S.C. ports chief resigns under fire

S.C. ports chief resigns under fire

Groseclose

   Bernard S. Groseclose Jr. abruptly resigned Tuesday as president of the South Carolina State Ports Authority amid growing criticism about the Port of Charleston losing ground to East Coast competitors.
   The state body said board member John F. Hassell will immediately take over as interim president while the board conducts a search for a permanent replacement.
   A statement gave no reason for his departure and spokesman Byron Miller declined to provide any details.
   Groseclose, 55, cited “personal reasons” for the resignation at Tuesday’s board meeting, according to Hassell.
   Maersk Line, the port’s largest customer, announced in December that it will begin shifting vessel calls to other ports during the next two years until its lease expires at the end of 2010, at which point it will hand back control of its dedicated terminal in Charleston. Maersk, citing the high cost of unionized labor at the port, said it would quickly begin phasing out about 25 percent of its port calls in the first quarter of 2009. The container line provides the port about a quarter of its business.
   Groseclose has been under fire from state politicians as Charleston has lost market share to other East Coast ports in recent years. He has also been criticized for not utilizing private partnerships to expand port capacity and manage facilities.
   In fiscal year 2008 ended June 30, the Port of Charleston handled 1.7 million TEUs compared to 1.9 million TEUs the year before and nearly 2 million TEUs in 2006. On a calendar year basis, container traffic at the port dropped 11 percent to 1.75 million TEUs from 1.97 million TEUs between 2006 and 2007. The port also fell one spot to No. 11 among U.S. container ports in 2007 even as several other East coast ports experienced higher growth from West Coast cargo diversion before the current economic downturn took hold. The Port of Savannah, Ga., by contrast experienced high double-digit growth in recent years by wooing shippers to set up warehouses near the port and attract carriers.
   Container volumes at Charleston were down 4 percent in the first five months of its fiscal year (July-November).
   Comments from a couple of port actors suggested dissatisfaction with management’s effort to cling to its traditional business model as an operating port.
   Charleston has to get back to its core economic development mission of building cargo volume, Hassell said. “We’ve got to be much more creative and much more aggressive and work much more closely with our business partners in the private sector. And, then, I think we’ll be successful,” he said.
   “I’m very concerned about the direction the port is going in. To me this is an opportunity for a new director to come in and be a visionary and to bring together the maritime players to rebuild our port and get ready for the boom. I hope that a new leader would see the value of including all the players and making them a part of the team to attract and retain business,” said Kenneth Riley, president of International Longshoremen’s Association (ILA) Local 1422, who was reached on his cell phone while attending the Obama inauguration in Washington.
   A spokesman for Gov. Mark Sanford told the Charleston Post and Courier that the state executive found Groseclose unreceptive to privatization, adding, “We fully support the board’s decision.”
   Maersk and the port blamed the ILA for rejecting a proposal to allow the Danish carrier to move its operations to a 'common-use' gate area where non-union state employees man the gates used by trucks coming to and leaving the terminal.
   Riley dismissed the charge, saying the port is losing business because of its outdated business model.
   “If our port was not an operating port, this would not be an issue for us. If we operated like most ports around the country we wouldn’t be in this situation. It’s long past time to not look at public-private partnerships” that would require carriers to make long-term investments in facilities and give them an incentive to stick around, he said.
   Riley said some in the port establishment have tried to minimize the role of union workers and fended off calls for system change because of strong volume growth, but lost credibility when volumes turned south.
   The ILA accepts that some jobs may be eliminated by technology or other efficiency efforts, but will not give up its rights simply to allow someone else to do the same job, he said.
   The concession Maersk sought would have transferred jobs for container yard clerks from the ILA to state workers.
   It’s not immediately clear how Maersk will gain an advantage by shifting ports since the ILA is the predominant workforce at ports up and down the East Coast. The day before the Maersk news broke, the port authority announced a 5 percent rate discount in Charleston to help all carriers during the first quarter of the year.
   Hassell has taken a leave of absence from the Maritime Association of South Carolina, which he has served as president for 15 years, to focus on leading the port. He also worked for the port authority from 1980 to 1986.
   'The people of South Carolina owe Bernie Groseclose a debt of gratitude for his service to one of our state's most important economic development engines,' Port Authority Chairman David Posek said. 'During his tenure, the port system became one of the most effective and efficient ports authorities in the world. He has led the authority through some very turbulent times over the years and the board wishes him the best.'
   The port authority under Groseclose has begun site preparation for a new three-berth, 280-acre container terminal at the former Charleston Naval Base and expects to open the first phase of the facility in 2014. At full build out the new terminal is expected to increase Charleston’s port capacity by about half, or 1.4 million TEUs, to about 4.2 million TEUs.
   The South Carolina State Ports Authority and the Georgia Ports Authority are also collaborating to develop a joint container terminal to be built in on the Savannah River in Jasper County, S.C.
   Groseclose joined the SCSPA in 1985 as manager of business analysis and later served as director of planning and development. The port authority board unanimously selected him as president and CEO in mid-1996. He is a former chairman of the American Association of Port Authorities.
   Posek said the search committee will seek input on a new director from constituencies at the local and state level. ' Eric Kulisch