south carolina state ports authority (scspa) strategic...
TRANSCRIPT
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Contents
• Introduction
• Overview of the SCSPA
• SCSPA Strengths, Weaknesses, Opportunities, and Threats(SWOT) Assessment
• SCSPA Mission Statement and Objectives
• SCSPA Strategic Issues
• SCSPA Strategic Initiatives
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Introduction
• The South Carolina State Ports Authority (SCSPA) Board initiated astrategic planning effort in February of 2009:
– Objective: to establish a clear direction and strategic priorities for addressing theSCSPA’s market, competitive, demand, and financial challenges
– Key elements:
• Refine and enhance the SCSPA’s mission
• Establish clear priorities
• Develop a strategic context for setting policy and making decisions
• Management-driven: the plan was to be prepared under the guidance and participationof the SCSPA’s Senior Management Team
• The SCSPA’s Board retained Norbridge, Inc. (Norbridge), a maritimetransportation and supply chain consulting firm, to assist in preparing theplan. Norbridge responsibilities included:
– Providing the framework
– Conducting interviews
– Establishing the facts
– Facilitating planning sessions
– Preparing working papers and drafting the plan
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Introduction (continued)
• The planning process included;– Five months of research, analysis and interviews
– Five planning sessions
– Multiple Board presentations
– Significant outreach: customers, stakeholders, legislators, Governor’soffice, Mayor’s office, and others
• This document summarizes the SCSPA’s strategic plan.
• It sequentially presents:– An overview of the SCSPA
– The SCSPA’s strengths, weaknesses, opportunities and threats (SWOTassessment)
– The SCSPA’s mission statement and objectives
– The SCSPA’s strategic issues
– The SCSPA’s strategic initiatives
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The SCSPA is an enterprise agency of the State ofSouth Carolina.
Enabling Legislation 1942• Incorporated in Section 54-3 of the
unannotated South Carolina Code ofLaws.
• Its purposes and authorities include:– Through the Authority the State may
engage in promoting, developing,constructing, equipping, maintainingand operating the harbors or seaportswithin the State
– …including the acquisition orconstruction, maintenance andoperation at such seaports of harborwatercraft and terminal railroads, aswell as other kinds of terminal facilities,and belt line roads or highways
• As an enterprise agency, the SCSPAis required to be financially self-sufficient.
2009 Port Governance Law(Act 73)
• Amends/expands on the originalenabling legislation in severalareas
– Oversight: Port oversightcommittee has been established
– Governance:• Board members can only be
removed for cause
• Qualifications (expertise,experience) to be considered forappointment to the Board aredefined
– Development: directs the SCSPAto proceed with constructingmarine terminals on theCharleston Navy Base and inJasper County
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The SCSPA is governed by an eleven member Board ofCommissioners.
• Nine members are nominated for appointment by the Governor andqualified and approved by the Senate.
• The Secretaries of Transportation and Commerce serve in an exoficio capacity.
• They serve for terms of five years (as amended by the 2009 PortGovernance Law).
• Board officers include the Chairman, Vice-Chairman, Secretary andTreasurer.
• The Board’s responsibilities include:
– Hiring the Chief Executive Officer
– Setting policy and direction
– Providing oversight and guidance to the SCSPA’s Senior ManagementTeam
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The SCSPA operates multiple lines of business andasset bases.
Major Lines of Business
• Container
• Breakbulk
• Roll-on/Roll-off (RoRo)
• Bulk
• Cruise
Asset Bases
• Port of Charleston– Container facilities: Columbus Street,
North Charleston, and Wando Welch
– Currently developing the Navy BaseContainer Terminal
– Non-container facilities:
• Veterans’ Terminal
• Union Pier Terminal
• Port of Georgetown– Breakbulk and bulk facilities
• Other Assets– Daniel Island: 1,500 acres; a portion of
the site is in the process of being sold
– Port Royal: 51 high ground acre site inthe process of being sold
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The SCSPA competes in the South Atlantic-East Gulf portrange.
Major South Atlantic and East Gulf Ports
Miami
Palm Beach
Jacksonville
Charleston
Savannah
Tampa
Mobile
Wilmington, NC
Port Everglades
Hampton Roads
Source: AAPA; Port Websites; Norbridge Analysis
Morehead City
Georgetown
Brunswick
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The SCSPA makes a significant contribution toSouth Carolina’s economy and economicdevelopment.
• $45 billion in total economic output each year across the state
•
• 260,800 jobs, representing 10.9% of all jobs in South Carolina
• $11.8 billion in labor income, which is 13.6% of the state’s totalincome
• $1.5 billion in state and local taxes
• $18.5 billion in value-added impact, representing 12.1% of thetotal gross state product
Source: SCSPA
SCSPA Port and Maritime Industry Economic Impact
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Completing a SWOT analysis for the SCSPA was amajor first step in preparing the strategic plan.
