The South Carolina Ports Authority said it plans to break ground on the new intermodal facility in Dillon during the first quarter of 2017.
The South Carolina Ports Authority (SCPA) board of directors on Monday authorized the agency’s staff to proceed with construction of a second inland port in Dillon as part of an ongoing strategy to build cargo business by making it easier for shippers in the mid-Atlantic and Midwest regions to move goods through the Port of Charleston.
The SCPA said it plans to break ground on the new intermodal terminal in the first quarter of 2017. The site is located on the I-95 corridor in the northcentral part of the state, near the North Carolina border. The site offers access to an existing mainline operated by Jacksonville, Fla.-based Class I railway CSX, which will serve the new facility. The initial terminal buildout will accommodate about 45,000 container moves per year.
Executive Director Jim Newsome said in his annual “State of the Port” address at the North Charleston convention center that he expects the facility to commence operations in the fall of 2017.
“Building intermodal infrastructure in our state goes hand-in-hand with the significant investment we are making to our port facilities in Charleston,” he said in a prepared statement.
Intermodal rail is a prerequisite for ports with aspirations of handling larger containerships being deployed today because it helps to get more cargo in and out of container yards, while relieving pressure on truck gates and roads.
The port authority and state government plan to spend about $2.2 billion over a 10-year period on infrastructure capable of accommodating big ships when fully loaded. Projects include deepening the harbor to 52 feet, purchasing new super post-Panamax cranes, extending berths and strengthening the wharf at the Wando Welch Terminal, automating truck gates and adding other technology, building a new container terminal, and developing an intermodal rail facility next to the new terminal.
The SCPA announced in late April that it was considering Dillon for an international intermodal terminal.
The inland port concept essentially brings the Port of Charleston closer to manufacturers and retailers that are not located near the coast by allowing their motor carriers to make shorter truck hauls to a terminal connected to the seaport by rail rather than make the long roundtrip to the port. The rail relay benefits shippers by reducing trucking expenses and helps truckers make more revenue-bearing trips within the federally mandated work limits for drivers, who often experience more traffic congestion in port cities and can face delays getting in and out of crowded marine terminals.
The dry port also serves as a staging area for empty containers and chassis, keeping the equipment off valuable seaport property needed to store loaded containers.
The SCPA’s new rail hub gives it greater ability to penetrate markets covered by the ports of Savannah, Virginia and Wilmington, N.C.
“Charleston is absolutely going on the offense” against Savannah and the Georgia Ports Authority, Kiernan Conway, a senior vice president and economist at SunTrust Bank, said during a presentation at the South Carolina International Trade Conference held at the Wild Dunes Resort outside Charleston.
The SCPA’s first inland port in Greer, 212 miles to the west of Charleston, has exceeded expectations in less than three years since opening.
Source: South Carolina Ports Authority
Volumes at the intermodal terminal, which is served by the Class I Norfolk Southern Railway, grew 76.5 percent during its second full calendar year of operation, with 75,111 total moves on and off trains – well ahead of the agency’s target of 100,000 annual moves within five years. Importers and exporters in Tennessee, Georgia, North Carolina and portions of Virginia use the inland port, according to SCPA officials.
Volumes in Greer rose 21 percent through the first eight months of the year to 58,080 lifts, compared to the corresponding period a year prior.
For the fiscal year ended June 30, rail moves increased 57 percent from the prior fiscal year to 91,698 rail moves.
The facility is averaging more than 7,500 rail lifts per month now, which translates into hundreds of truck transfers a day. Trains haul is up to 200 containers per day, six days a week, between the Upstate facility and the NS yard, located a short truck dray from the marine terminals in Charleston.
“Inland Port Greer has allowed the port to increase the cargo volumes moved by intermodal rail and become a key catalyst for economic development in the Upstate,” SCPA Chairman Pat McKinney said in a statement. “We are confident that Inland Port Dillon will realize similar benefits for the port and our customers, increase local business opportunities and provide solid job growth.”
Inland ports are intended to spur industrial development. Dollar Tree and Rite Aid, for example, recently built massive new distribution centers in the Greenville/Spartanburg metro area near Greer. Japan’s Kobelco Construction Machinery Co., Ltd., which makes construction equipment, such as excavators, recently built a plant in Spartanburg County to serve the North American market. In addition, Techtronic Industries, which makes a wide variety of products, has a new distribution center in northwestern South Carolina to support its manufacturing operation there.
Dillon was selected in part because there is a significant base of existing port users in the area that will serve as the anchor cargo customers, the SCPA said.
SunTrust’s Conway said the Dillon facility also sets up well as an e-commerce and air cargo consolidation center because of its proximity to the Charlotte-Douglas International Airport. Charlotte is becoming an air cargo hub as cargo is pushed out of large airports, such as Atlanta, Miami and New York, to focus on more profitable passenger traffic.
The Port of Charleston could see more businesses related to e-commerce as a result. Dillon is poised to become a logistics ecosystem, with distribution and e-fulfillment centers, and truck terminals clustered around the inland port. Imported goods could come into Charleston and move by train to warehouses where e-commerce orders could be fulfilled and shipped to consumers by multiple modes, including by air from the Charlotte Airport. Retailers and their third-party logistics providers will likely also pull in domestic manufactured goods for their inventory. On the export side, freight shipments can be consolidated and repacked before being routed to Charleston, or to Charlotte for air transport.
Conway said that Dillon gives shippers the option of not having to move some imported goods all the way to Memphis, Tenn., or Louisville, Ky., where major logistics clusters have sprouted around the FedEx and UPS super air hubs.
“I can look at doing shorter haul to Charlotte and accelerating my whole supply chain,” Conway said.
“So you have here an area that’s ripe for economic development. It has great infrastructure in terms of the interstate. This could be a huge magnet for industries to do supply chain distribution,” he added. “Dillon has the potential to create even bigger efficiencies than Greer because Greer is pretty small. Dillon will have probably, I project, twice the success and speed of adoption, as Greer did.”
Newsome didn’t rule out the possibility of investing in further intermodal terminals. “We’ll continue to look for opportunities to expand our inland network,” he told a group of reporters following his address.