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South Carolina: Moving the Freight

Oct 02, 2017 11:20AM ● Published by Emily Stevenson

By Cathy Morrow Roberson

South Carolina has embraced globalization for quite some time, starting with the textile industry, where it was a leader in textile exports for a number of years. However, it was, ironically, globalization itself that killed the textile industry as it moved jobs overseas.

By the 1990s, a new kind of manufacturing came to the state in the form of automobiles. German automotive manufacturer BMW opened its first and so far only U.S. manufacturing facility in South Carolina in 1994. Since then, tier one, two, and beyond automotive suppliers and additional manufacturers, including Boeing, Samsung, and GE Healthcare, have established a leading presence in the state.

As a result of this manufacturing renaissance, South Carolina witnessed unprecedented economic growth. However, after five years of increasing economic growth, South Carolina’s economy in 2016 leveled off, according to University of South Carolina Research Economist Joseph von Nesson. Von Nesson further noted that even though the state’s economy remains strong and is expected to grow in 2017, no major industries in the state are forecast to significantly expand beyond their current rate of growth in 2017.

Perhaps the economic leveling will allow infrastructure to finally catch up as more and more goods are moved intra-State, inbound and outbound. South Carolina has made great strides in infrastructure investments, but more is needed. Consider the American Society of Civil Engineers report that rated the U.S. overall infrastructure as a D+: 10.3 percent of South Carolina’s bridges are structurally deficient; 16.3 percent of South Carolina’s 76,250 miles of public roads are described in poor condition, which in turn averages $502 per motorist per year in costs.

Ports
The South Carolina Port Authority (SCPA) continues to be a shining light in South Carolina’s status as a major logistics hub. In May, the Post and Courier newspaper reported that the SCPA is investing more than $1.5 billion on ongoing projects to deepen the Charleston Harbor, build a new container terminal, reinforce a wharf, add refrigerated storage space, and install ship-to-shore cranes tall enough to stack cargo boxes up to nine high atop a ship’s deck. 

Port investments seem to be paying off, as the largest container line to date to visit the port, COSCO Development, with a capacity to hold more than 13,000 cargo boxes, made its arrival to the state in May. Indeed, following global ocean freight trends, container lines are becoming bigger and bigger and will probably make fewer visits to ports as a result. This in turn has required many businesses to re-optimize their supply chains. However, despite the anticipated fewer scheduled visits, the number of containers managed by the port of Charleston is impressive. For the calendar year 2016, total TEUs (twenty-foot equivalent) increased 1.2 percent from 2015. For the first half of calendar year 2017 as compared to the same period for 2016, Charleston total TEUs increased 14.6 percent. In comparison, Savannah’s TEUs grew 11.6 percent and Norfolk grew at 8.4 percent.
 
Intermodal
The number of containers increasing to and from the port of Charleston has resulted in increases in trucking and congestion on South Carolina’s interstate network. As such, in partnership, SCPA, Norfolk Southern, and BMW invested in the state’s first inland port located in Greer.

The facility has surpassed all expectations. The goal was to have 100,000 rail moves of cargo per year by 2018. In 2016, the third year of the port’s Upstate operation, SCPA recorded 103,635 rail moves in one year. Located in one of the fastest-growing corridors in the U.S., I-85 between Charlotte and Atlanta, 94 million consumers live within 500 miles, resulting in quicker delivery times. The likelihood of further expansions such as distribution centers and more is high for this area.

SCPA hopes to replicate the success of the Greer Inland Port on the state’s coast. Earlier this year, ground was broken for the second such facility in Dillon. With an anticipated completion date for early 2018, it is expected that the new facility will handle 35,000 containers. SCPA indicates that up to 5.6 million truck miles could be abated in the first year as instead of trucks, the containers will move via CSX’s rail line. The benefits for this second inland port include reduced air pollution and greenhouse gas emissions, improved safety on I-95 and I-26, and reduction in port-related traffic.

Air
In 2016, Greenville-Spartanburg International airport became the first airport in the Carolinas to offer regular, scheduled all-cargo flights to and from overseas destinations. Senator International began flying cargo between the airport and Munich, Germany, twice a week. As a result, the Greenville-Spartanburg International airport witnessed an almost 14 percent increase in the number of enplaned and deplaned cargo in 2016. 

The new service from Senator International has also allowed BMW to consolidate its airfreight from several East Coast airports to the Greenville-Spartanburg airport.

Meanwhile, as e-commerce continues to take hold, UPS and FedEx utilize both the Greenville-Spartanburg airport as well as Columbia’s airport. Typically supporting domestic flights, the two big integrators transport a host of items, from a variety of shippers including Amazon, which has fulfillment facilities located in the Columbia and Spartanburg areas.

Moving the Freight
Road to rail, sea to air, South Carolina is building an enviable infrastructure network connecting modes of transportation to move freight within the state, overseas, and within the southeast U.S. in the most efficient and cost effective manner.

Infrastructure investments are paying off. According to the South Carolina Department of Commerce, a number of businesses are locating to the state, including:

bo parts GMBH, a tier one and two supplier to the automotive industry and part of the FRIMO Group, headquartered in Germany, will open a new, 60,000 square foot production operations plant in Greenville County.

Electro-Spec, a specialty plating manufacturer, will open a new production operation plant in Lexington County.  The company has a customer base in North America, Asia, and Europe, and services the aerospace, medical, telecommunications, and automotive industries.

Safeplast NA Company, manufacturer and provider of hose protectors and hose binding products, will open a new facility in Pickens County. Safeplast is affiliated with Safeplast Finland, and the Pickens County location will serve as the company’s North American headquarters.

Samsung will open a new home appliance manufacturing facility in Newberry County.

Wagner Systems, a global manufacturer of systems for surface finishing of liquid paints, powder coating, and adhesives, opened a new application center operation in Charleston County.

South Carolina continues to make its mark not only as a leading location for manufacturing but also as a growing logistics hub for the Southeast and beyond. Infrastructure improvements and expansion will further place South Carolina ahead of its neighbors as it vies for best in class logistics hub.

Cathy Morrow Roberson is founder and head analyst for Logistics Trends & Insights LLC, a logistics market research company based in Atlanta. Previous experience includes UPS Supply Chain Solutions and niche consulting firms in e-commerce and logistics consulting. Originally from Rock Hill, S.C., she holds degrees in History and Economics from Winthrop University, a Masters in Library Science from the University of South Carolina and Masters in Business from Mercer University.
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