• It established a fact-based foundation upon which the strategic plan wasdeveloped:
– Identifying what the SCSPA does well
– Identifying the SCSPA’s weaknesses and challenges
– Defining the SCSPA’s strategic issues
– Developing action plans
• The SWOT analysis was based on a series of detailed assessments:
– Competitive
– Industry
– Market
– Economic
– Financial
– Customer and industry interviews
• This section summarizes the results of the SWOT analysis.
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The SCSPA’s Strengths and Weaknesses
Strengths
• Vessel access: channel depths andwidths, transit times, and lack ofcongestion
• Vessel size: the Port of Charlestontoday can handle a majority of thecontainer fleet anticipated to call theU.S. East Coast following theexpansion of the Panama Canal
• Terminals: efficiency, productivity,truck turn times
• Customer base: SCSPA customersinclude 18 of the world’s top 20 globalcontainer lines (top 20 carriers as ofAXS-Alphaliner September 2009survey)
• Financial resources: ability to financeterminal expansion and modernization
Weaknesses
• Asian trades: SCSPA’s participationin the higher growth Asian trades isless (fewer services, less geographiccoverage) than major competitors.
• Distribution center industry: SouthCarolina lacks a significant distributioncenter base.
• Dispersed container terminals:reduces economy of scaleopportunities
• High terminal development costs:limited expansion sites requiring majorcivil works increase terminaldevelopment costs.
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Charleston’s 45’ channel draft can accommodate 84% of all container vessels of9,000 TEUs or less (current and on-order). Charleston’s maximum draft (47’ at
high tide) can accommodate 90% of these vessels.
Source: June 2009 Lloyd’s Fairplay; Norbridge analysis
35
40
45
50
55
60
4,000 6,000 8,000 10,000 12,000 14,000 16,000
TEUs
Dra
ft(f
t)
Current Orderbook
Container Vessels by Draft and Size and Major South Atlantic PortMain Channel Depths (4,500+ TEU Vessels)
Hampton Roads
Charleston(Avg. High Tide Draft)
Savannah
Charleston(MLW)
16
4042
38 40
31 3326 30
0
10
20
30
40
50
Lif
tsp
er
Ho
ur
Charleston Savannah Hampton Roads PANYNJ
Reported Average and High Gross VesselProductivity
Average High
Container shipping lines report they consistently experience thehighest gross crane productivity in Charleston.
Source: SCSPA; Carrier interviews
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SCSPA’s container shipping line customers include 18of the top 20 global container lines (see note below).
SCSPA’s Container ShippingLine Customers
• Include the major consortia
• Include the four largest“independent (non-alliance)”carriers
• Cover the world’s major tradelanes:
– China/Asia
– North Europe
– Mediterranean
– Indian Subcontinent
– South America
Note: Top 20 carriers as of AXS-Alphaliner September 2009 survey
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SCSPA’s Opportunities and Threats
Opportunities• Market recovery: international trade
should begin to recover during thelatter stages of 2010 and in 2011
• Panama Canal expansion: expansionwill provide access to significant inlandmarkets
• Navy Base Container Terminal:provides a modern deep-draftcontainer terminal capability within thePort of Charleston
• Distribution center development:proposed developments, if they occur,should significantly increase SCSPA’scargo base
• Jasper County: provides significantregional capacity expansioncapabilities
Threats• Industry consolidation: global
recession and its affect on shippinglines could lead to majorconsolidations and bankruptcies
• Opposition to terminal expansion:The SCSPA’s ability to successfullyaddress expansion opposition is majorconcern of shipping line customers
• Competitors’ expansion programs:SCSPA competitors continue to investsignificant capital in expanding andenhancing port and relatedinfrastructure
• Sustaining competitive rail access:sustaining and enhancing competitiverail access to major inland markets is akey to successfully pursuing marketopportunities
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The Panama Canal Authority is undertaking an expansion plan which involvesconstructing two new sets of locks and new channels. This expansion, when
completed (2014-2015), will create opportunities for Atlantic Coast ports.
Source: ACP (Panama Canal Authority); Norbridge research and analysis
iPanama Canal Expansion Overview
Source: ACP (Panama Canal Authority); Norbridge research and analysis
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The expanded Panama Canal will be able to accommodate largercontainer ships (up to 12,600 TEUs) with a draft of up to 50’freshwater.
Key Current and Expanded Panama Canal Features
Source: ACP (Panama Canal Authority); Norbridge research and analysis
119,00052,000Estimated Maximum BulkCarrier DWT
117,00054,000Estimated Maximum TankerDWT
1,4001,050’Lock Length
180’110’Lock Width
16,00013,500-14,000Capacity (Estimated AnnualTransits)
12,600 TEUs5,000 TEUsEstimated Maximum TEUCapacity
1,200’965’Maximum Ship Length
50’39.5’Maximum Ship Draft
Expanded PanamaCanal
Current Panama Canal
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By 2015, a portion of the estimated three million containers of traffic projected tomove between Asia and selected U.S. markets via West Coast ports could beattracted to South Atlantic ports as a result of the Panama Canal Expansion
program.
