Cargo volumes dip 5% as Charleston port chief charts a three-phase comeback
The South Carolina State Ports Authority is advancing a three-part comeback plan to restore its competitiveness in the South Atlantic region. Micah Mallace, president and CEO of the South Carolina State Ports Authority, stood before a record crowd of 1,150 people at the North Charleston Convention Center on Tuesday to deliver his annual State of the Port address, hosted by the Propeller Club of Charleston. The port authority is currently working through the second phase of a three-part comeback plan designed to restore its competitiveness across the South Atlantic, according to SC Daily Gazette reporting.
The numbers tell a story of deliberate retrenchment followed by cautious optimism. Operating expenses have been trimmed by more than 20% over the past year, directly fulfilling a pledge Mallace made during his inaugural speech twelve months ago. Those savings have been passed straight on to customers, lowering container ship rates that previously outpaced regional competitors like the Port of Savannah. Even so, year-over-year cargo volumes closed the most recent fiscal year down 5%. Yet the financial ship is steadying. Businesses have already committed to bringing an additional 159,000 containers through the port in the coming year—representing roughly 6% of the port’s annual total—backed by a 6% increase in containerized cargo already on the books.
New business brings diverse cargo mix through 2027
The cargo coming down the pipeline looks different than it used to. Historically, the port relied heavily on a strong state manufacturing base. New business coming online through 2027 brings a broader mix of industrial products, consumer goods, and export commodities.
“This new business is a direct result of the port team’s willingness to rethink how we operate, find innovative solutions and deliver the exceptional service our customers need to grow,” Mallace said, adding that while cost cuts were largely across the board the agency’s sales staff was doubled.
Consumer goods account for 81% of the value of containerized goods nationwide, but they make up only about 50% of Charleston’s port traffic. The strategy now centers on luring new retail distribution centers to South Carolina to capture that lucrative market. Retail goods continuously outpace other import categories throughout the Southeast, though a statewide lack of warehouse space remains a persistent roadblock. As Mallace put it simply to the convention crowd: where distribution centers locate, the ships follow.
Labor costs and the unanswered question of Leatherman Terminal
The ultimate test of this three-phase recovery remains locked behind the heavy iron gates of the Leatherman Terminal in North Charleston. On August 1, the authority indefinitely paused operations at the $1 billion facility. High unionized labor costs left the terminal underutilized, a financial strain the port’s other container terminals simply do not share.
Mallace made it clear that the facility will not reopen in a hurry. The third phase of the comeback plan, which focuses on making the operational gains stick, will only be deemed successful when volumes and operating cost structures naturally dictate that the Leatherman Terminal can stay open for good. Until then, the facility stays dark.
Negotiations also continue with Norfolk Southern and CSX Corp. regarding the Navy Base Intermodal Facility, a near-dock rail yard designed to move cargo boxes. An official opening date for the rail yard has not yet been scheduled while contract talks proceed. The recovery is burning like kindling, Mallace warned the room—walk away and it goes out, but tend to it together and it grows.
