WILMINGTON — It was a banner year for the N.C. State Ports Authority, driven primarily by a surge in import feed grain to the Port of Wilmington buoyed by a drought in the Midwest.
“If you remember last year there was a horrific drought that destroyed corn crops in the Midwestern part of the United States,” said the Ports Authority Interim Director Jeff Miles. “That created a pronounced shortage of grain supply, and that deficit had to be made up somewhere. The Port of Wilmington participated in that by handling almost 1 million tons of import grain through the Port of Wilmington.”
The increased traffic also was attributed to agriculture products and fertilizers such as dolomite and urea-ammonium nitrate. Wilmington also saw increases in break bulk metal and forest products.
The Port of Morehead City saw increases in sulfur and scrap metal.
This led to an operating margin of 13.7 percent and bottom line profit of $5.1 million, according to the Ports Authority. Year-over-year container business was flat or down, Miles said, with the biggest gains coming from the bulk business, which is a product that flows freely and is transported by means of conveyer and measured in terms of tons or volume.
“We had an amazing year,” Miles said. “We had a record-setting year. Revenues were highest in our history. We’ve expanded our operating margin tremendously.”
The ports had posted a much smaller profit of $394,000 the previous year after three straight years of multimillion-dollar losses.
Though the drought that drove up cargo volumes last fiscal year has ended, Miles said he expects some 75 percent of the new bulk business to stick around.
“What happened is people were forced to experiment with different supply chain solutions and sourcing strategies, and in this case, lo and behold, they found it worked well,” Miles said. “It was a very viable alternative to traditional sourcing of grain in the Midwest in that these grains could be introduced into the regional market of North Carolina at costs as good as if not better than domestically sourced.”
The increased business also meant increased work, and Miles said the staff responded.
“They put in a lot of hours and made a lot of personal sacrifices to be here to accommodate this record level of growth. This didn’t happen without a heck of an effort on their part,” he said.
For a port whose leadership has been marked with some uncertainty, the fiscal year numbers were cause for celebration.
Danny McComas, chairman of the State Ports Authority board, called it a “fine-tuned, well-oiled machine.”
“The staff at the port all came together and are working very well. They deserve a lot of credit for this,” he said.
Miles said the Ports Authority is being driven by a new market perspective that looks to leverage its strengths in the areas of handling break bulk and bulk, which are driven by distinctive cost advantages.
“We have a low-cost operation with a lot of customization and capabilities so we can meet special handling requirements very readily,” Miles said.
North Carolina’s state ports have made a financial turnaround from losses to profits in recent years:
2013: plus-$5.1 million
2012: plus-$394,000
2011: minus-$3.5 million
2010: minus-$6 million
2009: minus-$4.3 million
Source: N.C. State Ports Authority