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Coastal Heritage – Spring 2014
 
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On the Waterfront: Can Traditional Industries Survive Explosive Change?
VOLUME 28, NUMBER 2, SPRING 2014               PDF FILE        

Coastal Heritage is a quarterly publication of the S.C. Sea Grant Consortium—a university-based network supporting research, education, and outreach to conserve coastal resources and enhance economic opportunity for the people of South Carolina. To subscribe, email your name and address to Annette Dunmeyer.

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On the Waterfront:
Can Traditional Industries Survive Explosive Change?
By John H. Tibbetts

•  On the Waterfront: Can Traditional Industries Survive Explosive Change?
•  Come on in, the water's fine
•  Reading & Websites
•  News & Notes


Island Trader, newly painted a rusty red, dangles four feet off the ground. An industrial lift slowly carries the 150-ton tugboat inch-by-inch toward the waterfront on Wadmalaw Sound, a quiet, lovely natural harbor just beyond the reach of Charleston’s suburban sprawl.

Up in the air, the tugboat looks wrong, at first. Its keel seems too deep, out of scale. But Island Trader will need that deep keel for power and stability in high waves and powerful currents.

Stevens Towing CompanyFor a year, the tugboat was in dry dock where it was gutted, repowered bow-to-stern, and renovated with a new steel hull. The tugboat’s owner, Stevens Towing Company, is a century-old, family-owned business on Yonges Island, employing 120 full-time workers at its 10-acre waterfront site along a natural channel of the Atlantic Intracoastal Waterway.

“You would not build this facility here today,” says Benjamin “Bos” Smith, S.C. operations manager at Stevens Towing. “You would probably build a dry-stack marina and condos. There’s been a steady decline in commercial shipyards and other marine businesses from Virginia to Florida. You’re seeing many more places on waterfronts converted to condos with marinas in front of them.”

But someday when Charleston’s sprawl sweeps closer, this waterfront’s unobstructed view of Wadmalaw Sound, its deepwater channel to the Atlantic, and its location on the Atlantic Intracoastal Waterway will make some developers’ hearts go aflutter.

The Atlantic Intracoastal Waterway is a 1,100-mile route of partly natural and partly manmade channels from Norfolk, Va., to Miami, Fla. Since its beginnings in the 1940s, the waterway has been maintained as an inland marine route for barge traffic. For generations, tugboats shoved barges along South Carolina’s stretch of the waterway for the timber, paper, and steel industries.

But those industries, historically in decline along the coast, aren’t moving nearly as much cargo by barge as they once did. Federal budgeters, as a result, no longer view South Carolina’s stretch of the waterway as a priority for infrastructure spending. Because maintenance-and-dredging funding has fallen off drastically, the waterway is filling in with sediments that restrict navigation.

The authorized depth for most of the waterway is 12 feet, but today some channels are lower than five feet at low tide.

The U.S. Army Corps of Engineers Charleston District, which manages South Carolina’s stretch of the waterway, annually requests funding in the White House’s budget for dredging and maintenance. But the Charleston District has received less than 10% of its total federal requested funds over the past five years for the watercourse. In fiscal year 2013, it requested $15.7 million and received no support at all.

“We always ask for funding for the waterway,” says Brandon Scully, navigation branch chief of the Charleston District. There is a “chronic record” of underfunding for many types of infrastructure projects nationwide, he adds. “There is more to be done than money to do it.”

Some parts of the waterway are so shallow that Smith of Stevens Towing must reduce cargo weight by 15%—or 500-to-600 tons—per barge. In a shallow channel, a tugboat can run aground and lose control of a barge, which can swing like a door on a hinge and slam residential docks.

In the Charleston area, some docks are built so closely together and jammed with boats and maritime gear that they seem to form solid wharves of wood and fiberglass.

“There’s dock after dock after dock,” Smith says. “It’s getting riskier to operate because the waterway isn’t being dredged and we’re running a gantlet of all those residential docks. A barge can hit them like a sledgehammer.”

Traditional marine industries—commercial fishing, marine transport, shipbuilding, and ship repair—once dominated South Carolina’s coastal waterways. Now recreational and residential interests are dominant.

