(upbeat music) - [Announcer] This is a "Carolina Business Review" special presentation on location at the Wando Terminal for the South Carolina Ports Authority in Charleston, South Carolina.

Generous support for "Carolina Business Review" is provided by Sonoco, a global manufacturer of consumer and industrial packaging products and provider of packaging services with more than 300 operations in 35 countries.

Colonial Life, providing benefits to employees to help them protect their family, their finances, and their futures.

Blue Cross Blue Shield of South Carolina, an independent licensee of the Blue Cross and Blue Shield Association.

Visit us at southcarolinablues.com.

Martin Marietta, a leading provider of natural resource based building materials, providing the foundation on which our communities improve and grow, and High Point University, the premier life skills university focused on preparing students for the world as it is going to be.

- I'm Chris William, and welcoming again to the most widely watched program on Carolina business policy and public affairs, and this is part two of a special dialogue around economic activity, transportation, and infrastructure.

As you can see, we are on the port in South Carolina at the Wando Welch Terminal to take a deeper dive around all of those issues with five leaders whose opinion matters here in the region.

Stay with us because we start right now.

- [Announcer] On this program, Jim Newsome, former president and CEO, South Carolina Ports, Barbara Melvin, president and CEO, South Carolina Ports, Christy A.

Hall, South Carolina's secretary of transportation, Harry M. Lightsey, South Carolina secretary of commerce, and Bill Sandifer, South Carolina state representative.

(riveting music) - We are actually at the Wando Welch Terminal on the South Carolina Ports, and I asked Jim Newsome and Barbara Melvin if they ever get tired of this view, and, of course, they said no, but the point is it's exceptional and it's expanding, and it represents the dialogue that we are talking about, not just now but were last week around infrastructure, transportation, and economic development.

Welcome again to the most widely watched and longest running program on Carolina business policy and public affairs.

I'm Chris William, and we appreciate your support.

You have already heard who we have sitting on this panel.

So Mr. Secretary, Harry Lightsey, when we talk about all things around economic development, it's hard to miss one of the biggest expenses and biggest dynamic parts of it is labor.

- Yeah, so labor is, without a doubt, the number one issue in business today.

You go to any business today and you ask them, "What keeps you up at night?"

It's labor, and having the right workforce with the right skills available for them to grow and thrive and succeed, that is a key part of the dynamic.

In South Carolina, we are the beneficiaries of some wise decisions that were made decades ago to create and maintain our technical school system and 16 technical school systems, colleges that are around the state of South Carolina are like our secret sauce when we talk to businesses here in this state about labor because we can really tailor training programs for specific businesses.

And that's just an incredible asset and a resource for any business to know that they're gonna get workers trained and ready to go to work on day one, and that's an incredible advantage to us.

It's a great resource, an asset to our businesses that are here, and that is one of the things we stress.

We're working really hard.

Like many states in the South, we are at record low unemployment.

Our business is doing great.

Our state is growing and thriving.

Our businesses here are growing and succeeding and thriving.

We're having more business come to locate here.

So it's an ongoing issue that we have to work on for the long term, and it's all about creating the right educational programs and also working through the funnel.

So even going prior to college to K-12 schools and talking to them about the kind of businesses that we have here in this state and the potential careers that they have here that are exciting, exciting careers, exciting positions, and they can certainly provide a quality life for their family and, as they go forward, have a great career.

So it's working out down through K-12 to help them understand that, in the state of South Carolina, we manufacture all the F-16 fighter jets for the whole world.

In the state of South Carolina, we actually have two companies within miles of each other that provide 90-plus percent of all the inhalant medicines for anybody that has breathing difficulties that has to deal with an inhaler.

95% of those are manufactured here in South Carolina.

If you ever happen to have orthoscopic or orthopedic surgery, we have a company here in South Carolina that makes all the tools that are used in orthopedic surgery.

We have an incredible range of diverse businesses that are exciting, that are high tech, that really demand high quality skills and provide high wages, and so this is an exciting time to be in South Carolina.

- As the secretary just fleshed out jobs, Mr. Representative, Your Honor, your colleagues on the federal level enacted the infrastructure money, and about a trillion has been recently deployed and now being pushed out.

There was an article in the "Wall Street Journal" a couple of weeks ago that highlighted that fact but also that the article went in to talk about now that money is flooding into projects that already have the headwind of trying to find talent, of trying to find workers.

Is there a solution for that?

How do we solve for an already acute issue when we're trying to find talent?

- And I think that really is the crux of the problem that we're confronting right now is the fact that we have the money to pay for these things that's unique, a unique opportunity for states, but at the same time, in a lot of places, there's a shortage of labor, especially skilled labor.

