Whether you're looking into commercial property for your office or you want to start investing…
The South Carolina Port Authority has announced an inland port will be developed in Greer, South Carolina. Below, you will find some bullet points which describe the situation as it stands.
The Purpose: It is designed to relieve traffic congestion, enhance port competitiveness and spur economic development. Rather than goods being loaded and unloaded in Charleston, shipping containers can just be transferred between ship to truck or ship to train.
The Site: It will most likely be developed on a 30 acre site, located at the intersection of 290 and Verne Smith Parkway. Compared to other inland ports, it is small. A couple examples include: Virginia Inland Port (161 acres); Huntsville (6,080 acres); Columbus, OH (300 acres).
Intermodal Transportation: Defined as transportation using multiple modes (rail, truck and ship). Due to potential cost and time savings companies, intermodal transportation is becoming more popular.
When: Unknown. However, Authorities say port “needs” to open in the second half of 2013.
Cost: SCPA plans on spending $23.5 million in 2013 for the inland port.
Speed: An overnight train service over the 218 miles between Charleston and the upstate South Carolina port, where a container could come into the port late in the day and be available for customers in the upstate the following Monday.
Distribution: Trade routes are changing, resulting in greater demand for access into and out of East Coast ports. Reasons for these changes include congestion in West Coast ports, increased efficiency of shipping, and expected expansions of the Panama Canal. The success of freight rail relies on the supportive infrastructure, especially the intermodal facilities(i.e. Inland ports)
Traffic: Potentially, the container facility has the potential to push 50,000 all-truck container moves to a more efficient intermodal (truck and rail) route.
Business Production: Intermodal transportation (truck and rail) can speed up a companies supply chain and reduce logistic costs.
Infrastructure: Brings a component of the port along the I-85 corridor.
Relieves Port Congestion: The idea is to move time-consuming sorting and processing of containers inland, away from the Charleston Ports.
This inland port will be relatively small, compared to others around the country. However, long term speaking, it will positively effect the Greer’s economic climate, and specifically, the distribution and warehouse market.
Recently, I attended the Greer Inland Port GSA Power Event for a progress update. The speaking panel included Jack Ellenberg (Vice President of Economic Development, SC Ports Authority), Dave Edwards (President and CEO, Greenville-Spartanburg International Airport), and Brian Gwin, Industrial Development Manager of Norfolk Southern Corporation. The following is an update on the Greer Inland Port, GSP and the potential economic benefits.
The Greer Inland Port is scheduled to open September 3, 2013. As a broker (not a contractor) after being on site this week, I believe this is certainly possible it will be operational by September, but I can not see it being fully complete by then. However, there has has been major progress. Despite the massive amounts of rain, 180,000 cubic yards of dirt have been moved since March. Work is being done on the rail. The concrete structure is being built. Paving will start soon.
The Inland Port will encourage companies to invest in the surrounding area, thus creating jobs. To operate it will need 25 workers. Further, it will attract other companies. If the Port Royal Virginia Inland Port is a mirror project, it will entice direct investments from 20-40 companies over the long term. Please check www.port-of-charleston.com for job updates.
The surrounding area’s industrial site availability should help. All of the industrial sites are listed on SC Dept. of Commerce website (http://maps.sccommerce.com/silvermap/viewer.aspx). Greenville has 32 industrial sites and 40 in Spartanburg. Site availability is not the real burden keeping more industrial projects from happening; it is the market.
Since 2010, industrial market vacancy rates have decreased steadily.
Year 2010 – 10%*
Year 2011 – 9.9%*
Year 2012 – 8.7%*
*Numbers are approximate
Although the vacancy rates are decreasing, market rates are still not high enough to justify development. More specifically, users or tenants want move-in ready product and all players needed to pull it off (developers, investors, financiers) are not comfortable with the risk involved building speculative product (if you build it, they will come).
Due to GSP’s proximity and air cargo capacities (present and future), this inland port is unique. No other inland port has an air component. GSP is strong and getting stronger. Since 2009, its employment numbers have grown 158%, and its income has grown 52%. GSP has 2,000 acres of contiguous land, and much of the development plans call for distribution which will help fill the Class A distribution warehouse market need. Recently, GSP signed a 45 acre ground lease with Centre Pointe(structure in pictures) who is to build a $13.4 million dollar 200,000 square foot (expandable to 400,000) multi-tenant Class A distribution facility. The terminal improvement program is the first enhancement plan since 1962 which is when the airport was built. Said program will modernize the main terminal. As for funding, the $115 million dollar plan will be 80% funded by the airport and 20% from the two different federal government funds.
GSP Master Plan:
Norfolk Southern will be the exclusive rail provider serving most other major markets along the East Coast between Jacksonville and New York City. The company has 687 employees in South Carolina, operates 783 miles of track (existing line next to the port site), and has facilities including Andrews Yard, Hayne Yard, and a division headquarters in Greenville. NS serves most other major markets along the Eastern Seaboard and already has an existing line set up for the project.
Why does the U.S. need inland ports? It is an answer to the United States Global heightened distribution competition. With emerging competitive distribution players in Asia and Latin America, the U.S. is searching to cut costs and gain efficiency in the distribution market. Intermodal is growing +/-10% per year, and is making U.S. distribution cheaper and more efficient. The Greer Inland Port is predicted to reach 6.5 million people in a 100 mile radius via the Norfolk Southern rail.
Greer Inland Port Conceptual:
Something else of note is that Liberty Property Trust plans to develop a 156,000 square foot Class A distribution multi-tenant warehouse at Caliber Ridge Industrial Park(close to 85 and 101). They have signed one Tenant, and apparently the Tenant is involved with manufacturing automobile filters.
In summary, it will take some time to feel the economic impact of the Inland Port. It has been twenty-one years since BMW was announced, and we are just now truly feeling the impact. Maybe not on the same scale, but the time needed to see an impact may be just as long. Do you think the Inland Port will change anything? If so, what will the change look like?