Military shipments being diverted from Charleston 

Loss tied to equipment heading North

Logistics and cost will shift some military cargo from Charleston's shipping channels to the Port of Philadelphia later this month, according to the U.S. Army's Surface Deployment and Distribution Command (SDDC).

Over the past decade, military deployments through Charleston have supported operations in Iraq and Afghanistan, as well as efforts related to the war in Kosovo and humanitarian missions.

While many media reports have focused on Charleston losing the shipments, local cargo is not actually handled by the S.C. State Ports Authority, which has been facing its own decline in terminal traffic. Instead, the military cargo comes through the so-called "TC Dock" at the Charleston Naval Weapons Station.

Scott Ross, a spokesman at the SDDC headquarters at Scott Air Force Base in Illinois, says the initial traffic relocating to the Port of Philadelphia is related to the return of the 10th Mountain Division out of Fort Drum, N.Y., which deployed through Philadelphia and is now returning to the states.

"The thing people have to understand is that these are complicated and complex cargo moves and that every single decision on where to send a shipment is based on a separate and distinct analysis of where the cargo is, where it needs to go, and what kinds of equipment we are moving," Ross says.

Transportation costs are also a factor, Ross explained. In this case, moving Fort Drum-bound cargo to the Port of Philadelphia will reduce the military's land transport costs, as will moving arms from suppliers in the Northeast to troops in Iraq and Afghanistan.

"The bottom line is, does the decision on a specific port of call accomplish our mission, which is to get the cargo to the right place in the most efficient way, thereby being the best use of tax dollars?" Ross says.

Charleston will continue to be an important part of the agency's mission, he says, particularly for shipments destined for the Southeast and Gulf Coast Region.

"But again, where and when a shipment will be handled depends on input from a lot of different players and agencies," Ross says.

Local Business Ties

Since the drawdown in Iraq began in earnest last year, South Carolina military contractors and logistics companies alike have seen the resetting of military assets, as equipment comes home from the front lines for repair and storage or for redeployment in Afghanistan.

It's been a golden business opportunity that's played to the region's strengths, particularly when a significant amount of these shipments were moved from Philadelphia two years ago to ports along the Southeast and Gulf Coast, including designated strategic military ports in Charleston, Jacksonville, and Beaumont and Corpus Christi, Texas.

Charleston, by virtue of its proximity to the ocean and its deep water harbor, was the recipient of a majority of the shipments, which then were trucked and railed to destinations, many of which were in the Northeast.

The impact of moving some of the military shipping business isn't yet known for local stevedores and longshoremen.

"To tell you the truth, this is the first I heard of it, so I'm not sure what it will ultimately mean," says Billy Adams, executive director of the Mt. Pleasant-based South Carolina Stevedores Association.

"What I can tell you is that many of our member companies are actively bidding on military work ... not only for work here in Charleston, but throughout the Southeast," he says.

Bill Bean, general manager for Ports America, the company that actually handles Army cargo through Charleston, says he personally doesn't know how the decision will ripple through the maritime community.

"After years of equipment flowing out through Charleston, we've more recently been seeing stuff come back in the opposite direction," he says. "Obviously, it'll be a shame to see a reduction in that cargo, but at the same time, it is clear Charleston is still going to see at least some of this activity."

Leo Holt, president of Holt Logistics, which operates a terminal at the Port of Philadelphia, welcomed the news, and says Philadelphia and Pennsylvania are home to several supply depots and military manufacturers like General Dynamics.

Holt told the Journal of Commerce that the move also made sense for other reasons. "Philly has good rail and highway connections... [and] we also have the real estate available for laying down significant amounts of cargo," he says.

In addition to working closely with the local trucking industry, SDDC Charleston also has strong relationships with Norfolk Southern and CSX railroads, which operate dedicated trains to move military cargo from the region.

Bean says regardless of the newly announced change, Ports America's contract to handle military shipments through Charleston runs through next June.

"The way these things work, they'll probably put out an RFP for the next contract in January, but between now and then, meaning between now and June 2010, we expect the military cargo will keep coming," he says.

"There might be a few less ships, but for the foreseeable future, we'll still have this cargo rolling on and rolling off ships in Charleston, and we'll still need people to stow it and lash it and move it as it does," Bean added.



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