Residential DocksAccording to a 2014 report by the National Ocean Economics Program—based at the Center for a Blue Economy—South Carolina’s “ocean economy” includes six industrial sectors: marine transportation (shipping), living marine resources (fishing and farming the sea), marine construction, ship- and boat-building, mineral extraction (mostly oil and gas drilling and exploration), and tourism and recreation. In 2011, the report points out, 90.5% of jobs in South Carolina’s ocean economy were in coastal tourism and recreation.

As traditional marine industries continue to struggle economically, much of their infrastructure is falling into neglect or disappearing. Million-dollar homes are replacing wharves where commercial fishermen once bought ice and fuel and sold their catches. When fishing wharves are lost, fishermen often have nowhere to go for those essential services.

Rutledge Leland is the mayor of McClellanville, a fishing village (pop. 495) north of Charleston, and he’s been engaged in the local maritime industry since his youth in the 1960s. He owns Carolina Seafood, a commercial fishing wharf and seafood packing operation, and Leland Marine, which his son, also named Rutledge Leland, manages on Jeremy Creek for recreational and fishing crafts.

The elder Leland is a soft-spoken man and not prone to exaggeration, but he says, “The Intracoastal Waterway is in critical condition.”

Where Jeremy Creek empties into the Intracoastal Waterway, the channel has become “soupy mud” at low tide, he says. “It’s never been like this in my lifetime.” Some larger sailboats run aground and have to be towed out.

He once co-owned a second 700-foot wharf for commercial fishing boats on Jeremy Creek. Dozens of shrimp boats docked there, and the seafood-processing plant provided steady work for local residents. By the late-1990s, the great majority of the shrimp boats on that wharf were gone, and cheap imported seafood had driven the processing plant out of business. So Leland and his partner sold the wharf to a developer who built expensive waterfront homes there.

“The land goes where the money is,” Leland says.

Plenty of homebuyers are willing to pay for views of the water. Homes with private docks on navigable tidal creeks go for especially high prices.

Jeremy CreekToday, an attractive, well-constructed, single-family home with deepwater access on a tidal creek in the Charleston metro area costs roughly $400 per square foot while a similar home without deepwater access would cost $150-200 per square foot, according to Doug Holmes, an agent with Keller Williams Real Estate in Charleston.

The premium for deepwater access, though, drops when homes are outside of Charleston’s commuting orbit. “People want to get their boats in the water,” says Holmes, “but they also want the restaurants and entertainment in Charleston.”     

What these folks might not realize is that many marine businesses in their own communities are fading away.

Charleston restaurants, for instance, often serve inexpensive shrimp imported from Asia or South America, even when locally caught shrimp are available.

South Carolina fishermen can’t compete on price alone against imports, though local shrimp is fresher and considered tastier.

Meanwhile, rising fuel, labor, insurance, and maintenance costs are squeezing local fishermen harder than ever. To make matters even worse, shrimp catches in 2013 were down 40% from the previous year, according to the S.C. Department of Natural Resources.

“Our fisheries exist, but they are not thriving,” says Julie Davis, a living marine resources specialist with the S.C. Sea Grant Extension Program. “Fishermen are just keeping their heads above water financially at best, depending on the fishery and how they are marketing their businesses.”

Shrimpers once dry-docked their boats at small shipyards in South Carolina and Georgia, but those facilities are gone now and shrimpers must look elsewhere. Shrimp boats become more expensive to repair as they age, notes Davis, and very few new ones are being built.

Boat building for commercial-fishing vessels has nearly collapsed in the United States following decades of over-expansion. There were too many boats chasing too few fish at one time.

There were once too many U.S. Navy ships, as well. Following the end of the Cold War, many navy yards, including Charleston’s, were shuttered. American shipyards and shipbuilders, dependent on military contracts, shrank in size, consolidated, closed their doors, or turned to repairing recreational boats.

Shipbuilding has become global. Developing nations can build or dismantle vessels at lower cost not only because of their cheap labor but also because their environmental and occupational protections—if they exist—are often minimal and unenforced.

There are only two large commercial shipyards between Norfolk, Va., and Jacksonville, Fla., and both are in the Charleston area. One is Detyens Shipyards on the Cooper River and the other is Stevens Towing on Wadmalaw Sound.

