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THURSDAY, JANUARY 19, 2006 12:00 AM

Inland port system outlined

Private company has plan for speeding up flow of containers

BY JOHN P. McDERMOTT
The Post and Courier

A private company unveiled plans Wednesday for a $250 million inland port system, saying it would use barges, trains and remote distribution sites to speed the movement of ocean-going containers that come through Charleston.

Carolina Linkages, a unit of Charleston-based maritime consultant Safe Ports Inc., said it is developing the ground transportation network in response to several factors, such as skyrocketing real estate values along the coast, increased road congestion and the fast-growing demand for space on the waterfront.

The company, known as CaroLinks, said it hopes to break ground this summer and be fully operational by late 2008. It expects to directly create 200 jobs.

Speculation about the privately financed inland port project has spread within maritime circles in recent months, but the company withheld talking about its plan publicly until it felt certain it had a financially viable business on its hands.

"We're ready," said Lucy Duncan-Scheman, founder and chief executive. "We feel very confident with our financing, with our engineering work and with our marketing work."

In a speech before a somewhat skeptical Propeller Club membership, the well-connected Charleston native noted that the "enormous" demand for port capacity in Charleston and other cities along the East Coast is continuing to grow at a fast clip.

"However, as capacity dramatically increases in both ships and ports, the nation's highways and rail infrastructure are hard-pressed to keep up, a burden that federal, state and local governments are grappling with," she said.

CaroLinks' initial plan is to move imports and exports for customers between the State Ports Authority's Wando Welch Terminal and at least two strategically placed distribution hubs away from the Charleston region, where rapidly rising land costs have made warehouse development difficult.

The company said it has about 800 acres with rail access under contract near Interstate 95 and Highway 301 in Orangeburg County and is looking to buy more real estate in the immediate area. Drawings show up to 4 million square feet of warehouse space that can be built on the property. The company also is evaluating several sites to buy along the Interstate 85 corridor in the Upstate, where it sees an opportunity to tap into the Southeast's growing automotive industry.

Locally, CaroLinks said it is committed to buying 80 acres on Shipyard Creek, including part of the former Macalloy industrial site, once the environmental cleanup of that property is completed.

Duncan-Scheman said the identity of her company's major financial backer, a publicly traded company, can be disclosed once the investor emerges from a temporary "quiet period" required under Securities and Exchange Commission rules.

CaroLinks is focusing its early efforts on Wando Welch traffic because that terminal has no rail service, Duncan-Scheman said. Using imports as an example, she said, the company plans to place containers from the Mount Pleasant facility onto barges and take them to its Shipyard Creek yard. Crane operators would then load the boxes onto trains bound for either the Orangeburg or Upstate sites, where the cargo could be stored in warehouses or loaded immediately onto trucks.

Duncan-Scheman said the operation will have to function like a conveyor belt that runs around the clock to succeed. It also will need companies to lease warehouse space within its inland distribution sites to generate revenue.

Based on her talks with prospective customers, she said, CaroLinks will likely attract new customers to the Port of Charleston, but it would not compete against the SPA, stevedores or existing private-sector companies.

"We're adding opportunity," Duncan-Scheman said.

CaroLinks still has some significant hurdles left to clear before it can put its plan into action. The proposed Orangeburg site, for example, will require a new $40 million interchange be built to improve access between I-95 and Highway 301. Also, the company must hammer out an agreement with the SPA regarding the movement of containers from the pier to the barges.

"The Ports Authority is aware of the concept and has met with CaroLinks on several occasions," said SPA spokesman Byron Miller. "At this time, it's a little unclear what their operational needs are on the public marine terminals. If there's new business and investment involved, of course we're interested."

In a statement, Ken Riley, president of the International Longshoremen's Association Local 1422, said he liked the idea. He said CaroLinks "has developed a very exciting and innovative concept that addresses the needs of the shipping industry, the Port of Charleston, and the business community of South Carolina and the Southeast region."

Robert New, owner of Charleston Port Services, said the Propeller Club lunch crowd was at turns intrigued and skeptical of the company's business model. "It's a very ambitious project, but the devil's in the details," New said. "In the end, they have to build a better mousetrap that's economically viable. If they can, this will be a huge benefit to the port."

Contact John McDermott at jmcdermott@postandcourier.com or 937-5572.


This article was printed via the web on 1/19/2006 2:44:20 PM . This article
appeared in The Post and Courier and updated online at Charleston.net on Thursday, January 19, 2006.