Posted on June 14, 2023
More labor trouble at West Coast ports, including shutdowns earlier this month, will likely accelerate the ongoing trend of cargo imports shifting to the Port of Charleston and other East Coast and Gulf Coast gateways, retail experts say.
Dockworkers temporarily walked off the job at Oakland and Long Beach, Calif., as tense negotiations between terminal operators and the International Longshore and Warehouse Union, which represents 22,000 workers, continue to stall. Their contract expired in July 2022, and both sides remain far apart on the key issue of wages.
Full-time ILWU workers earn, on average, nearly $200,000 a year and the difference between what they are seeking in a new pact and what terminal operators are willing to pay is “astronomical,” according to a report in The Wall Street Journal.
The drawn-out labor negotiations are “casting a long, dark shadow” on the West Coast’s ability to move imports quickly, writes trade analyst Beacon Economics, adding “the clash threatens to disrupt the flow of trade and is another black mark on the tarnished reputation West Coast ports have suffered due to periodic breakdowns in labor relations.”
Bloomberg reports nearly 40 container ships were delayed last week at Los Angeles and nearby Long Beach because of the labor strife.
That plays right into the hands of maritime operators in Charleston and elsewhere, who can boast of having congestion-free terminals and open berths. Barbara Melvin, president and CEO of the State Ports Authority, said in March that retailers are increasingly interested in bringing their cargo to Charleston.
“They are looking at how to diversify their supply chains, and we are on the list,” she said.
Twenty years ago, Long Beach and Los Angeles handled 57 percent of all cargo moving between Asia and the United States. That fell to 45 percent last year, according to the U.S. Commerce Department, and ports along the East and Gulf coasts continue to eat into that market share.
“The accelerating shift in manufacturing from China to South Asia further threatens the competitive position of West Coast ports …,” Peter Tirschwell, vice president of global intelligence and analytics at S&P Global Market Intelligence, wrote for The Wall Street Journal. “South Asian exporters prefer Suez routings to the East Coast.”
Boosting market share is important as the number of imported containers continues to fall in the post-pandemic economy. Import cargo volumes at the nation’s major ports are expected to show a 22 percent decline during the first half of 2023 compared to last year, according to data from the National Retail Federation and Hackett Associates.
At Charleston, overall cargo has declined 19 percent since last year’s pandemic-era highs, and loaded imports have fallen by 28 percent. But the latter figure has increased in the past couple of months and is tracking above pre-pandemic levels by double digits on a percentage basis.
On the line
Nucor Corp. plans to add a galvanizing line at its Berkeley County steel mill (above).
Steel giant Nucor Corp. has filed an environmental permit application to build a $425 million galvanizing line at its Cooper River mill near Huger.
The expansion, first announced in September, applies a zinc coating on sheet metal to protect against corrosion and extend the product’s lifespan.
Charlotte-based Nucor said the new line is needed because of the increased demand for automobiles and appliances and the treated metal needed to build them.
It will be able to produce galvanized steel up to six-feet wide and will have an annual capacity of about 500,000 tons, or about one-seventh of the mill’s overall capacity of 3.5 million tons.
In addition, the Berkeley County site makes I-beams used in the construction industry.
The expansion will add about 50 jobs to Nucor’s local workforce of 975 and is expected to be operating by mid-2025.
The project will bring the company’s investment in the steel mill off Cainhoy Road to more than $1 billion since it opened in 1995.
The S.C. Department of Health and Environmental Control issued a public notice for the permit request last week. The agency is accepting comments at its website through June 17.
Ramen ramp-up
Saluda-based Palmetto Gourmet Foods has announced a $100 million expansion that will add a gluten-free ramen noodle factory and solar power plant to its Midlands production site.
The investment will be part of the launch of a new line of meals and snacks. The solar infrastructure will eventually let the company switch to 100 percent renewable energy.
Reza Soltanzadeh, Palmetto Gourmet’s co-founder and CEO, said the work “will expand our ability to meet a critical need for many people in the U.S. and around the world — access to nutritious, high-protein meals at an affordable price.”
In addition to the new gluten-free products, the company will expand its Ramen Express and Chef Woo product lines at its existing plant, scaling production from its current capacity of 600 million meals per year to more than 1 billion.
The increase is tied, in part, to Walmart decision to carry more of the company’s products in some of its regional stores. Palmetto Gourmet said its foods are also sold nationwide at Costco and other retailers and in Canada.
The company, which began as a start-up in 2019, currently employs 300 workers and expects to add 700 more as the expansion proceeds in coming years. It’s a wholly owned subsidiary of Canada-based Borealis Foods.
