Monday , December 18, 2017

Charlotte-Absolutely, Positively the Best Location for Advanced Manufacturing in the Southeast USA

John Galles Featured In Issue: April 2015
Contributed By:

One of the most frequently overlooked attributes of the Charlotte region is its central location on the East Coast and proximity to Southeastern shipping ports that carry goods around the world. Many may overlook this advantage simply because Charlotte is not located right on the ocean, but Charlotte is very definitely an inland port with access to the world, and we ought to start branding ourselves as such.

     The Global Vision Leaders Group has made bold steps in the past two years to get to know our neighboring seaports. We have had face-to-face visits with representatives from the NC Ports Authority, the SC Ports Authority, the GA Ports Authority, and plans are in place to meet with the Virginia Port Authority.

     In meeting with these representatives, we wanted to learn about their interest in working with companies located in this region and what we could do to support their efforts. Their interest in the Charlotte region is especially high given the expected increase in shipping demand to and from the East Coast with the expansion of the Panama Canal scheduled to be completed in 2016.

     Norfolk, Charleston and Savannah are dredging their ports to the necessary 50-foot depth to accommodate the larger ships that will be traversing the Panama Canal once its expanded locks are completed. Current locks will allow ships that are no longer than 965 feet long by 106 feet wide. Ships this size carry a maximum of 4,800 TEUs. (TEUs are 20-foot equivalent units or containers.)

     The larger ships can be up to 1200 feet long by 160 feet wide and carry a maximum of 12,600 TEU containers. These ships require ports that are at least 50 feet deep. The Port of Wilmington will not be dredged to a 50-foot depth. It will not become a deep water port; however, it will be maintained as an important supplementary port.

     Larger ships will carry more containers for less money per container. It is expected that more ships will be delivering to the East Coast as a result. Large shipping companies will be consolidating shipments and docking at ports that can off-load their containers as well as reload them with shipments going in the opposite direction. Shippers will seek shipments that will occupy their space and match their schedules so that they can operate more efficiently. Therein is the key to the Charlotte advantage.

     Having a location that allows businesses to negotiate with shippers at multiple ports gives them some leverage over the prices being charged at any particular port. If a company has no choices, they will have to pay the going rate at the port to which they are most proximate.

     The distance and time to a port can substantially boost the shipping costs per container. Delivery of shipments to the ports is most often by truck (80 percent) or by railroad (20 percent). In the Southeast, Norfolk Southern and CSX railroads are working hard to take business away from the trucking industry, so they are very competitive. Charlotte businesses have access to both.

     Consider the difference in miles from Atlanta, Charlotte and Greensboro to their closest ports. From Atlanta to the Port of Savannah is 257 miles and to the Port of Charleston is 305 miles. From the Charlotte to the Port of Savannah is 253 miles, to the Port of Charleston is 210 miles, to the Port of Wilmington is 207 miles, and to the Port of Norfolk is 332 miles. From the Greensboro to the Port of Savannah is 326 miles, to the Port of Charleston is 282 miles, to the Port of Wilmington is 214 miles and to the Port of Norfolk is 246 miles.

     When you examine the distances to deep water ports from Charlotte versus Atlanta and Greensboro—and even Greer—Charlotte is the least distance from the ports of Savannah, Charleston and Wilmington of any of them. (Greer is roughly the same distance to Charleston, and slightly more to Savannah. Greensboro has the advantage for Norfolk.)

     That makes Charlotte the advantaged location for advanced manufacturing distributing its goods around the globe. That key factor will help to shape the future of economic development for this region. There is no reason why Charlotte should not compete for businesses relocating to the Southeast USA region. In fact, we should become more aggressively competitive for these businesses types.

     As a matter of fact, Charlotte should be more successful than ever in recruiting advanced manufacturing for this very reason. And this stands alongside our strong community college and technical school workforce training, our already diverse business base of over 1,000 foreign-owned business entities, our extremely low-cost natural gas and electricity advantage, our moderate cost of living, our high quality of life, our access to the I-85 manufacturing corridor, our cost-competitive Charlotte Douglas International Airport, and our newly completed intermodal facility.

     What other requirements can we meet to attract businesses to this region? Let us know and we will go to work on those requirements as well!

WELCOME TO CLT.biz!

Yes, I want to subscribe to CLT.biz Insights and join the CLT GLOBAL AMBASSADOR NETWORK promoting economic growth and development in the greater CLT region.

Please keep me up-to-date and informed about CLT assets, resources and economic progress.

Thank you, John Paul Galles