 Port of Charleston looks to boost retail BCO business |
Source |
American Shipper |
Post Date |
07/27/2020 |
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Walmart will build a 3-million-square-foot distribution center in South Carolina, the state¡¯s port authority announced Monday, as Charleston port officials look to increase its annual volume to 1.4 million TEU and attract other omnichannel retailers building out their e-commerce fulfillment networks.
The Walmart distribution center will be located in the Ridgeville Commerce Park about 30 miles from the Wando Welch Terminal outside of Charleston, South Carolina, and is due to in the spring of 2022. Walmart has expanded its footprint across the southeast US as the retailer wades deeper into e-commerce, which requires more distribution centers because of the same-day or next-day delivery guarantees that Amazon provides on many items.
Walmart has three distribution centers in Virginia and two in Georgia, including a 3-million-square-foot facility in Williamsburg, Virginia, and a 2-million-square-foot facility in Statesboro, Georgia, each within an hour of their respective ports.
The $220 million distribution center in South Carolina will break ground in March 2021 and Walmart will be the first tenant in the Ridgeville Commerce Park. The South Carolina Ports Authority purchased the 1,000-acre site from WestRock in 2018 for $16.2 million with the goal of attracting new port-depent beneficial cargo owners (BCOs), particularly in omnichannel retail.
¡°We think it adds about 5 percent to our annual volume, although it will take a couple years to ramp up. But if you do the math, it¡¯s 1.4 million [TEU] containers,¡± Jim Newsome, CEO of the South Carolina Ports Authority, told JOC.com. The retailer would contribute approximately 65,000 TEU per year, according to the SCPA.
¡°We are excited about the impact this new facility will have on the regional economy and how it will help us better serve customers across the Southeast,¡± Greg Smith, Walmart¡¯s utive vice-president of supply chain, said in a statement.
Barbara Melvin, SCPA¡¯s chief operating officer, said finding exporters to be housed near Walmart is ¡°a critical part of our business plan¡±, noting how retail imports flow in only one direction.
¡°We want to add export transloading of basic commodities such as forest and ag products, or resins,¡± Newsome said. ¡°The idea being if you a round trip move of a loaded container out and back, you more efficiency for the trucking community.¡±
Ridgeville Commerce Park has a Norfolk Southern Railway connection on the southern side, making it possible to load commodities on the train to Charleston.
E-commerce as a new business line
Charleston has long been viewed as a port with strong ties to manufacturing. Three automakers ¡ª BMW, Mercedes, and Volvo ¡ª have been long-term customers of the port, and other newer customers such as Harbor Freight Tool and First Solar cater to construction and home improvement. Petrochemical exporters such as Eastman Chemical also use Charleston.
Newsome said the port must diversify its BCO business into omnichannel retail and e-commerce.
Credit card company Mastercard found that 22 percent of all retail sales in May 2020 were online, up from 11 percent in 2019. While the Mastercard SpingPulse report said the rate of e-commerce growth will slow once the COVID-19 pandemic subsidies and people feel more comfor in malls, some consumers might permanently shift to online shopping if the experience is good.
In the first quarter, the top three industrial real estate growth markets were in the southeast US, two of which were Greenville, South Carolina, and Savannah, Georgia, according to real estate firm CBRE, which attributes that to a population of 88.5 million people in the region with a projected 4.8 percent growth rate over the next five years.
¡°Inventory-control failures in the first half of 2020 ¡ª when many companies could not fill orders efficiently ¡ª have vividly illustrated the urgency of having more inventory on hand to support online sales,¡± CBRE wrote. ¡°These changes are leading to a massive increase in infrastructure sping and modernization of existing logistics hubs, and will put emerging industrial real estate markets in the southeast US on the ra
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