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South Carolina Ports, in a surprise announcement, reported it will suspend operations at its new terminal in Charleston, citing low volumes and high costs for the terminal. Celebrated in 2021 as the first new, large terminal opened in the United States in more than a decade, it is the latest blow to the operation, which has struggled to gain a footing.
The state authority reports it will be winding down the operations over the next few weeks, with the temporary pause going into effect on August 1 for the Hugh K. Leatherman Port Terminal. It said operations would be consolidated at Charleston's Wando Welch and North Charleston terminals while assuring customers that the two facilities have sufficient capacity as well as space to support short-term growth.
Making the announcement, it said, "The industry faces numerous headwinds, an uncertain trade forecast, and tempered volumes. This decision aligns with the port's continued focus on cost competitiveness to ensure the business is well-positioned for growth."
The terminal is running at a low percentage of its capacity even before a planned expansion. According to local media reports, Leatherman handled less than 10 percent of its capacity in the first 11 months of the fiscal year. It had a volume of just 75,455 containers versus a volume of more than 1 million containers at the Wando Welch terminal in Charleston.
The closure will force MSC Mediterranean Shipping Company to relocate its operations, which were the primary tenant at the Leatherman terminal. It has five routes calling at the terminal, although one is also scheduled to be suspended due to low volumes.
Leatherman opened in March 2021 with high expectations for growth at the Port of Charleston but soon encountered challenges. The International Longshoremen's Association was battling with the port for control of the terminal and the jobs and filed a lawsuit weeks after the operations commenced. The major shipping companies refused to move operations to Leatherman due to the labor dispute. The terminal was effectively closed for 21 months until the union and port authority reached an agreement and operations resumed in September 2024.
A state senator who also heads the State Transportation Committee, Larry Grooms, admitted to the South Carolina Daily Gazette that it is "too costly to operate right now." The paper reports that the union has said it would be willing to work with the authority.
Plans for the Leatherman terminal called for an initial capacity of 700,000 TEUs of annual throughput. It initially added one 1,400-foot berth and was outfitted with five ship-to-shore cranes, 25 hybrid rubber-tired gantry cranes, and a refrigerated container yard. When fully built, the three-berth terminal was slated to add 2.4 million TEUs of throughput capacity to the Port of Charleston. Year-to-date in FY26, the port has handled just over 2.2 million TEU, which is down five percent from the same period in FY25.
South Carolina Ports had previously announced it was delaying the opening of a planned rail yard adjacent to Leatherman. It is a $690 million project, but it was also suspended. However, construction on the second berth at Leatherman has continued. It was expected to be completed next year.
Analysts have forecast that container volumes at U.S. ports are likely to remain at lower levels. The National Retail Federation is projecting that monthly year-over-year volume declines will continue through the remainder of 2026. Its full-year forecast calls for volumes to be flat compared to 2025, as well as on a plateau starting in 2021.
Fuente: MARITIME_EXECUTIVE
