Charleston Port loses biggest customer

Charleston just lost the biggest customer of the local port which will have an impact on the local shipping business. Hopefully they will be able to resolve this and keep Maersk in Charleston. Below is the article from the Charleston Regional Business Journal on the situation.

Maersk Line, the S.C. State Ports Authority's largest shipping customer, just announced that it will leave the Port of Charleston when its contract expires at the end of 2010.

The Danish company said it will begin ramping down its business with Charleston in early 2009. Maersk makes more than 400 ship calls here every year and represents about 20% of the port's container business. Its decision to leave is likely to have a profound impact on the local maritime industry and related businesses across the state, including trucking companies and commercial developers.

Its South Atlantic Express service, which calls on Charleston twice a week, will be moved to other nearby ports starting in January. That means the Port of Charleston, which has already been hammered by declining world trade, will lose 104 ship calls next year.
MaerskMaersk has a license agreement with the SPA to operate its own dedicat
ed terminal, largely with labor supplied by the International Longshoremen's Association. Earlier this year, the company said it would take the SPA up on its offer to move to a common-user gate that is operated by SPA employees, which would be a less-expensive alternative for Maersk.

But such a move requires the permission of the three local ILA chapters representing longshoremen, checkers and clerks. They collectively voted against that move last week.
In its statement, Maersk said it could no longer bear the cost disadvantage between the Port of Charleston and its competitors operating out of the common-user gate.

"It would be unfair to our shareholders, customers and our employees to continue to operate in this environment," Maersk spokesman Dana Magliola said.

ILA Local 1422 President Ken Riley did not immediately return a phone call this afternoon. But he said earlier that Maersk's request would be "in violation of an international contract" between labor and shipping companies.

"This is national law," he said. "It would actually jeopardize the relationships between Maersk and the ILA up and down the coast."

He accused the SPA of trying to squeeze out labor and said the quasi-state agency could offer to lower the company's costs in other ways.

SPA spokesman Byron Miller said port executives would issue a comment on the situation later today.

For its part, Maersk blamed the ILA's unwillingness to cooperate.

The SPA offered a "workable solution," Magliola said, but "the local ILA refused to consent, and so we are forced to move."