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S.C. Ports cuts costs amid pandemic

Distribution & Logistics
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The S.C. Ports Authority is cutting its costs by 10% to account for slowing container volumes amid the coronavirus pandemic.

The port also revised its container outlook for this fiscal year, which ends June 30, to 1.345 million pier containers. The port moved 1.364 million pier containers in the 2019 fiscal year, and has moved 1.03 million so far this year.

“Overall, we’re doing the things that you normally do in a business when you need to trim your cost structure,” said Jim Newsome, port president and CEO.

The cost-cutting measures including a hiring freeze, reducing overtime, reducing advertising and promotion, eliminating the port’s utilization of a temporary workforce, and reducing business travel and entertainment.

The port is also deferring the one-time move of three older cranes from the Wando Welch Terminal to the North Charleston Terminal until the 2022 fiscal year, which had been slated to take place in July; and deferring the implementation of a new terminal operating system until the Hugh K. Leatherman Terminal opens in March.

The port will not lay off any full-time staff and its two infrastructure projects — phase one the Leatherman Terminal and the deepening of Charleston Harbor to 52 feet — are still on schedule to be completed next year.

The 10% reduction in costs, excluding depreciation, equates to about $20 million.

“Some of that is, I will say, naturally occurring in the sense that it’s volume related,” Newsome said. “If you have, obviously, less ships, you probably have less overtime. If you have less rail dray, you have less rail dray expense. Things of that nature.”

The cost-cutting measures are taking place immediately and will continue into the 2021 fiscal year, which begins July 1.

Newsome said, though, that the goal is to have the port operate as normally as possible.

“One of our major focus is to continue as much offering hours and business as usual,” he said. “That’s what our customers want. ... The port’s an essential part of the supply chain in the Southeast. So we’ve been really focused on doing that.”

Newsome said that although the port’s board won’t officially take up approval of the 2021 fiscal year budget until June, he’s already anticipating a 5% to 10% reduction in container volumes next year.

March volumes

The port saw a 13% year-over-year decrease in the number of pier containers handled at the Wando and North Charleston terminals in March, for a total of 105,003 containers moved.

Measured in TEUs — an industry measurement that is equivalent to a 20-foot container — the ports authority moved 185,631 TEUs, for a total of 1.82 million this fiscal year. That’s a 2% increase from the total at this time last year.

The port moved 24,755 vehicles at the Columbus Street Terminal last month and handled 73,342 pier tons of breakbulk cargo. The port has moved a total of 174,095 vehicles this fiscal year and 541,661 pier tons of breakbulk cargo.

Inland Port Greer saw 13,870 rail moves in March for a total of 113,790 moves this fiscal year, which is a 15% increase from this time last year. Inland Port Dillon saw 1,614 rail moves last month for a total of 24,507 since July 1, up about 17%.

“We are proud of the dedication of both the SCPA workforce and the greater South Carolina maritime community in keeping port operations fluid in these unusual and challenging times,” Newsome said. “We continue to be very positive about the long-term outlook for both the Southeast port market and the South Carolina Ports Authority.”

Reach Patrick Hoff at 843-849-3144.

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