Posted on October 24, 2025
Days ahead of a major speech to maritime industry leaders and less than two weeks after taking the helm of the S.C. State Ports Authority, Micah Mallace is putting the state agency’s development plans under a microscope.
That includes more than $1 billion worth of expansions, terminal improvements and other initiatives to boost cargo levels at the Port of Charleston.
At stake is whether some projects might be put on the back burner or agreements reworked as the authority looks to balance wants with needs and costs.
“What we’re doing right now is an assessment of all of our capital projects,” said Mallace, who returned to the authority on Oct. 13 as its new president and CEO.
Mallace previously spent more than a decade at the authority, including as its top sales boss, before a three-year stint in the private sector.
He will give his first State of the Port speech, an annual update on port activities, on Oct. 28.
The authority “wants to make sure we’re delivering those projects in the best possible way so they are competitive and useful to our customer base, our constituencies and our stakeholders,” he told the SC Daily Gazette.
Under close scrutiny is a $690 million rail-served cargo transfer yard adjacent to the authority’s Leatherman Terminal in North Charleston, which is both behind schedule and well over budget.
State lawmakers three years ago set aside $550 million in taxpayer funds for the 118-acre rail yard, called the Navy Base Intermodal Facility, but they haven’t always felt they’ve been kept in the loop over its progress.
For example, members of an oversight committee said earlier this year they were surprised by the rail project’s rising costs and slow progress.
A reassessment is long overdue, said Sen. Larry Grooms, a Republican from Berkeley County and chairman of the Senate Transportation Committee, which oversees the authority.
“I think that’s the only option the port has right now,” Grooms said, adding that for too long the authority has forged ahead with big construction plans apparently without regard for their financial success.
“They’ve got to take a look at their entire capital outlays — not just the cost of capital but the cost of labor,” Grooms said. “The other option would be to continue building it and open it at a price where no one would use it.”
The authority is forced to use unionized crane operators at both the rail yard and Leatherman Terminal — the result of a court victory by the International Longshoremen’s Association. Grooms said the more expensive labor costs have already put Leatherman at a disadvantage to the port’s other terminals due to the higher costs absorbed by the authority.
He fears the same could happen at the rail yard.
“There has to be a lot of pencil sharpening and other agreements reached in order to make the enterprise of the Leatherman Terminal make financial sense,” Grooms said, adding that the railroads also haven’t finalized agreements to use the rail yard.
“While they’re moving forward, these basic questions should have been vetted and there should have been answers before now,” he said. The rail yard needs to be completed, “but you can’t open this thing until they can get a handle on their costs and how they’re going to distribute those costs to their customers.”
After missing a July 1 completion deadline, the authority’s previous CEO announced plans to open a segment of the rail yard in January 2026. The rest of the project – known as the southern access – wouldn’t open for at least several months later.
Mallace says it makes more sense to open the entire project at one time, although he doesn’t have a specific date in mind.
A partially opened rail yard would have given CSX Corp. a competitive advantage over Norfolk Southern, the other railroad planning to use the facility, because it could use an existing line to access the site. Norfolk Southern needs the southern access, which has not yet started construction.
“The intent is to open it so it is accessible to both railroads,” Mallace said.
The railroads also don’t want to give up their own cargo transfer hubs in North Charleston — key revenue sources for both carriers.
Mallace said the authority will work with CSX and Norfolk Southern to find additional uses for their individual facilities while continuing to focus on growth at the intermodal site, which gives the port the near-dock rail it says it needs to remain competitive.
“This affords the railroads, and us, an opportunity to generate other volume at their current facilities,” he said. “We’re fortunate that there’s still a runway for a lot of growth in some commodity sectors,” adding those could give the railroads “more revenue-generating capacity” at their existing hubs once the rail yard opens.
A planned expansion of Leatherman Terminal, including a second wharf for big container ships carrying up to 16,000 cargo boxes at a time, could also be slowed.
“I don’t see how you can do phase two right now,” Grooms said. “It’s too costly to operate right now, much less doubling it. Right now, they need to get a handle on the costs and get assurances from the steamship lines they’re willing to pay them and continue to send ships to Charleston. Without that, we could end up in a downward spiral.”
The first phase of Leatherman, which opened in February 2021 at a cost of $1 billion, is the East Coast’s newest and most modern terminal but its high operating costs have steered ships to the port’s older facilities. To make it viable, Grooms said, the ILA has to make concessions “with how labor is applied and the cost of that labor.”
Ken Riley, president of the ILA’s local office, could not be reached for comment. The dockworkers’ union has taken a hardline stance on labor negotiations in the past.
Leatherman handled 75,931 cargo containers measured in 20-foot increments in the fiscal year that ended June 30. That’s about one-tenth of the terminal’s capacity. Wando Welch Terminal in Mount Pleasant, on the other hand, handled more than 1.1 million containers.
Escalating costs and the seeming lack of a coordinated growth plan are among the reasons Barbara Melvin abruptly resigned as the authority’s president and CEO in August after three years on the job.”
“That was some criticism I’ve had for a while and now it’s all coming to a head and folks are going ‘You know, there is a problem’,” Grooms said. “It’s going to require a lot of work with a lot of the customers over how costs are going to be allocated.”
It’s a key reason why Mallace is re-evaluating the authority’s plans, with an emphasis on not rushing into anything.
“We want to do this right,” he said. “We’re assessing right now what needs to happen first, second, third … and let’s get a timeline that is conservative and realizable. I don’t want to put my name on something that’s overly optimistic. We want to deliver what we say we deliver.”
The Charleston area’s maritime community could get more insight into the port’s future when Mallace delivers his State of the Port speech. These are challenging times for the industry, with rising costs, less cargo and the future impacts of tariffs.
“We’ve got a few tough months ahead,” Mallace said, adding that the port can play an oversized role in how the local industry fares going forward.
“The maritime community, all of the vendors, the logistics companies, they depend on us to go out and make the market irrespective of what the general trade looks like,” he said. “So we’ll be talking about that at the State of the Port, that it’s our primary focus. It has to be.”
