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176 Concord Street, P.O. Box 22287, Charleston, SC 29413-2287
Contact: Erin Dhand, Manager, Corporate Communications and Community Affairs
Telephone: 843-577-8121 • Fax: 843-577-8127 • e-mail: EDhand@scspa.com


FOR IMMEDIATE RELEASE
11/20/2002

2002 State of the Port Address

Thank you, Mayor Summey.

Before I begin with my prepared remarks I'd like to take this opportunity to recognize Mayor Summey's hard work and dedication during our recent negotiations.

As you know, about three weeks ago the Ports Authority and the City of North Charleston announced that we had reached an agreement on how to divide the former Navy Base.

This followed several months of negotiations between Mayor Summey and his team, together with members of the Ports Authority's board and staff.

These negotiations were sometimes heated, but nearly always productive. And never once did we have to bring in the armored personnel carrier.

I can tell you first hand that Mayor Summey is a straight shooter. He approached every issue, no matter how contentious, in an open and earnest way.

I think it's safe to say that the Ports Authority never once had to question or second guess his position. It was understood.

It was also never in doubt how sincerely he feels about the future of his city. He worked hard to get the very best deal for his constituents.

But with that said, he also took the time to understand and appreciate the maritime industry's future needs and the needs of economic development across South Carolina.

As a result, we reached an agreement to share the Base that's truly a win-win for the City of North Charleston and for the Port. Please join me in thanking Mayor Summey for doing the right thing for his city and also, for the State of South Carolina.

Congressman Brown, members of the General Assembly, Authority Board members, Mayor Summey, community leaders, colleagues on the Charleston waterfront and other distinguished guests, it is my pleasure and honor to be with you here tonight.

As I thought about how to present this year's State-of-the-Port Address, I couldn't help but reflect on how much has changed in the transportation industry over the past 14 months.

The tragedy of Sept. 11th, the West Coast lock-out and other events have thrust our industry into the limelight. You can't turn on the TV or read a newspaper or magazine without some mention of the transportation industry.

Our business, which is usually performed out of sight and on the periphery of the economy, has probably never had as much attention. It is understandable that recent events made me want to focus on the future rather than the past.

A couple of months ago in PortCharleston magazine I used my space in the Viewpoint column for a piece titled "Moving Forward With A Positive Attitude." That is what I want to focus on tonight in this state of the port address.

Our challenge as a port, as a business community, and as a state, is to realize our position in the global economy and to capitalize on the tremendous opportunities that we have.

Tonight is not only a time to reflect on the challenges we face… it is also a time to commit to a direction and move forward with a positive attitude. So, allow me to review several fronts on which we are focusing our attention now: security, harbor deepening, bridge replacement, business attraction & retention, and port expansion. I will touch on all of these briefly.

Clearly one of the biggest issues facing our nation today is security. Last year's state-of-the-port came on the heels of one of the most tragic days in U.S. history. At that time, there was considerable uncertainty over what lay ahead.

Since then, we have taken a comprehensive approach to port security. We took decisive steps to bolster our position. While many ports have been faced with playing catch-up since 9/11, I am proud to say that Charleston is rather well positioned when it comes to port security.

We're not resting on our laurels by any means. But it is definitely reassuring to know that we have for years invested in an independent, well-trained port police force and in physical security, such as lighting, fencing and surveillance.

Earlier this year, the federal government announced that our Port would be receiving almost $2 million in funding for some specific new port security measures. We already spend more than that every year on port security, and there's certainly more that can and should be done.

Our mission as an industry is to protect our people, our economy and our transportation network while making sure that cargo flows smoothly. This requires the teamwork and patience of many, and is no easy task.

There will, no doubt, be permanent changes to the way cargo is handled. But, with the leadership of our key federal agencies here in Charleston, I am confident that we will succeed in implementing this change properly.

We have the best in the business here in Charleston - people like Julian Miller and Rod Wallace and the other dedicated men and women at U.S. Customs, as well as Commanders Merrick and DeNicola of the Coast Guard and their Coasties. We're lucky to have all of them in our port.

The private sector must also continue to take a leadership role in transportation security. After all, you are the front line, and I applaud your efforts to lead the charge in securing our transportation network.

As a matter of fact, while I'm complimenting members of our local maritime community, let me take the opportunity to call particular attention to Evergreen's recent actions. After an accident caused serious damage to one of their vessels that resulted in an oil spill here, they quickly jumped forward to undertake the necessary clean-up before it had even been confirmed they had any responsibility. I admire their forthrightness and their determination to correct any problems. Their actions were admirable and make a good public impression for our industry.

As we turn from investments in security to investments in facilities, I believe the picture is equally strong.

I'm sure you've all heard about the expansion and investment plans at other ports. There's one port that has more than a billion dollars in infrastructure work underway right now. And that port is… Charleston.

With harbor deepening, the Ports Authority's three-year capital plan, the new Ravenel Bridge and potential port expansion at the Navy Base, we have well over a billion dollars being invested in our state's future. This investment is both warranted, and greatly needed.

As we gather here tonight, the Charleston harbor deepening project is rapidly nearing its completion in 2004. The last major contract to deepen the upper Cooper River has been awarded and this work is ongoing. In a little over a year, Charleston will offer some of the deepest shipping channels on the East and Gulf Coasts at 45 feet to all major marine terminals.

