The South Carolina State Ports Authority (SPA) is currently reviewing proposals from private companies interested in managing the Hugh K. Leatherman Terminal in North Charleston. This development follows the SPA’s quiet request for proposals in June, aimed at addressing the underperforming and newly idled facility. Operations at the Leatherman Terminal were suspended on August 1.
SPA CEO Micah Mallace stated on August 18 that multiple parties have expressed interest, and the authority is exploring all potential avenues, prioritizing growth. While the proposals remain confidential, they likely include variations of landlord-tenant leasing agreements, where a third-party operator would handle labor and cargo movement, with the SPA collecting rent. Mallace indicated a preference for arrangements that allow the SPA to retain more control.
If an agreement is reached, it would mark the first instance of the port transferring a state-owned marine terminal to a private operator. The International Longshoremen’s Association (ILA), which has operated Leatherman for the past two years, has not commented on the potential management change. The idea of private sector involvement has surfaced before, including a 2008 request from a state lawmaker that did not advance, and a previous sublease deal in the late 1990s that resulted in a nearly $5 million settlement for the port in 2003.
The SPA’s stance on privatization has evolved with industry changes, particularly the advent of mega-ships and large-scale maritime projects like Leatherman. Former CEO Jim Newsome had previously sought institutional investors for new financing options over a decade ago, though those discussions did not involve changes to terminal operations.
The Hugh K. Leatherman Terminal, named for a late Pee Dee lawmaker, opened its first phase on March 31, 2021, after years of planning and an investment of approximately $1 billion. However, it has not met expectations due to high operating costs and a protracted labor dispute. The terminal, designed to handle up to 700,000 containers annually, processed nearly 85,000 boxes during the SPA’s 2026 fiscal year, representing 6.3 percent of the total through June.
Most ocean carriers initially avoided Leatherman due to a legal battle between the port and the ILA, which intensified about two months before the terminal opened. The ILA asserted that its members should operate all heavy-lift equipment, displacing SPA government employees. The ILA prevailed in early 2024 after the case reached the U.S. Supreme Court, leading to the union exclusively operating Leatherman with an elevated labor-cost structure that has impacted its competitiveness.
Ron Brinson, a former North Charleston City Council member and past executive for the Port of New Orleans and the American Association of Port Authorities, noted that the ILA contract changes created challenges for the SPA. Brinson views the current proposal as a timely opportunity for creative solutions, suggesting it could lead to a very productive direction for the port authority. He observed that Charleston’s hybrid labor model, combining public employees and union workers, is becoming rare, with most ports operating through port authority-privatization relationships managed by leases.
Brinson cited Baltimore’s Sparrows Point Container Terminal, which broke ground in May with $1.6 billion in private financing and is scheduled to open in 2030, as an East Coast example. That 168-acre import-export hub will be managed by a division of Mediterranean Shipping Co., the SPA’s largest customer. Brinson believes that if a sophisticated company like MSC or APM takes over Leatherman, they would make the terminal productive.