“My competitors have been disappearing one-by-one,” says Smith.

For two hundred years, the United States has swung back and forth between periods of significant investment in infrastructure—canals, highways, bridges, and ports—and periods of fiscal belt-tightening.

Intracoastal Waterway MapNow many policymakers have stepped away from supporting infrastructure projects because of concerns over government spending. What’s happening on the Intracoastal Waterway is representative of a larger ongoing national debate about taxes and public works.

Members of Congress in the past would often fund infrastructure projects in their districts with a process called “earmarking.” Earmarks were special requests inserted into appropriations bills for specific projects. But as part of a recent “reform” movement in Congress, however, earmarks have been effectively abolished.

Those who depend on the waterway have become increasingly frustrated by the lack of federal support for dredging and maintenance. Stevens Towing, for instance, can’t move barges through a stretch of the Intracoastal Waterway called Breach Inlet between the Isle of Palms and Sullivan’s Island unless it’s within a one-hour window on each side of high tide. Such delays can drive up costs for the company’s customers.

Today many traditional waterfront businesses in the lowcountry are coping with competition from cheap global imports, from residential and recreational interests for waterfront access, and for scarce federal funding of infrastructure maintenance.

Where and when did all these changes begin? Why have they struck so hard in the lowcountry?

We can look back to the mid-1950s when a North Carolina entrepreneur devised a modest innovation that was little noted at the time but contributed to explosive transformations along waterfronts in the United States and beyond.

The container revolution

In 1955, Malcolm McLean, a North Carolina truck magnate, acquired a steamship company with ideas about how to streamline the shipping industry.

The following year, the world’s first successful container ship, McLean’s Ideal-X, a converted World War II-era oil tanker, made its inaugural voyage from New Jersey to Texas with 58 truck trailers on its deck. When the Ideal-X arrived at port in Texas, the truck trailers were offloaded to land, attached to trucks, and driven away. That doesn’t sound like much of an innovation today, but it changed the world. That’s because the cargo inside the truck trailers did not have to be touched between their transfer from ship to land.

In the mid-1950s, armies of dockworkers were still muscling bulk cargo, and merchant sailors were coming ashore to seek out the rough nightlife of port towns.

Loading an old-fashioned freighter usually took several days or longer. Working in gangs, stevedores carefully packed as many goods as possible into a ship’s hold, resulting in a “tight stow” so that cargo would not shift in rough seas.

In the shipping industry, “turnaround time” is the period between a ship’s arrival in port and its departure. Turnaround time depends on many factors, but one of the most important is how long it takes to load and unload a ship. When a ship is docked at port, it’s not making money. For ship owners, the less time in port the better.

It was very expensive to transfer goods by hand from one mode of transport (ship) to another mode (truck or rail). Each time the transport mode changed, human labor was required and costs rose. So shipping companies looked for new ways to shorten turnaround time.

McLean had shown that ships could haul truck trailers packed with goods from port-to-port. But a truck trailer with wheels was an ungainly cargo, using up a lot of valuable space on a ship.

So engineers began experimenting with various sizes and shapes of containers that could fit on truck trailers, railroad cars, and sea vessels.

Out of this effort emerged a six-sided steel box in lengths of 20 or 40 feet by approximately 8-feet square that could be stacked efficiently on a new generation of ships designed specifically to carry container cargo.

The specially designed containers looked and functioned the same everywhere. Amsterdam could handle the same steel boxes as New Orleans or Boston. Standardized containers, as a result, allowed nimble ports to reconfigure their facilities and move goods faster and less expensively.

Container shipAdaptable ports and shipping companies embraced the new technologies, which gave them a significant advantage. For instance, one of Malcolm McLean’s companies later became Sea-Land Services, among the world’s biggest shipping enterprises.

In short, an ancient bottleneck at portside had been suddenly broken, and the traditional waterfront would change beyond recognition.

In 1966, the first container ship left the port of Charleston. Over the next decade, container shipping allowed the Charleston port to surge far ahead of others—such as Georgetown’s port—that had shallower shipping channels and couldn’t accommodate container ships.

In the decades before the container revolution arrived to sweep out the old ways, the Charleston port was almost comically outmoded and inefficient.