The Ports Authority also continues to seek ways to do more with existing terminals. Over the next three years alone we plan to invest more than $150 million of our own funds into improving our public facilities at Columbus Street, North Charleston, Wando Welch, Union Pier, Georgetown and Port Royal.

Also, as you know, construction of the new Ravenel Bridge is underway and the Ports Authority is making significant contributions to this project.

During the past year the Authority Board voted to contribute $45 million in cash from the Ports Authority's own revenues. We are providing significant non-cash support to the project as well, providing a staging area on the Columbus Street Terminal, easements across Drum Island and dredge disposal capacity on Daniel Island.

When completed, this bridge will be the largest cable-stayed bridge in the nation - a fitting structure for our world-class port. It was designed with future navigational requirements in mind and will not hinder our competitiveness with other ports in the region.

As we look to future business volume, international commerce through the Port of Charleston continues to rebound.

August was an all-time record month for the Port of Charleston. Never before in its 330-year history has Charleston handled so much waterborne trade.

Through the first four months of this fiscal year, container volume totaled nearly 550,000 TEUs, or 20-foot equivalent container units. This is an 8.2% increase from the same period last year.

While exports continue to decline or remain stagnant, imports are leading the way. As long as consumer spending and manufacturing keep pace, Charleston could potentially reach 1.6 million TEUs again this year, fortifying our well-earned position as the fourth busiest container port in the nation.

I'm sure this is a welcome prediction for business through our Port. And it's certainly better than last year, when the Port of Charleston's container volume declined for the first time in nine years.

Everyone wants to know why Charleston's port business declined last year. Afterall, the Port of Charleston led the nation in growth for the better part of the past decade.

We obviously saw the impact of a sluggish economy even before 9/11, as well as the effects of a strong dollar that made U.S. products more expensive overseas.

But, if it were solely these factors, other ports in our region should have seen similar decreases in volume. In fact, nearly all of the neighboring states competing with South Carolina saw a recovery in volume long before we did.

Obviously, there was something else at work. I believe, as I think many of you do, that the delay over port expansion cost our port and our state a number of economic opportunities.

Fortunately, that stalemate was broken. Senator Ritchie introduced a bill in the last legislative session that got the port expansion issue on the table. Then in June, a compromise brokered by Sen. McConnell passed the General Assembly with a nearly unanimous vote.

Since then, the Ports Authority has worked hard over recent months to meet the requirements of this legislation.

It is vital that when the General Assembly returns in January, South Carolina moves forward decisively on the issue of port expansion.

Another lost opportunity will do incredible damage to our port's reputation, and indeed our state's reputation, as a positive place for business.

Shippers and ocean carriers trust those of us in the broader maritime community to move their goods to and from markets. They want to know that we are capable of meeting their long-term needs. Let's send them the right message… South Carolina is proud of its port and intends to be a major player for decades to come.

That leads to the last major infrastructure project facing our state - port expansion on the southern end of the former Navy Base.

Early next year when our members of the General Assembly return to Columbia, the Ports Authority will present a new plan for the future of our port.

I believe this plan will enjoy the support of the local maritime industry, the statewide business community, the local Charleston community, our elected officials and the permitting agencies.

Our agreement with the City of North Charleston identifies over 600 acres for potential long-term port development. The southern end of the Navy Base is a feasible location for port expansion. And it deserves the immediate attention of our state. It is imperative that we act quickly because thousands of high-paying jobs across South Carolina are at stake.

If we are successful, South Carolina can continue to leverage its most successful asset - the Port of Charleston - and can attract better, higher-paying jobs to our state.

We hope to receive the General Assembly's consent in the upcoming session that the southern end of the Navy Base is the right place to expand.

We also hope that the state will commit the funding required to complete the necessary studies and environmental work at the site. The remaining harbor deepening work also requires state matching funds.

Of course, after discussing it for over a decade, we cannot ignore Daniel Island. Everyone asks what we will do with our land there.

Let me make it clear… the Ports Authority has absolutely no plans to develop a terminal on Daniel Island. Development of a sizeable terminal on the west bank of the Cooper River precludes the need for a terminal on Daniel Island and limits that property's use to a valuable upland dredge disposal site to support berth and channel maintenance. This is what was suggested in the legislation passed in June; it is how the property was used for 50 years, and it provides a more economical and environmentally sensitive alternative to ocean disposal.

While the property may have to be sold in part or in whole in the future, I believe it would be premature to do so in haste without fully analyzing its alternative values and uses.

Since the Ports Authority was established in 1942, we have learned many lessons about our port that continue to serve us today.

We have seen that the port's future success and the state's economic opportunities depend on wise leadership and swift action by our elected officials.

When we acted on facts and with good business judgment, our port and our economy prospered. When we failed to act, our port and our economy foundered. Let's do the right thing as a state and ensure a brighter economic future.

In conclusion, as the Ports Authority celebrates its 60th anniversary, we remain focused on the future with a new direction and a positive outlook.

I am confident that with your support, Charleston will reclaim its role as the undisputed leader of ports - not just here, but around the world.

I thank you for your support of these initiatives and of the Port, and greatly appreciate the opportunity to be with you tonight.