerization," Newsome said. "And the state is now attuned to that."

South Carolina has much ground to make up.

In the 1990s, while the port of Charleston focused on retaining shipping firms, Georgia and other states bought land and built the infrastructure to bring in distribution centers.

Savannah landed a 1.5 million-square-foot Home Depot distribution center as well as those for Walmart, Target, Sears/Kmart, Lowe's and IKEA. The ships followed the centers. That meant fewer ships coming in to Charleston and fewer available to take goods out.

From 2004 to 2009, 20-foot containers hauled into and out of Charleston plunged to about 1.2 million a year from nearly 1.9 million, while Savannah's traffic spiked to 2.3 million from 1.7 million.

"We lost our competitive edge," Ports Authority spokesman Byron Miller said.

Some question whether the distribution route is the way to go. The centers generally pay lower wages than manufacturing plants. And unlike manufacturers such as BMW in the South Carolina Upstate and Boeing, which is locating a facility in North Charleston, there are few suppliers or spinoff industries that grow up around distribution centers.

"Distribution centers are important," said Jim Gambrell, Columbia's economic development director. "But the return on investment doesn't rank up with an advanced manufacturing center. A distribution center doesn't create wealth."

Still, University of South Carolina economist Doug Woodward said, South Carolina, which has the nation's fourth-highest unemployment rate, needs jobs. And the areas where the distribution centers would likely locate - rural areas with low-cost land, cheap labor and good interstate access - have even higher jobless rates.

"We have to serve the population that we have," Woodward said. "People in some areas will line up for these jobs. It's better than working retail."