The author Louis D. Rubin, Jr., raised on the peninsula, once wrote of the “rusty-railed tracks” that connected Charleston’s 1940s-era port to the warehouses along East Bay and other downtown streets.

The steel wheels of a “small, grimy switcher” would squeal “as curves were being negotiated, the locomotive emitting considerable smoke and much noise as it came and went.”

Old ports like Charleston’s were initially located in urban cores because that’s where cities were founded. Factories, mills, warehouses, rail yards, and rail lines were built near ports. Other enterprises—cafes, taverns, and union halls—served waterfront workers and the seamen who came ashore.

Containerization, however, quickly made the old waterfront districts obsolete. Their rail yards and railways were too small and inner-city roads too narrow. Brick warehouses suddenly stood unneeded and empty; after all, a shipping container is a portable warehouse.

Port authorities were relocating terminals out of inner-city districts, choosing harbor sites that could accommodate deeper-draught ships, bigger cargo volumes, and faster turnarounds. Interstate highways and local access roads were widened, linking new facilities to inland cities. Modern rail yards and railways were designed and built, and harbors were dredged deeper. New concrete lots were paved for stacking containers.

Mechanized cranes, which moved containers between ship and shore, eliminated the great majority of stevedore jobs. Because loading and unloading containers could be completed so quickly, merchant seamen remained on ship instead of going into sailor towns to spend money in the harbor district.

Factories, in turn, left the inner city because they could now send their goods more efficiently to port by truck or rail. Workers followed their jobs out of the cities.

The old waterfront enterprises lost customers. Businesses downsized, moved to new locations, or closed down. Eventually the abandoned wharves, warehouses, and rail lines became derelict.

In the late-1970s, Charleston’s decaying downtown hit bottom. Long stretches of the city’s waterfront rotted. Historic neighborhoods had become dangerous slums. Crime was rampant. Local leaders, meanwhile, searched for solutions. How do you rebuild a dilapidated inner city dependent on port-related jobs that have vanished or moved away?

By then, however, Baltimore had shown the path by transforming its abandoned inner-harbor waterfront into a popular tourism and shopping destination. Other cities—Boston, Rotterdam, and London—followed with immensely successful waterfront redevelopments.

Urban planners would raze unused rail yards, rail lines, and decaying piers. Public parks and boardwalks would be constructed at the harbor edges. Developers refashioned warehouses into restaurants and residences. Many urban waterfronts enjoyed an extraordinarily swift resurrection. Real-estate investors realized that sheltered waterfronts could be very valuable properties—in some cases as valuable as beachfront properties.

Containerization killed off many waterfront businesses at a time when the historic-preservation movement of the 1960s and 1970s was gaining momentum. Today, virtually each major port city, coastal and riverine, has refashioned an old waterfront district into a commercial and residential asset based in some part on the reuse of historic structures. All this reflected “creative destruction” at work, the replacing of older, out-of-date businesses with ones better adapted to the new economic conditions.

In South Carolina, the cities of Georgetown and Beaufort have refashioned their historic waterfronts. In Charleston, an abandoned fishing wharf on the Cooper River was turned into the city’s elegant 12-acre Waterfront Park. Empty warehouses in the city’s commercial districts were transformed into hotels, art galleries, and expensive condos.

The successful redevelopment of Charleston’s once-decrepit waterfront and downtown spilled across the peninsula, transforming it into an international tourism and cultural destination. New construction spread throughout the Ashley-Cooper-Wando estuary, adding new hotels, condos, and golf-course resorts to its shorelines.

The Port of Charleston, meanwhile, has become one of the country’s most efficient ports. The top 10 U.S. container ports accounted for 77% of all ship calls in 2012, according to the federal Research and Innovative Technology Administration. The Port of Charleston is number 10 on the list, handling more than $26 billion in cargo.

The global shipping industry has allowed goods to be distributed faster and far more cheaply than ever to distant markets—a reality that has decimated lowcountry fishing communities. Huge volumes of farmed shrimp from Thailand and other countries have been shipped in refrigerated containers to the United States to be sold at rock-bottom prices that local fishermen can’t come close to matching. As shrimpers have gone out of business, seafood wharves have been redeveloped for residential-recreational uses.

