Less cargo has SC Ports Authority cutting its way toward growth

Financially, the authority saw revenues of about $401 million. That’s roughly 5% less than the authority had originally budgeted for at the beginning of the year.

“We knew that achieving the (container) volumes on account of what was going on in the market was highly unlikely,” Micah Mallace, the authority’s president and CEO, told the maritime agency’s board of directors. “So, we really focused on cost. I think we succeeded in a very substantial way and in a very short period of time.”

The cargo numbers are in line with what many other U.S. ports have experienced, as tariffs, the war in Iran and economic concerns have blunted imports and exports.

The National Retail Federation is warning that consumers could tighten their wallets if inflation continues to rise, but “spending has remained resilient despite persistent geopolitical uncertainty.”

SC Ports temporarily halts Leatherman operations in face of high costs, waning demand

The authority’s fiscal year operating costs — at $378.7 million — were down by 10% from the original budget and 5.3% from the previous year as the authority offered early retirement to some employees, revisited contract terms, delayed hiring when possible and kept a close watch on overtime, among other measures.

The agency expects to save more money now that the Leatherman Terminal was idled as of Aug. 1. That terminal, which is run by an all-union staff, costs more to operate than the port’s other container terminals, which use a combination of union labor and state employees to move cargo.

The authority has not said how long the $1 billion Leatherman Terminal in North Charleston will remain shut down, although many container lines have refused to call on the facility because of its higher costs.

Mallace said the authority is also being “much more selective” about the capital projects it takes on and has slowed construction of a near-dock rail yard designed to boost the number of cargo containers hauled by trains.

That $550 million project, called the Navy Base Intermodal Facility, was supposed to open last year but its debut has been delayed as its budget has swelled.

The authority recently reached initial terms with the railroads that will use the facility — Norfolk Southern and CSX Corp. — and expects to finalize agreements in the coming months. But it does not have a specific opening date.

Charleston’s Union Pier bids bon voyage to its final cruise ship

Demolition of the former WestRock paper mill adjacent to the North Charleston Terminal is also expected to open new revenue opportunities.

That demolition is expected to take about 18 months, but the authority is already looking to move some vehicle export services to North Charleston from Columbus Street Terminal in downtown Charleston.

The agency is working on a master plan for the rest of the 280-acre waterfront property, which the authority bought in 2024 for $105 million.

“We’re honing the projects that we will invest in, and we’re making sure that those projects are directly tied to incremental revenue generation or cost minimization,” Mallace said. “The team has really exemplified discipline around capital deployment.”

Charleston’s port has traditionally relied on manufacturing cargo, particularly automotive, for much of its business, and that has led to a reduction in market share compared to other Southeast ports that have a larger consumer goods base.

Mallace said the rates charged to container lines “have gotten a little out of whack” compared to regional competitors – a fact that has also contributed to lost market share.

He said efforts to cut internal costs will help the authority lower the rates it charges to container lines, “allowing us to get our rates back in line with our competitors,” and start to regain market share and growth.

“We still have other things to solve, of course, and that will always be the case,” he said. “But we’re in a much stronger position today.”