It's more and more critical today than it ever has been in the past.

The unskilled labor market, it'll work itself out, but the skilled labor market is where I see the greatest problem occurring, and some of those people are retiring early.

Some of them are staying out of the workforce for the time being just by choice.

They found that they can live without that job for a period of time, and we've got to figure out some way to entice those people back into the job market to fill those open jobs.

As the secretary just said, we now have a very low unemployment rate, but that number is totally misleading, and you would agree with me, I'm sure, - Yeah, absolutely.

- because it's only those people who are shown as unemployed, but once they fall off of those roles, they're unknowns.

So you have to compare the number of people who are working age to those people who are employed to figure out how many unemployed we truly have, and I think you'd be astounded at those numbers.

- Secretary Hall, how do you square the excitement of having so much money flooding into the infrastructure, transportation, and facing this specter of, "Yeah, but I still can't find people to work these jobs that we already have"?

How do you find your place to not sound like the boy who cried wolf but really is raising the flag to say, "This is a problem"?

- Yeah, well, I think, for us, it comes down to knowing and understanding the capacity of our industry and the areas that we can grow.

In other words, don't flood an area where we know we're already having tremendous issues with either supply chain or labor issues, but look at where we do have capacity and align our plan up based on the timing of projects to fill that need.

In other words, keep that regular flow going based on the industry's capacity with some growth rates calculated in based on what industry's telling us they can grow to accommodate.

- Do you have any fear that you won't be able to do that quickly enough and Fed's or even state is gonna change its mind on the money that they've allocated to transportation?

- No, I don't, and it's because we did so much planning on the front end with our industry and our vendors, material suppliers, so that we develop a very well thought-out plan, sequenced it based on a bridge project versus a widening project versus a safety project, looking at that capacity, looking at the state's priorities to make sure that we're widening the interstates and our freight pinch points accordingly to meet the needs of the port and its expansion and our businesses here.

So it's really took a great deal of planning on the front end and then making sure that we're executing it in accordance with our priorities without letting Washington tell us what our priorities need to be, and that's key and huge for us here in our state.

- Yeah, if I could jump in on that, if you think about where we are today, we are the beneficiary of some folks who policymakers and others who had the foresight to look far into the future to expand the port, - State leadership?

- to build- - Would you say that?

- State leadership, I think, is a certainly a part of it, but I think one of the other key parts of it is the partnerships and the relationships that we've developed over the years.

The port has got plans for expansion 15, 20, 30 years out into the future.

Secretary Hall is working on our highway network 15, 20, 30 years out into the future.

And that's the key to it, I think, that we've done what we've done so well here in South Carolina is we have partnerships and relationships that we were speculating is whether it's just because we're a small state geographically.

We all know each other.

I don't know what that is, but I think one of the real key competitive advantages we have when we talk to businesses that are thinking about locating here is the relationships that we have, and it goes all the way into the education system as well, the relationships we have with the tech colleges and the research universities and with the general assembly and the policymakers.

We all know each other, we work well with each other, and you don't see that in a very many places.

- Barbara, Jim, let's bring you into this dialogue.

Labor's an important issue here, right?

Not just people that run the cranes or the vessels or run, what did you call 'em, Barbara, the utilities that run the containers around?

- The chassis.

- Yeah, the tractors.

And I'll start with you, Barbara.

Is the fact that it's harder to find labor, is that an issue for your growth and development plan?

- We have not experienced that.

We do our best to take care of our human capital, not only the employees that we have today but those that we'll continue to attract in the future because we operate this port.

We chose to do so.

We chose not to automate our equipment, so we feel like job creation is part of our mission.

But I do think that there are some portions of the maritime industry that have been cHallenged and that particularly being the motor carriers and the drivers in our industry, and we can highlight the cooperation we have in our state by talking about the fact that our general assembly this year put forward some money for training, for additional motor carriers.

We work with our technical colleges around the state to make sure that CDL programs are healthy, and we're taking advantage of a federal program that will allow for drivers to be trained between the ages of 18 and 21, and South Carolina is standing ready as we've all worked together in the port with our trucking industry and with our general assembly and DOT and commerce to say, "Give us as many apprentice slots as you possibly can because we know what to do with them.

We're standing ready with a plan to go."

- We've got over 10,000 people directly employed in the greater maritime industry, and they're good paying- - In the Charleston area?

- Here and in the upstate and in the PD now with the inland port, and these are good paying jobs.

They have great impact on the local economy.

- They're generational.

- Yeah, and we've got - Generational?