Today most of the people living and recreating along sheltered shorelines—bays, estuaries, coastal rivers, and tidal creeks—lack a direct occupational connection to the water.

Urban waterfronts have become places, notes Ann Buttenweiser, a New York-based urban planner and historian, more for “shopping instead of shipping.”

The new people can enjoy boating or gazing at the water from their decks. When they look at the Intracoastal Waterway, they might not realize that the channel was built and continues to be managed for barge traffic. They might see local barges, tugboats, and fishing boats as interlopers.

People in traditional marine trades understand all that perfectly well.

Bos Smith of the Stevens Towing Company puts it succinctly: “We mar their views.”

Georgetown’s struggles

Fifty miles north of Charleston, four rivers empty into Winyah Bay, and at the upper end of that bay is the community of Georgetown, once an important port for the rice trade and later for the timber industry that shipped the region’s yellow pine to northern shipbuilders. After the timber boom ended, Georgetown became a mill town for the paper and steel industries, which are no longer the local economic powerhouses they once were. Now the Georgetown area is divided over how to redevelop its waterfronts, a battle that has been waged across familiar lines.

Should the Georgetown area focus on attracting more tourists and prosperous retirees to its waterfronts? Or should the port be revived to draw additional manufacturing to the region?

Georgetown for centuries has struggled to overcome a liability: its port has a long, crooked, and relatively shallow channel. The Georgetown facility doesn’t accommodate containers; instead it handles bulk and break-bulk cargo on barges.

Now the port channel has become so shallow that it attracts less and less cargo traffic and will become moribund eventually unless it is dredged.

The decline of the Port of Georgetown mirrors the city’s economic struggles. Since the 1960s, Georgetown’s population has fallen from 14,000 to 9,000. Its two major manufacturers, International Paper and the Georgetown Steel Company, continue to dominate the city’s Sampit River waterfront. Those facilities have shed hundreds of jobs in recent decades, although their employment figures have stabilized, local leaders say.

Maintenance costs, including dredging, for ports and inland waterways are a federal responsibility, but it’s a tough fiscal and political climate in which to ask Washington for specially targeted infrastructure funds.

“We were not speaking in a unified voice” in the past when it came to supporting maintenance projects at the port, says Jeannette Ard, a Georgetown city councilwoman and a downtown florist whose home and store were destroyed in a recent fire. “Everyone was not pulling in the same direction. Some people still say ‘manufacturing’ like it’s a dirty word. But we need manufacturing. We want tourists to visit our downtown and our historic waterfront. Tourism jobs, though, pay minimum wage, and those jobs can’t support families or even individuals.”

Some residents might still wish that local manufacturing would go away and that the Sampit riverfront could be redeveloped for upscale residences.

But the Alliance for Economic Development for Georgetown County—a coalition of major businesses, individuals, nonprofit groups, public utilities, and others—is aiming for a regional revival of manufacturing, according to Bill Crowther, executive director of the alliance.

A top priority is to get the Port of Georgetown’s channel dredged to 27 feet. Now it is only 19 feet deep.

“All around the country,” says Crowther, “small ports are dealing with dredging problems.”

The nation’s ports and inland waterways are divided into categories of high-use, moderate-use, and low-use channels based on annual cargo tonnage.

A low-use port, which accommodates less than one million tons of cargo annually, competes for a different and smaller allotment of maintenance funds than do moderate-use ports (one-to-10 million tons) and high-use ports (10 million tons and up). The Port of Georgetown is a low-use one; the Port of Charleston is a high-use one. They do not compete for dredge funding.

The Port of Georgetown handles a half-million tons of cargo annually. If it could accommodate a million tons, it would likely stand a better chance of qualifying for maintenance funding. But the port can’t handle more cargo unless its channel is dredged.

“Yes, it’s a Catch-22,” says Crowther of the alliance.

Intracoastal dredging funding chartWho will pay for it?

South Carolina’s stretch of the Atlantic Intracoastal Waterway is trapped in the same Catch-22 problem. The state’s waterway now accommodates less than one million tons of cargo per mile annually. That puts it in the “low-use” category. For a better shot at a federal deepening project, South Carolina’s waterway should accommodate more cargo weight. But it can’t do that until its channel is deepened.

