The South Carolina Ports Authority (SCPA) is warning its roll-on, roll-off (ro-ro) cargo volumes could fall as much as one-third next month because BMW, Mercedes-Benz, and Volvo have shut automotive plants through mid-April due to the coronavirus disease 2019 (COVID-19).
The production halt for the three South Carolina automakers jeopardizes the movement of as many as 7,000 finished BMW vehicles through Charleston, SCPA CEO Jim Newsome told JOC.com. Container volumes shouldn’t be hurt as soon, he said, because orders for April are already on the water.
BMW announced Wednesday its Spartanburg, South Carolina, plant would close from March 29 to April 12. Mercedes-Benz shut its facilities in Charleston and Vance, Alabama, on Monday for two weeks, while its Spartanburg plant will be closed from April 3-19. The two automakers follow Volvo Group, which announced its US plants would close between March 26 and April 14.
The companies cited the health and safety of their employees, following the lead of other industries that have suspended operations to help thwart the spread of the coronavirus.
“We typically get — in about a two-week period of time — about 7,000 cars from BMW, so those won't come in the first two weeks of April,” Newsome said. “We move on a monthly basis about 20,000 cars, so roughly speaking, we would see 12,000 or 13,000 cars in April versus 20,000.”
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He added the SCPA’s container forecast of 2 percent growth for the current fiscal year is still attainable even with coronavirus and the auto plant closures. BMW has pledged that containers can still be moved to Inland Port Greer through the shutdown and delivered to the factory adjacent to the inland port, according to the port authority. It’s unclear how the other automakers will handle container flows, or how they will manage penalties for failing to retrieve or return containers within the allotted time.
Newsome is more concerned about how the economy impacts auto production in the next 12 months. The three automakers import and export components in containers, so weakness in the auto sector would reduce port volumes.
“Any decline in demand is obviously disappointing,” he said. “We try to grow our business, not the other way around, but it's unavoidable in this case.”
Newsome is currently working on SCPA’s fiscal year 2021 budget, and says he’s confident other industries, such as resin exports, will grow exponentially and possibly offset any weakness in the auto sector.