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Aug 09, 2023

Charleston port driving more refrigerated warehouse projects

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Refrigerated containers sit at the Port of Charleston's Wando Welch Terminal in Mount Pleasant. The growth of refrigerated cargo at the port has led to the construction of several new cold-storage warehouses in the Charleston region. English Purcell/State Ports Authority/Provided

Cold storage is absolutely hot in the Charleston area.

The latest Sub-Zero-style warehouse proposed to serve the Port of Charleston would be along Patriot Boulevard in North Charleston, according to plans submitted July 11 to the U.S. Army Corps of Engineers.

Flexspace, with its headquarters on East Bay Street in Charleston, recently submitted a request to the federal agency to fill about three acres of wetlands at the site sandwiched between Dorchester Road and Associate Drive to build a structure dedicated to "regional cold storage and distribution of food products," according to the application.

The developer has proposed purchasing credits in a wetlands mitigation bank to compensate for the loss of wetlands.

Plans show a 151,600-square-foot warehouse on a 51-acre site, which is owned by Whitfield Co. LLC, according to Dorchester County property records.

A Flexspace spokesman did not respond to a request for comment, and the permit application did not include a timetable for development.

The company's website says Flexspace can increase density in a smaller warehouse footprint by using a racking system that's installed on movable bases.

"The innovative, lateral movement replaces multiple conventional, static, open aisles with one moving access aisle," the website states.

The Army Corps permit application notes "the height of the proposed warehouse building has been increased to increase the vertical storage capability of pallet position," although the actual height isn't specified. Flexspace told the agency "that maximizing the height of the building reduced the footprint of the warehouse, which resulted in a minimization of wetland impacts," according to the application.

Refrigerated cargo at Charleston's port has more than doubled over the past decade, driven by the Southeast's booming population and changes in grocery consumption. More than 37,000 refrigerated containers of all sizes moved through the port in both 2020 and 2021, although figures for the most recent fiscal year that ended June 30 were down to 35,449 containers. SPA spokeswoman Liz Crumley said the drop was due to supply chain issues that limited exports rather than any decline in demand.

The port's numbers have spurred several cold-storage projects, including:

Boeing Co. expects the number of freighters, like this 777 owned by Turkish Airlines, will grow by 80 percent over the next 20 years. Turkish Airlines/Provided

It's unlikely air cargo will ever take a significant chunk of the global trade market from container ships, but Boeing Co. — which builds the 787 Dreamliner passenger jet in North Charleston — thinks ongoing supply chain bottlenecks and the popularity of e-commerce might open the door to some growth in moving goods by airplanes rather than by sea.

Darren Hulst, the aerospace firm's vice president for commercial marketing, said air cargo "is performing at historic levels" both in terms of volume and revenue, which has more than doubled in some markets since before the pandemic. He thinks more businesses are seeing "the value of air cargo relative to supply chains that are challenged" by congestion at some of the nation's largest seaports.

"Structurally, there are some factors that are driving a strategic shift to air cargo even into the medium and long term," Hulst said during Boeing's annual commercial market outlook leading up to this week's Farnborough International Airshow in England.

E-commerce sales will be "a structural driver of growth as we move through the next decade," Hulst said, adding the popularity of online retail is changing "how companies and logistics are setting themselves up long term to satisfy that demand and to create networks to deliver during those busy times."

Another shift, he said, is the value that freight forwarders now see in the speed and reliability of moving cargo by air.

"That wasn't a main consideration three to five years ago, but I think longer term it becomes a key factor in how these companies set up their strategic growth and manage both capacity and demand across the entire logistics chain," Hulst said.

The gap between the cost to send goods by sea or air is also narrowing, with most container shipping lines now members of alliances that offer roughly the same price to move freight. During the height of the pandemic, shipping lines were charging $20,000 or more to move a single container.

"While we're still talking about an air cargo market that carries only about 1 percent of global trade, even just a small shift — a tenth of a percent or two tenths of a percent — in terms of mode of transportation of key elements of trade makes a big impact in demand for air cargo," Hulst said.

Boeing is predicting the need for 80 percent growth in global freighter fleets — to 3,610 planes — over the next 20 years, with the biggest demand coming from carriers in the Asia-Pacific market.

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Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_

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