The January 2014 passage of the federal budget provides $40 million to dredge small harbors and low-use waterways. But these funds are provided on a competitive basis nationwide, and there’s no guarantee that South Carolina’s needs would be addressed first or at all.

The federal government is using too-narrow metrics in their cost-benefit analyses about which ports and waterways would receive regular maintenance and dredging, says Suzi DuRant, executive director of the South Carolina Marine Association, an advocacy group for marinas and recreational boating.

Commercial fishing boats, tour boats, charter fishing boats, sailboats, ferries, kayaks, research boats, dredge barges, fuel boats, cruise ships, and many other vessels navigate the Intracoastal Waterway along one stretch or another from Virginia to Florida—but they don’t count in calculations by federal budgeters.

Nevertheless, recreational interests have stepped up to fix navigational issues along some stretches of the Intracoastal Waterway.

In one instance in Virginia, recreational businesses established a new local financing model for dredging a shallow channel. Individual recreational enterprises raised their own funds to match a Virginia Port Authority grant and added financial support from a local county to dredge a creek and small harbor, according to Thomas Murray, an economist with Virginia Sea Grant at the Virginia Institute of Marine Science.

In North Carolina, Murray points out, a broader coalition of recreational interests helped develop a model for financing the maintenance of some of its Intracoastal Waterway channels.

The North Carolina General Assembly has created a state fund for inlet-dredging projects to be supported by increases in boat-registration fees and targeted fuel taxes. The state initiative supports half the cost of eligible dredging projects undertaken by the Corps over four years through September 2017. A local government would have to provide matching funds. The state has agreed to contribute up to $4 million per fiscal year or a total of up to $16 million.

Jobs and businesses are at stake when crucial inlets along the Intracoastal Waterway are not dredged. If the Intracoastal Waterway became too shallow in North Carolina for vessels to navigate, 1,623 jobs and $50 million in wages and salaries in the state would be lost, according to a 2007 study for North Carolina Sea Grant. In addition, $14 million would be lost in federal tax revenues, along with $8.6 million in state and local tax revenues.

But many states and localities remain reluctant to spend money to maintain waterways and ports that historically have been federal responsibilities. South Carolina, for instance, lacks a state mechanism to support the waterway’s maintenance.

The North Carolina model increases some existing fees and taxes but doesn’t create new ones, and that might make it palatable to South Carolina state legislators and their constituents, according to Brad Pickel, executive director of the Atlantic Intracoastal Waterway Association, a trade organization of commercial and recreational enterprises that advocates for more state and federal investment in the waterway’s maintenance.

Suzi DuRantFlorida uses property taxes on vessels to support dredging of federally authorized stretches of the waterway, but that would be a nonstarter in South Carolina, Pickel says. Georgia similarly lacks a funding mechanism for dredging its stretch of waterway.

South Carolina’s coastal boaters and business owners want to do their part to help. “None would mind small increases” in registration fees and fuel taxes statewide similar to those in North Carolina to keep the Intracoastal Waterway navigable, says Suzi DuRant of the South Carolina Marine Association. “But this is a coastal issue, and it could be hard to convince upstate interests in the legislature that it’s an important problem.”

South Carolina’s traditional waterfronts have been hit hard in recent years. Globalization has devastated much of the state’s commercial fishing industry. Residential and recreational interests increasingly dominate access to waterfronts, yet in South Carolina they do not contribute to funding mechanisms for maintenance of waterways. And federal funding to maintain marine infrastructure is disappearing.

The coast has changed, but public policy has not caught up. DuRant says it’s past time to recognize more fully the historical, cultural, and economic value of traditional waterfront enterprises. Too often traditional marine industries are viewed as nuisances rather than as assets.

“People visit the coast and they see the beauty and the culture, including the shrimp boats,” says DuRant. “But then they move here and they want to guard their water views as if public waterways were their own private backyards. They don’t want to see a maintenance operation going on near them; they don’t want to see a shipyard; they don’t want to see a shrimp boat. But shrimp boats are part of what makes the lowcountry, the lowcountry.”


Last updated: 6/13/2017 8:03:59 AM
Coastal Heritage – Spring 2014

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