By Molly Parker
mparker@scbiznews.com
Published Dec. 18, 2008
Maersk Line, the S.C. State Ports Authority’s largest shipping customer, just announced that it will leave the Port of Charleston when its contract expires at the end of 2010.
The Danish company said it will begin ramping down its business with Charleston in early 2009. Maersk makes more than 400 ship calls here every year and represents about 20% of the port’s container business. Its decision to leave is likely to have a profound impact on the local maritime industry and related businesses across the state, including trucking companies and commercial developers.
Its South Atlantic Express service, which calls on Charleston twice a week, will be moved to other nearby ports starting in January. That means the Port of Charleston, which has already been hammered by declining world trade, will lose 104 ship calls next year.
Maersk has a license agreement with the SPA to operate its own dedicated terminal, largely with labor supplied by the International Longshoremen’s Association. Earlier this year, the company said it would take the SPA up on its offer to move to a common-user gate that is operated by SPA employees, which would be a less-expensive alternative for Maersk.
But such a move requires the permission of the three local ILA chapters representing longshoremen, checkers and clerks. They collectively voted against that move last week.
In its statement, Maersk said it could no longer bear the cost disadvantage between its Port of Charleston arrangement and that of its competitors operating out of the common-user gate.
“It would be unfair to our shareholders, customers and our employees to continue to operate in this environment,” Maersk spokesman Dana Magliola said.
Read a previous story on Maersk's battle with the SPA.
ILA Local 1422 President Ken Riley did not immediately return a phone call this afternoon. But he said earlier that Maersk’s request would be “in violation of an international contract” between labor and shipping companies.
“This is national law,” he said. “It would actually jeopardize the relationships between Maersk and the ILA up and down the coast.”
He accused the SPA of trying to squeeze out labor and said the quasi-state agency could offer to lower the company’s costs in other ways.
SPA spokesman Byron Miller said port executives would issue a comment on the situation later today.
For its part, Maersk blamed the ILA’s unwillingness to cooperate.
The SPA offered a “workable solution,” Magliola said, but “the local ILA refused to consent, and so we are forced to move.”
Reach Molly Parker at 843-849-3144.
This is bad news for the port, the truckers, the warehousers, and all associated with the port industry. The ILA has this on their hands. Not only have they hurt themselves, but through their short-sighted, inflexible posturing, they have effectively crippled the Charleston port and the industries reliant on it. When a historically depressed economy and a downward trend in volume already plague our prized port, the ILA has chosen a fool's path, and we'll all pay for it. Not only will we lose port jobs, but each of those employees has a banker, a barber, and a local restaurant that relies upon their business. Each of us will be indirectly affected. We all benefit from a growing port, and we'll all suffer as Maersk's leaving sucks the rest of the oxygen out of an already struggling economy. The ILA serves no one but themselves, and their monopoly should be broken.
Todd P. Garrett
It is shortsighted to blame labor!--the fact of the matter is the SPCA is at fault because of their inability to be flexible and give their customers abreak on the shortfall fees they charge---just look how the business has been leaving Charleston for the last couple of years to Savannah--Does that count for anything? Its time to send Bernard Grosclose and his management team packing!
julian n. morse
This a a case of smoke and mirrors, the ILA being blamed for Maersk decision to pull out. Charleston ILA labor is the fastest in the world for speed and production avg 41.5 container moves per hour. The SPA pays no taxes to the state or share their year end revenue with the state (2008 $54.7 million)The SPA has $191.7 million cash on hand that they keep for themselves in private accounts while competing against and eliminating tax paying, private sector jobs. The gov should not compete against it's citizens!! The ILA members are life long SC residents and have spilled their blood and guts while working on the Charleston waterfront, we pay taxes and support the local economy. Bill Harwell proud SC resident and loyal member of ILA local 1771.
Bill T. Harwell
By the way Maersk made $4.6 billion net profit last year. Sacrificing private sector, SC citizens jobs, union or non union is not the answer so that the SPA and Maersk can increase their own bottom lines. The SCSPA (gov entity)has sole responsibility for creating this mess by competing against SC citizens. The SPA common use gates and yards should either be run by the tax paying, private sector or not exist at all. ILA personel work every Maersk container gate in America but only Charleston ILA is singled out to give up these jobs. It's past time to do away with the out dated, out of touch SCSPA monopoly and their management!! Bill T. Harwell
Bill T. Harwell
Yes