South Carolina officials have received quite a shock. Rather than getting an expedited project to deepen Charleston Harbor, the Army Corps of Engineers estimates such a project won't be completed until 2024.
That is, if it even gets the go-ahead.
In two years, the newly-expanded Panama Canal will start handling container ships that are twice the size of the ones regularly calling on east coast ports in the U.S. The average capacity now is about 3,000 containers (or TEU as they’re called – 20-foot equivalent units). The new so-called "post-Panamax" ships carry around 8,000 containers.
The Port of Charleston can handle the new ships now but only at high tide. They draw about 46 to 48 feet of draft fully loaded. State officials want to deepen the harbor from the current 45 feet to 50 feet so the ships can call at port 24/7.
Here’s the catch: Federal regulations lay out a lengthy process of approval and design before one spoonful of mud can be dredged. That process just got under way – which means it may be a decade between the canal’s opening and Charleston’s ability to handle the big ships any time of day.
South Carolina officials say that's just too long.
Republican Sen. Lindsey Graham of South Carolina gave Fox News an apocalyptic assessment of the delay, saying, “If the port loses its competitive edge -- if it loses its ability to accept shipping as shipping is going to change -- then our whole economy comes to a standstill."
Four ports along the East Coast should have 50-foot harbors by the time the canal opens – New York/New Jersey, Baltimore, Norfolk and Miami. The Port of Charleston is busier than Baltimore and Miami, yet it couldn’t get any money in President Obama’s 2012 budget to fund the years-long studies it will take to approve dredging. In a last-minute bit of finagling, Graham managed to find $4.2 million to keep the process going.
“We’re a red state in South Carolina,” Graham says. “It's no accident that we weren’t in Obama’s budget. If I had voted for health care – Obamacare – I bet we would have gotten our port deepened – but I’d have been at the bottom of the harbor ... so ...”
The Army Corps of Engineers, which will conduct the studies and do the eventual work, understands the frustration of state and port officials. Lt. Col. Ed Chamberlayne said the Corps will make every effort to speed up the process.
“It makes absolute sense that we need to move as quickly as we can,”Chamberlayne said. But he emphasized the need to “be as thorough as we can with our process. Because we want to get it right the first time. If we don’t get this feasibility study right, we may never get to construction.”
The study is estimated to take eight years and cost $20 million. Under federal rules and regulations, the Army Corps has to meticulously study all the possible implications of port deepening: the environmental impact of digging up the channel bottom, shoreline and channel dynamics, saltwater intrusion up the rivers, oxygen content of the water and its effect on fish and a cost/benefit analysis of deepening versus leaving it as is.
All the data they collect and analyze must be peer reviewed. And that takes time.
Ironically, Charleston just went through a 14-year-long process to deepen the port from 40 to 45 feet. That project was completed in 2004. The need for another lengthy assessment strikes port officials as unnecessary.
“We believe the process can be done faster,” Jim Newsome, head of the South Carolina State Ports Authority, said. “That’s the operative message. And we need to move along as fast as we can, or the region’s going to suffer.”
The Ports Authority said a single inch of extra draft in a ship means millions of dollars in added commerce. Here’s how they break it down:
• 358,000 pounds of coffee, worth more than $500,000
• 36 John Deere tractors, worth more than $2.4 million
• 58,000 pairs of Adidas shoes, valued at $5 million
• 9,600 laptop computers, valued at $8.5 million
• 1,540 55-inch TVs, worth approximately $3 million
You can see why Charleston doesn’t want a 10-year lag between the time the bigger ships begin using the Panama Canal and the time the port in South Carolina can accept them on a regular basis.
Charleston Mayor Joe Riley said upgrading the port is crucial to South Carolina’s economy.
“I’ve spoken to the president about it,” Riley said. “It’s a very important infrastructure investment that makes our country more competitive, and obviously it makes Charleston and the port of Charleston more competitive.”
Charleston also is locked in a fierce competition with nearby Savannah, Ga., for port expansion. The Savannah project is expected to cost $700 million. Charleston says it can upgrade its port for less than half of that, so it should get priority.
Newsome said deepening the harbor is an important component of economic growth, and he points to the emerging renaissance in American manufacturing.
"We have a chance to gain, export-wise, which is where we have suffered,” he said. “You can’t export heavy cargo without deep harbors.”
Expansion of the Panama Canal certainly didn’t take federal officials by surprise. The project was green-lighted in 2006. Yet with only two years of construction left on the canal, the U.S. government still doesn’t have a national plan to upgrade ports to take economic advantage of the big ships that will soon come to call.
Panamanian officials boast that the canal will be a huge economic boon for their nation – creating jobs and lowering poverty. Which has South Carolina officials wondering – if Panama has its act together over the future of shipping, why don’t we?