- six generations of longshoremen on the waterfront here 'cause this is an historic port city back to 1870.

So one of our tasks and our external affairs team does that is make sure we engage middle schools to let them know that these types of jobs exist, and they're jobs that don't require a college education per se.

You can do it through technical school or whatever.

So it's a great opportunity right here locally.

You'll never have to move if you don't want to 'cause the work's always gonna be here.

- Yeah, and Chris- - Let me just follow up on something that Jim said and I think that it's so critically important that we understand that, in our educational system, young people from a very early age are taught that they gonna need to have a job, and when they're taught that way and they understand that, then there is a shift in the unemployment, and I believe that shift is right around the corner.

I see it myself locally, but I see it statewide as well, and it follows up on just exactly what Jim was saying.

If you're brought into the life with the understanding at some point, you're gonna have to be able to have a job and support yourself, then it makes a difference, and I think that's the culture that we have in this state.

- Chris, Secretary Hall, are you utilizing the South Carolina Technical College system enough as a, you think there's more capacity there for you to be able to pull who you need into what you're doing?

- Well, we certainly talk with the technical colleges quite often.

You heard the Be Pro Be Proud initiative that the legislature recently funded or added additional money to that's part of it.

We use them as well to train CDL drivers because we use truck drivers as well, and the construction industry, both for our projects and for our internal operations.

And then we also use the technical colleges to help us with the certifications for our inspectors and engineers that are needed to monitor and inspect these projects.

So the importance of the technical college system could not be overstated, in my opinion.

- Well, I don't wanna understate it.

I don't wanna indict the technical college system versus a four-year college.

That's not what I'm trying to do, but we've heard for decades that it's underutilized, both the community colleges in North Carolina, technical Colleges in South Carolina.

Secretary Lightsey, is there something that would break us through the next level of optimization of those technical colleges?

- Well, first of all, I would say if they're underutilized, I'm not really aware of it.

I'm excited to say that the experience I've had with the technical colleges is exceptional, and the ability to tailor training programs for specific businesses to work with us, to bring the necessary employees when a large business decides to locate here, and they're looking to fill thousands of jobs in a very quick period of time, They have a program called Ready SC, which is globally recognized as a leading program of that kind.

And so it is a great relationship and one that it works very well, a partnership that works very well in my regard.

And it goes into the four-year colleges as well, and I'd point out the University of South Carolina has the number three rated supply chain management program in the country, and the College of Charleston has an excellent logistics program.

The Citadel does.

Clemson is an incredible resource to the state as well.

So education across the board is a strong resource for our state.

- Yeah, one of the tools, Chris, is to locate projects where there is workforce.

So Walmart just opened their large import distribution center in Dorchester County, employing 1,300 people.

Those folks can live and work in Dorchester County instead of commuting on the road network and whatever.

- Was the unemployment rate higher in Dorchester County than Charleston?

- I wouldn't say that, but they were commuting to work in, say, Berkeley County or Charleston County.

So instead, they can live and work in Dorchester County, provides a tax base for that county out there.

They're very pro business, improves their quality of life.

It takes pressure off the road network.

It's all symbiotic.

- We talked a little last week about economy and broad economy and whether we're gonna have a recession or not, and I don't want to completely revisit that, but Barbara, are you worried that there's gonna be a slowdown, and how do you prep for it?

- I'm not sure how we would compare it.

When you say a slowdown, are you talking about to the 20% additional imports that came in during the pandemic?

No, I don't think we'll continue to see that, but do I think there'll be growth over 2019?

Yes, I do think that we will continue as a country to see that type of import growth, and what we really need to focus on now is export growth.

And I think that they were really the innocent victim on the street corner during the supply chain crisis because they just couldn't navigate the uncertainty of the supply chain, and so as a country, and I think Jim certainly speaks of this often, and South Carolina and the entire Southeast, both North Carolina, South Carolina, as well as Georgia, we are export region, the region of the country, and so we need to find that resurgence in exporting.

We need to make sure that we facilitate that for them and we grow those markets because it's important for our country to have that balance of imports and exports, and we certainly see that from the automotive sector, but we need to find that resurgence in the agricultural forest products and other sectors.

- Secretary Hall, I'm gonna pin you down and give you a chance to talk a little bit about priorities, and this is not a one off, but it's specific to transportation, roads, I-26, Malfunction Junction, take your pick.

Myrtle Beach is waiting for an interstate to arrive on their doorstep.

I don't wanna put you on the spot, but so we've got some tailwind.

You've got some money that's come in from the Feds or coming in from the Feds.

You've got everyone that seems to be pulling in the same direction for transportation.

What are your two or three top issues?

