South Carolina State Ports Authority

Although most signs suggest a slow recovery for international trade, container volumes hopefully will stabilize and we can start the gradual process of rebuilding volume. Even as this happens, a port’s customers will continue to expect increasing value without sacrificing quality or productivity. This will require successful ports to reduce costs, increase utilization and diversify into new lines of business.

Expense reduction efforts have already hit every major industry, including shipping. These will continue over the coming year. This will happen with some expected, and some unexpected, outcomes.

For example, an ample supply of vessel capacity has enabled ocean carriers to call at more ports closer to the box’s ultimate destination, reducing expensive landside transportation costs.

Another related way for ocean carriers to reduce per unit costs will be the more frequent operation of post-Panamax ships into the U.S. Atlantic Coast, including ships of 8,000 to 9,000 TEUs of capacity. It makes all the sense in the world when you look at the numbers. Although 70 percent of the country’s population lives east of the Mississippi, only 30 percent of the trans-Pacific cargo is loaded or discharged on the East Coast.

This is a tremendous opportunity for ports in the U.S. Southeast, which has a growing population base and a substantial manufacturing sector. Deep channels and good inland access will mean more cargo even before the expanded Panama Canal is dedicated in August 2014.

Although it is certainly challenging to sustain capital development programs in the current market, ports that can keep their terminal development projects on track will be several steps ahead when the economy turns.