By Molly Parker

mparker@scbiznews.com
Published Dec. 17, 2008

The S.C. State Ports Authority announced Wednesday that it is slashing handling fees by 5% for all shipping lines calling on the Port of Charleston, an unprecedented move designed to keep container business flowing and potentially lure ships from other ports.

The three-month rate cut — billed as a midwinter rate rollback — will start Jan. 1 and run through March 31, the SPA said.

This is the first time in its history that the SPA has offered to slash fees in the middle of a fiscal year, spokesman Byron Miller said. About 2% of the world’s shipping fleet has been laid up as economic woes have drastically cut imports and exports.

“Our carrier customers are facing some very challenging market conditions,” said Bernard Groseclose, the SPA’s president and CEO. “We heard from them and we’re responding. This sends a clear signal that we are serious about their business today and in the future.”

The SPA said the move will help maintain current service levels from its carrier clients and avoid cuts that would negatively impact the local maritime industry and jobs statewide. Additionally, the SPA said, this rate reduction might be attractive to customers who may wish to concentrate business in Charleston.

Still, Miller cautioned that the SPA does not expect a drastic uptick in new business. Between July and November, the first five months of the fiscal year, container volume was down 4% compared with the same time last year. In November, container business was off 13% compared with November 2007.

“This is about building relationships with our customers,” Miller said. “Every business is looking to cut costs right now. Unlike some other ports, we’re glad we can respond favorably to them.”

Maersk Line, one of the SPA’s licensed users, said earlier this year that it had asked port executives and the local chapters of the International Longshoremen’s Association, which provides its labor, to agree to concessions that could cut its costs. Without an agreement, Maersk said it might have to leave Charleston before or when its contract expires in 2010.

The SPA offered Maersk the option to move to its common-user gate, which is operated by SPA employees. Such a move would help the shipping line cut costs, but the ILA strongly objected. ILA leadership countered that the port should offer to waive shortfall fees charged to Maersk when it fails to hit certain volume numbers. This cut is not related to that request, though Maersk does stand to benefit from the reduction in unit fees.

Molly Parker can be reached at 843-849-3144.