Midwest
Asia-West Coast Container Markets Potentially Divertedto South Atlantic Ports: Post Panama Canal Expansion
North Carolina
South Carolina
Georgia
Alabama
Tennessee
Kentucky
Source: Norbridge analysis.
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SCSPA Mission Statement
The South Carolina State Ports Authority (SCSPA)promotes, develops and facilitates waterbornecommerce to meet the current and future needs ofits customers, and for the economic benefit of thecitizens and businesses of South Carolina. TheSCSPA fulfills this mission by delivering cost-competitive facilities and services, collaboratingwith customers and stakeholders, and sustaining itsfinancial self-sufficiency.
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The SCSPA mission statement answers a number ofbasic questions about the organization:
1. What does SCSPA do?• The SCSPA’s promotes, develops, and facilitates port and waterborne
commerce.
• The SCSPA supports, but does not lead or promote on its own, state-wide economic development by promoting, developing and facilitatingport and waterborne commerce.
2. Why does SCSPA focus on port and waterborne commerce?• To meet its customers’ evolving freight and service needs, which in
turn, generates economic benefits (e.g. waterborne and freighttransportation jobs)
3. Who does SCSPA carry out its mission for?• Customers (e.g. carriers), stakeholders (e.g. maritime community), and
South Carolina citizens and businesses
4. How does SCSPA support its activities?• By sustaining its financial self-sufficiency
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The SCSPA has established six broad objectives tomeasure its success in fulfilling its mission:
• Growth: aggressively pursue growth opportunities across all lines ofbusiness
• Productivity: deliver superior, cost-effective productivity to itscustomers
• Asset utilization: maximize the efficiency and use of its assets
• Financial self-sufficiency: sustain the SCSPA’s ability tocontinuously invest to meet customers’ ongoing requirements
• Economic contribution: contribute to the economic betterment ofSouth Carolina’s citizens and businesses by sustaining and growingwaterborne transportation employment opportunities and fosteringfull service ports
• Staff development: recruit, retain, develop and train customer-centric employees
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Strategic Issue Definition: An opportunity or a threat thatfundamentally affects the ability of an organization to fulfillits mission and achieve its objectives.
The hallmarks of a strategic issue include:
1. Involves major uncertainties or risks
2. Is complex, i.e. involves multiple parties or decision-makers,multiple factors or drivers that are interrelated, multipleoutcomes depending on the interaction of key drivers, etc.
3. Affects the ability of an organization to achieve sustainablecompetitive advantages
4. Commands significant resources
5. Requires the focus of senior management to address
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The SCSPA identified four strategic issues it needs toaddress in order to successfully fulfill its mission:
• Market Development: How does the SCSPA best position itselfto take advantage of current and emerging marketopportunities in its major lines of business?
• Infrastructure Development: What is the optimal infrastructuredevelopment plan for positioning the SCSPA to sustain growthin its major lines of business?
• Stakeholder Relations: How does the SCSPA build thesustainable, collaborative relationships with stakeholders tosuccessfully fulfill its mission?
• Financial Sustainability: How does the SCSPA sustain itsfinancial self-sufficiency, which is critical to successfullyfulfilling its mission?
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Market Development Strategy
The SCSPA will pursue a multi-tiered approach to growing anddiversifying its major lines of business, focusing on:
• Customer retention and expansion
• New customer development
• Line of business and product diversification
• Partnering with stakeholders to enhance and expand theSCSPA’s competitiveness and market opportunities
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Infrastructure Development Strategy
The SCSPA will pursue an integrated approach to utilizing,modernizing and expanding port and related freight and cruisetransportation infrastructure:
• Maximize the use and efficiency of the SCSPA’s existing assetbase
• Successfully complete Phase I of the Navy Base ContainerTerminal
• Implement a post-45’ deepening project for the Port ofCharleston
• Pursue development of a container terminal in Jasper County
• Work collaboratively with stakeholders to address regionalfreight rail infrastructure and competitiveness issues
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Stakeholder Relations Strategy
The SCSPA will prepare and implement an integrated strategyfor enhancing and expanding existing stakeholderrelationships for the purposes of pursuing collaborativeinitiatives to increase trade, foster new business opportunities,and expand employment.
• The SCSPA and Senior Management Team will activelyparticipate in the formulation and implementation of thisinitiative.
• Proactively working with the Port Oversight Committee, theCharleston Maritime Association and the statewide businesscommunity are key components of this strategy.
• Clear, concise and consistent communication between theSCSPA and all stakeholder groups is also a critical element ofthis strategy.
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Financial Sustainability Strategy
The SCSPA will formulate and implement a long-term strategythat insures the SCSPA fulfills its financial self-sufficiencymandate and thus has the requisite funds to continuouslyinvest in the modernization and expansion of its facilities,infrastructure and services.
• Short-term: continuously pursue opportunities to reduce costs,improve efficiencies, and increase productivity to support theSCSPA’s market development strategy
• Mid-to-long term: identify, evaluate, and integrate new andemerging financial management and financing techniques tosupport the SCSPA’s market and infrastructure developmentstrategies
• Proactively seek opportunities to pursue public-privatepartnerships