What do you want to get done, and what do you feel good about?

- Well, I feel great about our overall plan, our 10-year program that we've identified, laid out prior to the money being approved, either at the state or the federal level, and then we're just moving about executing that program.

The key components of it is our interstate program to deal with the movement of freight from this phenomenal port of the interstate.

So different, not only in South Carolina but beyond our borders.

So interstate projects, both widening.

- Would that include I-95?

- I-95, I-26, Malfunction Junction in Columbia.

- So you're gonna call it that?

- I can't say Carolina Crossroads.

Staff tries to train me, but I can't get there.

I-85 in the upstate, but what we're doing on the interstate system is very strategic.

We did a study many years ago to identify our freight pitch points, so we know our interchanges that are causing the greatest delay and moving of people and goods throughout the state.

We're targeting those and we're improving those, including Malfunction Junction.

And then the key rural sections of our interstate that are hindering the movement of freight as well, I-26, I-95, I-85, so the plan that we're delivering today that we're construction's underway in South Carolina is driven by that plan that we developed back in 2016, 2017.

- And you're getting ready to get the last two-cent increase in the tax, gas tax?

- That's correct, on July 1st.

- Okay.

How important is that now, considering that the amount of money coming into transportation and infrastructure is just, on the federal level, is amazing.

Does that two cents still make a difference?

- It absolutely makes a difference, and we're depending on it coming in the back of the program that we've laid out.

And we talked earlier about the new federal funds, and those dollars are important, but what we've been able to do is to pair it into our existing priorities, not create new priorities but fund and financially support the ones that we've already identified as our key strategic items here in South Carolina from a logistics standpoint as well as just general quality of life for the people in this state.

We're a fast growing state as well.

A lot of people live and work here in South Carolina in addition to the phenomenal economic environment that we have.

So our plan is built to both fix our roads and improve our roads looking at the growth in the area here in our state.

- Yeah, I would say just one comment to say I think we proved this year that there really truly is never enough money because the state legislature dealt with a record budget, and they still had to make some really tough decisions.

- Sure did.

- And it's all about prioritization and priorities, and that's what's been done so well for this state for numbers of years and going forward, I think.

- I was just gonna add, we always think about infrastructure as roads, and I think a project that we can highlight that actually everyone sitting on this panel with us today worked on is our new intermodal facility that will be a dual-served facility for both NS and CSX that will help the entire region receive cargo and deliver cargo.

So Palmetto Railways initiated the permitting of this project.

Christy is involved with regards to connecting it to our new terminal as well as the road infrastructure necessary so that trains don't block existing roads, and then a support project for us because it's 25% of our business, and that's how you truly continue to grow your discretionary cargo.

And then finally, the general assembly provided the funding for all of that, $550 million, so that we can accomplish this project within the next three years.

So South Carolina continues to have an all-in bet on infrastructure that sets the table for economic development and starts right here at the port.

- I see it's a very democratic port 'cause while we the the incoming and the outgoing CEOs, they still have these buzzers that they won't shut off, right?

- Safety first.

- Yeah, we can't shut 'em off.

- Safety first.

- Safety first.

We've got about a minute and a half left.

Representative Sandifer, when you talk about the historic amount of money that came through and was budgeted, so let's just say the economy turns in the next 12 months or so do.

Do you and your colleagues in the state house feel good enough about the deployment of the budget surplus that you would be okay with how the decision was made to push that money out now?

- I think we would be, we would be.

The situation in which we find ourselves is that we need to spend those funds in a wise manner.

We can't be just spreading it around, and sometimes, that's what the feds look like they're doing is like just dealing cards.

We're trying to be a lot smarter than that and be very careful with the expenditure of those funds so that we have an adequate amount for a rainy day.

When the bottom should fall out, I think we'll be okay.

- Okay.

- We will not be in the same situation in which we found ourselves more than a decade ago.

- Thank you.

Thank you for your work, - Yes, sir.

- and I thank this whole panel.

Secretary Hall, thank you.

Representative Sandifer, thank you.

Secretary Lightsey, thank you.

Barbara Melvin, incoming CEO, thank you.

God bless you.

You got your job cut out for you.

And finally, Jim, as your last official CEO on this, you've been a pleasure to have.

Thank you for your leadership all these years.

- Thanks for having me, Chris.

Thanks for your interest in the port.

- And thank you for watching our program.

Till next week, I'm Chris William.

Good night.

- [Announcer] Gratefully acknowledging support by High Point University, Martin Marietta, Blue Cross Blue Shield of South Carolina, Colonial Life, Sonoco, and by viewers like you, thank you.

(riveting music)