South Carolina’s new inland port at Greer will get a big increase in the volume of autos and containers it handles for rail shipment to and from the Port of Charleston over the next couple of years. The leg up will come from the $1 billion investment that BMW announced March 28 to expand production at its automobile plant in nearby Spartanburg over the next two years.
BMW will boost production there of its X3 and X5 crossover vehicles by 50 percent to 450,000 vehicles by 2016 and start producing a larger new model, the SUV X7, which will compete with other large SUVs like the Cadillac Escalade and the Ford Expedition. The new investment will turn the Spartanburg plant into the largest BMW plant in the world.
BMW already exports 250,000 autos through Charleston out of its annual production of 350,000 autos at its South Carolina plants. “If you ramp that up to 450,000 units, it’s easy to speculate that could lead to an increase of about 90,000 to 100,000 vehicles moving through Greer to Charleston,” said Jim Newsome, president and CEO of the South Carolina Ports Authority.
BMW is moving its South Carolina export operations into a 413,000-square-foot facility at the 220-acre inland port. The SCPA and Norfolk Southern invested a total of $51 million to open the new rail terminal in Greer last November linking the region’s many auto and tire plants by rail with the Port of Charleston. The SCPA shouldered $43.5 million of the total because it wanted to operate the terminal, which is open 24/7 six days a week. NS invested the balance building new tracks into the terminal.
Newsome said the port also invested in its Columbus Street Terminal to beef up its capacity to handle non-containerized cargo in 2010 in the expectation of the growth in BMW export volumes.
Charleston and the inland port at Greer are also likely to see an increase in containerized imports of BMW engines and transmissions for the cars the company makes in Spartanburg. “I expect there will be a similar increase in container shipments of parts, engines and transmissions,” Newsome said in an interview with the JOC.
The BMW investment will also boost the port’s containerized exports. “We’ll also see an increase in exports of knocked-down vehicles and after-market parts to repair the cars BMW exports,” Newsome said.
While BMW plans to produce about 50,000 of its new X7 model at the Spartanburg plant, it probably won’t export many of these, as they are designed for the domestic U.S. market and too large for many overseas markets.
The top five companies that the SCPA had targeted as the primary users of the new Greer terminal have started using it, although Newsome declined to name the other four. Three of them are importers, and two are exporters. The rail ramp handled about 2,500 containers in February. “So it’s certainly meeting my expectations.” He said other companies that have been looking at locations for new plants and distribution centers are now looking at Spartanburg County because the Greer inland port is within 500 miles of 100 million consumers.
The new BMW investment is not the only large investment that foreign manufacturers are making in and around Greer. The Japanese carbon-fiber manufacturer Toray Industries announced in February that it will invest $1 billion in a new production facility on 400 acres in Spartanburg County.
But the new plant will probably not bring an increase in shipments through Greer or Charleston. Newsome said the plant will produce carbon fiber for the big new plant that Boeing is building in North Charleston to assemble its 777X aircraft. It will also supply material for BMW’s plants.